Capstone Reports Strong Second Quarter and Year-to-Date Results on Low Cost Production

VANCOUVER -

- Cash Flow from Operations (1) of US$22.6 million in Second Quarter and US $48.9 million in first 6 months of 2009

- 47.3 million Pounds of Payable Copper Produced at an Estimated Total Cash Cost (1) of $0.93 per payable pound

- All Amounts in US$ Unless Otherwise Specified

Capstone Mining Corp. (CS: TSX) today announced its financial results for the three and six months ended June 30, 2009. For the three months ended June 30, 2009, Capstone reported cash flow from mining operations(1) of $22.6 million ($0.12/share) on sales of 17.8 million pounds of copper. This compares to cash flow from operations(1) of $26.3 million ($0.16/share) on sales of 28.3 million pounds of copper in the first three months of 2009. The lower sales of copper metal are primarily a result of the timing of concentrate shipments with only one shipload of Minto concentrates sold in the second quarter versus two in the first. Cash flows were similar in the two periods as a result of significantly higher copper prices in the second quarter. During the first six months of 2009, Capstone reported cash flow from operations(1) of $48.9 million ($0.28/share) on sales of 45.1 million pounds of payable copper sold. Copper produced, as opposed to sold, in the first six months at Capstone’s two mines, Cozamin and Minto, totals 47.3 million pounds of payable copper at an estimated total cash cost(1) of $0.93 per payable pound.

Copies of Capstone’s financial statements and management’s discussion and analysis (”MD&A”) are available on Capstone’s website at www.capstonemining.com/investors/financials/. This release should be read in conjunction with the second quarter 2009 financial statements and MD&A. Capstone will hold a conference call Friday August 14, 2009 at 8:00 AM Pacific time (11:00 AM Eastern time) to discuss these results; call-in details are at the end of this release.

“Capstone’s second quarter 2009 financial results continued to be strong as a result of our low cost production from both our mines,” said Darren Pylot, Vice Chairman & CEO of Capstone Mining Corp. “Cash flow from mining operations(1) of $22.6 million, despite lower sales, reflects the higher copper price, quarter over quarter, the strong operational performance of our mines and low operating costs,” he said. “During this quarter, we also took the opportunity to restructure our balance sheet and, as of June 30, 2009, Capstone had approximately $111.6 million in working capital, including $70.4 million in unrestricted cash, total debt was reduced to $29.3 million, we have a $40.0 million undrawn bank facility and investments with a market value of $21.6 million on June 30, 2009.”

“Capstone’s two operations, the Cozamin and Minto mines, continued to deliver strong copper production during the second quarter of 2009 following commissioning of their most recent expansions in the prior quarter,” said Stephen Quin, President & COO of Capstone Mining Corp. “While production was somewhat lower compared to the first quarter, our operations are well positioned to deliver favourable production and costs for the balance of 2009 while continuing our organic growth through exploration and production expansions,” he said. “Capstone’s modest hedge position has served us well in the first half of the year, generating approximately $23.8 million in cash over the past six months, but we are well exposed to upward copper price movements going forward having less than one third of the rest of this year’s forecast production hedged at $2.56 per pound.”

Highlights ————————————————————————- Three Months Ended Six Months Ended ————————————————————————- March 31, June 30, June 30, 2009 2009 2009 ————————————————————————- ————————————————————————- Earnings (loss) for the period ($ millions) (16.2) 25.8 9.6 ————————————————————————- Earnings (loss) per share (0.10) 0.14 0.05 ————————————————————————- Including: - Earnings from mining operations ($ millions) 19.7 18.6 38.3 ————————————————————————- - Loss on derivative instruments ($ millions) (35.4) (31.3) (66.7) ————————————————————————- - Gain on disposal of investments ($ millions) - 40.7 40.7 ————————————————————————- ————————————————————————- Adjusted Earnings (1) ($ millions) 30.5 16.8 47.3 ————————————————————————- Adjusted Earnings (1) per share 0.19 0.09 0.27 ————————————————————————- ————————————————————————- Cash flow from mining operations(1) ($ millions) 26.3 22.6 48.9 ————————————————————————- Cash flow from mining operations(1) per share 0.16 0.12 0.28 ————————————————————————- ————————————————————————- Working capital at end of period ($ millions) 77.0 111.6 111.6 ————————————————————————- ————————————————————————- Copper sold (millions lbs) 27.3 17.8 45.1 ————————————————————————- ————————————————————————- Payable copper produced (millions lbs) 25.1 22.2 47.3 ————————————————————————- Total cash cost(1) per payable pound of copper produced 0.91 0.97 0.93 ————————————————————————- Overview Financial and Production and Highlights for the Three Months Ended June 30, 2009 - Recorded net earnings of $25.8 million or $0.14 per common share which mainly included: - Earnings from mining operations of $18.6 million, - Gain on disposal of investments of $40.7 million, and - Net loss of $31.3 million on derivative instruments which is comprised of: - A realized gain of $5.7 million on positions settled during the period, and - An unrealized non-cash loss of $37.0 million on the reduction of the derivative instrument asset mark-to-market value over the period due to the increase in the copper price. - Adjusted net earnings(1) were $16.8 million or $0.09 per common share after making adjustments for certain non-cash and onetime items, including exclusion of non-cash loss on the reduction of derivative instrument asset and the gain on the disposal of investments. - Generated cash flow from mining operations(1) of $22.6 million or $0.12 per common share. - Working capital, which includes $70.4 million in unrestricted cash, increased to $111.6 million at June 30, 2009 from $77.0 million at March 31, 2009. - Sold 17.8 million pounds of copper, 6.6 million pounds of zinc, 2.1 million pounds of lead, 6,054 ounces of gold and 380,948 ounces of silver. - Produced a total of 22.2 million pounds of payable copper at an estimated total cash cost(1) of $0.97 per pound of payable copper. Financial and Production and Highlights for the Six Months Ended June 30, 2009 - Recorded net earnings of $9.6 million or $0.05 per common share which mainly included: - Earnings from mining operations of $38.3 million, - Gain on disposal of investments of $40.7 million, and - Net loss of $66.7 million on derivative instruments which is comprised of: - A realized gain of $23.8 million on positions settled during the period, and - An unrealized non-cash loss of $90.5 million on the reduction of the derivative instrument asset mark-to-market value over the period due to the increase in the copper price. - Adjusted net earnings(1) were $47.3 million or $0.27 per common share after making adjustments for certain non-cash and onetime items, including exclusion of non-cash loss on the reduction of derivative instrument asset and the gain on the disposal of investments. - Generated cash flow from mining operations(1) of $48.9 million or $0.28 per common share. - Working capital, which includes $70.4 million in unrestricted cash, increased to $111.6 million at June 30, 2009 from $35.4 million at December 31, 2008. - Sold 45.1 million pounds of copper, 7.5 million pounds of zinc, 3.8 million pounds of lead, and 17,362 ounces of gold and 877,157 ounces of silver. - Produced a total of 47.3 million pounds of payable copper at an estimated total cash cost(1) of $0.93 per pound of payable copper. Additional Highlights - Repaid $18.9 million of the Macquarie project loan facility (the “PLF”), $11.0 million of which was scheduled, with the balance representing early payments made at the Company’s election. These payments reduce the balance owing under the PLF to $11.0 million, which is now scheduled to be fully repaid by December 31, 2009. - Sold by way of a bought deal equity financing 31,165,000 common shares at a price of C$1.85 per common share for gross proceeds of C$57.7 million ($49.5 million). The net proceeds were used to repay debt, for future acquisition opportunities and general working capital purposes. - Repaid the $40.0 million balance on the Bank of Nova Scotia corporate revolving term credit facility (the “RTF”) with the proceeds of the private placement. The funds can be redrawn over the next three years but are subject to an $8.0 million reduction each six months starting January 2010. - Announced a new eight year life-of-mine plan for the Cozamin Mine with a mineral reserve estimate of 8.1 million tonnes grading 1.66% copper, 1.1% zinc, 0.3% lead and 60 grams per tonne silver. - Announced drill results from the Minto North discovery at the Minto Mine Phase 1 drill program, including some exceptional high- grade copper-gold intercepts over significant thicknesses - the best intercepts ever drilled on the Minto Mine property in 35 years of exploration. - Commenced Phase 2 drill program on Minto North in late June, with the objective of upgrading the mineralization at Minto North to standards suitable for detailed mine planning. - Announced assay results for exploration drill holes completed in areas south of the Minto Mine open pit, including several high- grade copper-gold intersections from the southeast portion of the Ridgetop deposit, an area not previously known for high-grade mineralization. - Announced the results of National Instrument 43-101 compliant mineral resource estimate for the Minto Mine which include the Minto Main pit (net of mining), Area 2/Area 118 deposits, the Ridgetop deposit and the Minto North deposit, providing an estimated increase in the measured and indicated mineral resource of 32% for contained copper, 38% for contained gold and 28% for contained silver over the last consolidated mineral resource estimate, reported in early 2007. - Reported a robust, high-grade resource for the Kutcho Copper Project with a measured and indicated mineral resource of 10.4 million tonnes grading 2.1% copper, 2.8% zinc, 0.4g/t gold and 32g/t silver. - Commenced internal evaluation of options for the development of a smaller tonnage, higher grade operation at Kutcho, likely with underground extraction of the ore. - Recorded a gain of $39.9 million on the 4,956,107 Silver Wheaton Corp. (”SLW”) shares received in exchange for all the Silverstone Resources Corp. (”SST”) shares and warrants held. Highlights Subsequent to the Three Months Ended June 30, 2009 - Completed 56 infill drill holes at Minto North, with the results for the first 20 holes released on August 10, 2009, confirming the high grade nature of the Minto North deposit. - Completed approved discharge of 300,000 cubic metres of excess water accumulated at the Minto Mine as a result of the melting of a high snowpack from the recent winter. - Commenced approved discharge of up to an additional 705,000 cubic metres of excess water which is sufficient to remove all of the water collected in the pit; mining of fresh ore within the pit is expected to resume by around the end of September 2009. Results of Operations - Cozamin Mine: - Benefited from the Phase III mine expansion to 3,000 tonnes per day (”tpd”) of throughput completed in the prior quarter and established access to some of the wider, higher grade ore zones that are now in production and some of which are anticipated to be accessed in the third quarter of 2009; - Produced 9.9 million pounds of contained copper in concentrates, along with by-product 2.3 million pounds of zinc, 3.3 million pounds of lead and 0.4 million ounces of silver; - Processed 249,975 tonnes (2,741 tpd) of ore averaging 1.92% copper, 1.01% zinc, 0.61% lead and 66 grams per tonne (”g/t”) silver and a single day record of 4,088 tonnes processed in June, with ore throughput constrained by ore availability from underground; - Produced 17,595 dmt of copper concentrate averaging 25.5% copper; and - Produced 9.5 million pounds of payable copper at a total cash cost(1) of US$0.81 per pound. - Minto Mine: - Benefited from the Phase III mine expansion to 3,200 tpd of mill throughput completed at the end of the first quarter, supported by increased mine production; - Produced 13.2 million pounds of contained copper in concentrates, along with 7,564 ounces of gold and 0.1 million ounces of silver as by-products; - Processed 267,254 tonnes (2,937 tpd) of ore averaging 2.41% copper, 1.0g/t gold and 9.6g/t silver and a single day record of 3,762 tonnes processed in July; - Produced 14,667 dmt of copper concentrate averaging 40.8% copper; - Produced 12.7 million pounds of payable copper at a total cash cost(1) of US$1.08 per pound. Outlook for 2009 The current year, continues to unfold positively for Capstone, based on the following: - Forecast production of 95 million to 105 million pounds of copper at a total estimated cash cost(1) of approximately $1.00 per pound, net of by product credits. - At the Cozamin Mine: - The Company provided guidance that the Cozamin Mine production in 2009 is expected to total 35 to 40 million pounds of copper in concentrates, with by-product lead, zinc and silver, at a total estimated cash cost of approximately $1.00 per pound. - This production will come principally from the recently accessed 9, 10 and 11 Levels of the mine, and the 12 Level, which is to be accessed in 2009. Grades are forecast to average approximately 2% copper for the year. This forecast is dependent on bringing the wide, higher grade stopes on line on schedule. - As noted in prior disclosure, access to some of these stopes has taken longer than anticipated, which will result in the third quarter being a lower than average production quarter but, given the mill’s ability to exceed design throughput on a sustained basis and the above average grade of these new stopes, any production shortfalls are anticipated to be recouped in the fourth quarter of 2009. - Following the investment in production expansions in prior years, capital expenditures of only $8.7 million are forecasted in 2009, including some remaining expenditures related to the Phase III expansion. The capital programs are primarily sustaining capital, capital equipment to support the expanded underground mining and modest efficiency and throughput improvements, as well as connecting the mine to a higher capacity power line that bypasses the city of Zacatecas. - As a result of the recently completed assessment of the exploration potential of the Cozamin property, plans for exploration at Cozamin will be adjusted upwards from the prior guidance of $0.3 million for 2009, with additional details to be provided when appropriate. - At the Minto Mine: - The Company provided guidance that the Minto Mine production in 2009 is expected to total 60 to 65 million pounds of copper, with by-product gold and silver, at a total cash cost of approximately $1.00 per pound. - The production for the remainder of the year will come from the Phase 3 South and 4 North of the Minto main pit and ore stockpiles. - As noted in prior disclosure, this forecast is dependent on the timing of removal of excess snow melt water collected in the pit during freshet. This excess water has delayed re-entry to the open pit post-freshet and limited processing to lower grade stockpiles. - Now that permission to discharge the excess water has been given by the Yukon Water Board, the Company will reforecast is outlook for the remainder of the year to determine whether its guidance needs to be adjusted. However, given the mill’s proven ability to outperform its design parameters and the presence of some very high grades in the Phase 3 South and Phase 4 North of the pit, processing higher than budgeted grades at higher throughputs provide opportunities to still meet forecast. - The June 2009 update of mineral resource estimates provides the basis for an independent pre-feasibility study designed to (a) convert a significant portion of these new mineral resources to mineral reserves and (b) incorporate a further Phase IV increase in mining and throughput, perhaps to somewhere in the range of 4,000tpd to 5,000tpd; - Capital expenditures of approximately $9.3 million comprised of $5.4 million in process plant improvements and sustaining capital, plus an additional $3.9 million in exploration expenditures on the Minto Mine property. Some additional capital may be incurred in 2009 related to implementation of the new water management plan recently submitted to regulators; and - Continued exploration focused on following up on the new, high grade, shallow Minto North discovery, both with in-fill drilling and exploring for more such deposits. - Strong cash flow from operations based on the above noted production and current metal prices, combined with 16.4 million pounds of copper forward sold in the remainder of 2009 at an average price of $2.56 per pound. - A preliminary economic assessment is expected to be completed in Q3/09 based on the new mineral resource estimate that was completed and announced in February 2009 for all three of the deposits (Main, Sumac and Esso) at the Kutcho Project. This study assesses potential development options, including open pit and/or underground extraction of some or all of the mineral resources and will provide the basis for additional work on the project. Only minimal exploration work is planned for 2009, and is primarily focused on regional targets.

Conference Call Details

Capstone will host a conference call on Friday, August 14, 2009 to discuss these results. The conference call and webcast details are as follows:

Date: Friday August 14, 2009 Time: 8:00 AM PT (11:00 AM ET) Dial in: North America - 1.800.595.8550, International - 1.416.644.3422 Webcast: www.newswire.ca/en/webcast/viewEvent.cgi?eventID(equal sign) 2740540 Replay: North America - 1.877.289.8525, International - 1.416.640.1917 Replay Pass code: 21311141 followed by the number sign.

The conference call replay will be available until August 28, 2009. A transcript of the call will also be made available on Capstone’s website (www.capstonemining.com) within 24 hours of the call.

The TSX does not accept any responsibility for the adequacy or accuracy of this press release.

Forward-Looking Information

“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 and the Company does not intend, and does not assume any obligation, to update these forward-looking statements, except as required under applicable securities legislation.

Forward-looking statements relate to future events or future performance and reflect Company management’s expectations or beliefs regarding future events and include, but are not limited to, statements with respect to the estimation of mineral reserves and mineral resources, the realization of mineral reserve estimates, the timing and amount of estimated future production, costs of production, capital expenditures, success of mining operations, environmental risks, unanticipated reclamation expenses, title disputes or claims and limitations on insurance coverage. 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”, “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 the Company 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 activities; changes in project parameters as plans continue to be refined; future prices of resources; possible variations in ore 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 the Company’s interim and annual financial statements and management’s discussion and analysis of those statements, all of which are filed and available for review under the Company’s profile on SEDAR at www.sedar.com. Although the Company 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. The Company 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 statements.

43-101 Compliance

Unless otherwise indicated, Capstone has prepared the technical information in this document (”Technical Information”) based on information contained in the technical reports and news releases (collectively the “Disclosure Documents”) available under Capstone Mining Corp.’s and Sherwood Copper Corp.’s company profile on SEDAR at www.sedar.com. Each Disclosure Document was prepared by or under the supervision of a qualified person (a “Qualified Person”) as defined in National Instrument 43-101 - Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators (”NI 43-101″). Readers are encouraged to review the full text of the Disclosure Documents which qualifies the Technical Information. Readers are advised that mineral resources that are not mineral reserves do not have demonstrated economic viability. The Disclosure Documents are each intended to be read as a whole, and sections should not be read or relied upon out of context. The Technical Information is subject to the assumptions and qualifications contained in the Disclosure Documents.

The disclosure in this document of technical information has been prepared under the supervision of Stephen Quin, Professional Geologist, a Qualified Person under NI 43-101.

(1) These are non-GAAP performance measures and readers should refer to Non-GAAP Performance Measures in the Company’s Interim Management Discussion and Analysis for the three and six months ended June 30, 2009 as filed on SEDAR for further details.

For further information: about Capstone, please contact: Darren Pylot, Vice Chairman & CEO or Stephen Quin, President & COO Or Investor Relations’ Mark Patchett at +1-604-684-8894 or +1-866-684-8894; info@capstonemining.com

Source: Capstone Mining Corp.

For further information: about Capstone, please contact: Darren Pylot, Vice Chairman & CEO or Stephen Quin, President & COO Or Investor Relations’ Mark Patchett at +1-604-684-8894 or +1-866-684-8894; info at capstonemining.com