Capstone Mining Mails Information Circular with Respect to Acquisition of Far West and Strategic Partnership and Joint Venture with Korea Resources Corporation

By Capstone Mining Corp., PRNE
Thursday, May 19, 2011

VANCOUVER, British Columbia, May 20, 2011 - Capstone Mining Corp. ("Capstone" or the "Company") (TSX: CS) announces
the mailing of its Information Circular's with respect to the previously
announced arrangement agreement (the "Arrangement Agreement") pursuant to
which Capstone will acquire all of the issued and outstanding common shares
of Far West Mining Ltd. ("Far West") (TSX:FWM) and Far West would be held
through a newly-formed subsidiary of Capstone, to be owned 70% by Capstone
and 30% by Korea Resources Corporation ("KORES").

Far West shareholders will be entitled to elect to receive, in exchange
for each Far West share held, (i) 1.825 shares of Capstone and C$1.00 in
cash, or (ii) 2.047 shares of Capstone and C$0.001 in cash, or (iii) C$9.19
cash, subject to proration on the basis of an aggregate maximum cash amount
of approximately up to C$79 million and provided that no Far West shareholder
that elects option (iii) above will receive less than C$1.00 in cash per Far
West share.

Shareholders of Capstone and security holders of Far West will each vote
on the Arrangement Agreement at special meetings to be held concurrently on
June 13, 2011 and if it is approved at both meetings, the proposed
transaction is expected to become effective on or about June 16, 2011. The
directors, senior officers, Quadra FNX and certain other shareholders of Far
West, representing 38% of the filly-diluted Far West shares outstanding as at
May 11, 2011, have entered into voting support agreements with Capstone,
whereby they have agreed to vote their Far West shares in favor of the
Arrangement Agreement. Capstone's directors and senior management have
entered into voting support agreements to vote their Capstone shares in
favour of the Arrangement Agreement and Capstone's largest shareholder, Pala
Investments Holding Limited, holding 19.6% of Capstone's issued and
outstanding shares as at May 13, 2011, has advised Capstone management that
it intends to vote its Capstone shares in favor of the Arrangement Agreement.

Capstone has also agreed to form a long-term strategic partnership with
KORES for the development of Far West's Santo Domingo Project. Concurrent
with the completion of the Arrangement Agreement, KORES (through an
affiliated company) will (i) acquire a 30% interest in the entity that will
own the Santo Domingo project for cash consideration of up to approximately
C$210 million to Capstone, and (ii) subscribe for an approximate 11% interest
in Capstone, at a price of C$4.35 per share, for aggregate cash consideration
of approximately C$170-183 million subject to completion of the Far West

Full details of the proposed transaction are contained in the Information
Circular that has been mailed to Capstone shareholders. A copy of the
Information Circular and related documentation has been filed with Canadian
securities regulators and is available at the SEDAR website at under Capstone's profile.

Forward-Looking Statements

This document may contain "forward-looking information" within the
meaning of Canadian securities legislation and "forward-looking statements"
within the meaning of the United States Private Securities Litigation Reform
Act of 1995 (collectively, "forward-looking statements"). These
forward-looking statements are made as of the date of this document.

Forward-looking statements relate to future events or future performance
and reflect Capstone management's expectations or beliefs regarding future
events and include, but are not limited to, statements with respect to the
timing and implementation of the proposed transaction and the integration of
Capstone and Far West following the transaction. Assumptions upon which such
forward-looking statements are based include that Capstone and Far West will
be able to satisfy the conditions in the Arrangement Agreement, that the
required approvals will be obtained from the shareholders of each of Capstone
and Far West, that all third party, court, regulatory and governmental
approvals to the transaction will be obtained, tax treatment of the
transaction and that all other conditions to completion of the transaction
will be satisfied or waived. Many of these assumptions are based on factors
and events that are not within the control of Capstone and there is no
assurance they will prove to be correct.

In certain cases, forward-looking statements can be identified by the use
of words such as "plans", "expects" or "does not expect", "is expected",
"budget", "potential", "scheduled", "estimates", "forecasts", "intends",
"anticipates" or "does not anticipate", or "believes", or variations of such
words and phrases or statements that certain actions, events or results
"may", "could", "would", "might" or "will be taken", "occur" or "be achieved"
or the negative of these terms or comparable terminology. By their very
nature forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of Capstone to be materially different from any
future results, performance or achievements expressed or implied by the
forward-looking statements. Such factors include, among others, risks related
to actual results of current exploration and development activities; changes
in project parameters as plans continue to be refined; future prices of
metals; possible variations in mineral reserves, grade or recovery rates;
accidents, labour disputes and other risks of the mining industry; delays in
obtaining governmental approvals or financing or in the completion of
development or construction activities; as well as those factors detailed
from time to time in Capstone's interim and annual financial statements and
management's discussion and analysis of those statements, all of which are
filed and available for review on SEDAR at Although
Capstone has attempted to identify important factors that could cause actual
actions, events or results to differ materially from those described in
forward-looking statements, there may be other factors that cause actions,
events or results not to be as anticipated, estimated or intended. Capstone
provides no assurance that forward-looking statements will prove to be
accurate, as actual results and future events could differ materially from
those anticipated in such statements.

Accordingly, readers should not place undue reliance on forward-looking

    For further information:
    Capstone Mining Corp.
    Cindy Burnett, VP Investor Relations
    Telephone: +1-604-637-8157


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