Capstone Second Quarter Production Results

By Capstone Mining Corp., PRNE
Tuesday, July 5, 2011

VANCOUVER, July 6, 2011 -

Second Quarter
Production of 21.2 million pounds of Copper in Concentrates

Capstone Mining Corp. (TSX: CS) today announced its operating
results for the three and six months ended June 30, 2011 from its
two operating mines, Cozamin and Minto. Combined production
totalled 21.2 and 37.9 million pounds of copper in concentrates in
the second quarter and first six months, respectively, with
additional by-products of lead, zinc, silver and gold.

“We are very pleased to report a 27% increase in production over
the first quarter of this year,” said Darren Pylot, President and
CEO of Capstone.  “We achieved quarterly throughput records at
both Cozamin and Minto, and a quarterly copper production record at
Cozamin.  With both mines now running on plan, we are on
target to meet our full year 2011 guidance of 80-85 million pounds
of copper in concentrates,” continued Mr. Pylot.

Q2 2011 Production

                           Q1 2011 Q2 2011 YTD 2011
    Copper in concentrates
    (millions of pounds)
    - Cozamin                8.6    10.4     19.0
    - Minto                  8.1    10.8     18.9
    Total                   16.7    21.2     37.9

Highlights for the three and six months ended June 30, 2011

The following is a summary of operational highlights for
Capstone during the three and six months, respectively, ended June
30, 2011

  • Production of 21.2 and 37.9 million pounds of copper contained
    in concentrates, respectively.
  • By-product production of 4.5 and 8.7 million pounds of zinc,
    1.0 and 1.7 million pounds of lead and 479,690 and 847,396 ounces
    of silver in concentrates, respectively.  Final gold
    production is not available since assaying is done off site, but is
    estimated at 6,842 and 9,437 ounces for the respective
  • At Cozamin, remediation activities in the mine were completed
    in March, allowing production from the Avoca and 11E stopes to
    proceed at planned levels.  This contributed to higher mined
    and processed tonnages for the second quarter relative to the first
  • At Minto, production exceeded expectations due to the
    successful implementation of pre-crushing for the SAG mill feed.

    • The implementation of contract pre-crushing starting in
      mid-April allowed mill throughput to exceed expectations.  May
      mill throughput set a monthly record of 115,913 tonnes, or 3,739
      tonnes/day, and June throughput has continued above plan.
    • Mill grades were higher than planned in the second quarter due
      to the delayed entry into the final stage of the Main Pit (Stage
      5).  Mining of Stage 5, originally planned for the first
      quarter, was completed in late-April with ore production slightly
      exceeding expectations.  As a result, less lower grade
      stockpile material was processed in the second quarter.
    • Higher mill throughput and grade was partially offset by
      reduced mill recovery.  The reduced recovery is partly due to
      higher throughput and attendant reduced retention time in the
      floatation circuit.  However, issues with the efficiency of
      the scavenger flotation circuit have been identified and are being
      corrected, with measurable improvement seen by late-June.
  • Minto received the amended Quartz Mining License in April and
    Area 2 pre-stripping and development of the underground portal is

Q2 Operating

                                    Cozamin          Minto
                                  Q2      YTD     Q2      YTD
                                 2011    2011    2011    2011
    Production [(1)]
    (contained in concentrates)
    - Copper (000s pounds)       10,398  19,007  10,807  18,871
    - Lead (000s pounds)            987   1,745       -       -
    - Zinc (000s pounds)          4,523   8,698       -       -
    - Silver (ounces)           413,579 739,061  66,111 108,335
    - Gold (ounces)                   -       -   6,512   9,437
    - Tonnes of ore mined       284,063 510,194 287,011 580,470
    - Tonnes processed          271,387 497,442 320,144 578,301
    - Tonnes processed per day    2,982   2,748   3,518   3,195
    - Copper grade (%)             1.87    1.87    1.73    1.64
    - Lead grade (%)               0.26    0.24       -       -
    - Zinc grade (%)               1.12    1.15       -       -
    - Silver grade (g/t)           65.3    63.9     8.4     7.4
    - Gold grade (g/t)                -       -    0.83    0.68
    - Copper (%)                   92.9    92.7    88.5    90.1
    - Lead (%)                     64.3    65.0       -       -
    - Zinc (%)                     67.7    68.7       -       -
    - Silver (%)                   72.6    72.3    76.9    78.5
    - Gold grade (%)                  -       -    80.3    75.1
    Concentrates [(1)]
    - Copper concentrates (dmt)  17,839  32,510  13,580  23,342
    - Copper (%)                   26.4    26.5    36.1    36.7
    - Silver (g/t)                  636     620     151     144
    - Gold (g/t)                      -       -    15.7    12.6
    - Lead concentrates(dmt)        712   1,245       -       -
    - Lead (%)                     62.9    63.6       -       -
    - Silver (g/t)                2,157   2,285       -       -
    - Zinc concentrates (dmt)     4,157   8,101       -       -
    - Zinc (%)                     49.3    48.7       -       -

(1) Adjustments based on final
settlements will be made in future periods.


Based on the significantly improved operating results in the
second quarter, Capstone reaffirms full year 2011 guidance of 80-85
million pounds of copper in concentrates.  Cozamin production
is expected to continue to stabilize at higher levels as additional
stopes are placed into production to provide for increased
flexibility in mine planning.  At Minto, contract pre-crushing
will continue until permanent improvements are implemented later in
the year.  It is expected that this will allow Minto to
maintain the increased throughput for the remainder of the year
rather than the gradual ramp-up in tonnage previously expected with
the completion of the crushing circuit modifications planned for
the fourth quarter.

Q2 Financial
Results Timing

Capstone will report 2011 second quarter financial results on
Monday, August 15, 2011 after market close, followed by a
conference call for investors and analysts on Tuesday, August 16,
at 11:30 am Eastern time (8:30 am Pacific time).

Conference Call
and Webcast Details

Date: Tuesday, August 16, 2011
Time: 11:30 am Eastern Time (8:30 am Pacific Time)
Dial in: North America — 1.888.231.8191, International –
Webcast: href="">

Replay: North America — 1.800.642.1687, International –
Replay Passcode: 81625702

The conference call replay will be available until August 25,
. A transcript of the call will also be made available on
Capstone’s website ( href="">
within 24 hours of the call.

About Capstone
Mining Corp.

Capstone Mining Corp. is a TSX listed
Canadian mining company with two producing copper mines in the
Americas: the Cozamin copper-silver-zinc-lead mine located in
Zacatecas State, Mexico and the Minto copper-gold-silver mine in
Yukon, Canada.

Using its operations as a springboard, Capstone aims to grow
organically and through acquisitions in politically stable,
mining-friendly jurisdictions, with a focus in the Americas:
organic growth through continued mineral resource and reserve
expansions as well as expanding operations at its operating mines,
development of its large 70% owned Santo Domingo copper-iron-gold
project in Chile in partnership with Korea Resources Corporation,
development of its Kutcho copper-zinc-gold-silver project in
British Columbia and exploration at properties in Chile, British
and Australia. Capstone’s cash flow and strong balance
sheet provide the platform to enhance that growth profile. Capstone
is included in the S&P/TSX Composite Index and S&P/TSX
Global Mining Index. Additional information is available at

Cautionary Note
Regarding 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 Capstone Mining Corp. (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 mineral 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 href=""> 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. There can be 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.


Unless otherwise indicated, Capstone has prepared the technical
information in this news release (”Technical Information”) based on
information contained in the technical reports and news releases
(collectively the “Disclosure Documents”) available under Capstone
Mining Corp.’s company profile on SEDAR at href=""> 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.

John Sagman, P. Eng., Capstone’s Vice President, Technical
Services, a Qualified Person, reviewed all Technical Information
contained in this news release. In addition, Gregg Bush, Senior
Vice President and Chief Operating Officer for Capstone, reviewed
all Technical Information in this news release.

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

Website:  href="">


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