Capstone Third Quarter Production Results

VANCOUVER, October 6, 2011 -

Third Quarter Production of 20.6 million pounds of Copper in Concentrates

Capstone Mining Corp. (TSX: CS) today announced its operating results for the three and nine months ended September 30, 2011 from its two operating mines, Cozamin and Minto. Combined production totalled 20.6 and 58.5 million pounds of copper in concentrates in the third quarter and first nine months, respectively, with additional by-products of lead, zinc, silver and gold.

“Both of our mines achieved record throughput levels this quarter,” said Darren Pylot, President and CEO of Capstone.  “With these higher throughput levels and additional throughput planned at Cozamin in the fourth quarter, we remain on target to meet our full year 2011 guidance of 80-85 million pounds of copper in concentrates,” continued Mr. Pylot.

Q3 2011 Production

                           Q1 2011 Q2 2011 Q3 2011 YTD 2011
    Copper in concentrates
    (millions of pounds)
    - Cozamin                8.6    10.4    10.3     29.3
    - Minto                  8.1    10.8    10.3     29.2
    Total                   16.7    21.2    20.6     58.5

Operational Highlights for the three and nine months ended September 30, 2011

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

• Production of 20.6 and 58.5 million pounds of copper contained in concentrates, respectively.
• By-product production of 5.5 and 14.2 million pounds of zinc, 1.0 and 2.7 million pounds of lead and 441,731 and 1,289,127 ounces of silver in concentrates, respectively.  Final gold production is not available since assaying is conducted off-site, but is estimated at 5,111 and 14,548 ounces for the respective periods.
• At Cozamin, mining productivity continued to improve in the third quarter, resulting in both record ore mined for the quarter and record average mill throughput of 3,215 tonnes per day.
• Milled ore grade at Cozamin was slightly lower than the previous quarter due to the areas mined.  Grade is expected to increase in the fourth quarter as full production is planned from the higher grade Avoca area.
• At Minto, mill throughput continued above expectations due to the successful implementation of pre-crushing for the SAG mill feed. Throughput exceeded the previous quarterly record, averaging 3,729 tonnes per day in the third quarter.
• Minto copper recovery was lower in the quarter due to quantities of oxide ore mixed in portions of the low-grade stockpiles.  Modifications in the flotation circuit are increasing the recovery on this material and are expected to increase recovery on the partially oxidized material that will be processed in the fourth quarter.
• Milled ore grade continued to decline at Minto as remaining stockpiled high-grade sulphide ore was largely consumed.  Grades will increase slightly in the fourth quarter as higher grade stockpiles of partially oxidized ore are blended into the mill feed.

Q3 Operating Details

                                     Cozamin            Minto
                                   Q3        YTD     Q3      YTD
                                  2011      2011    2011    2011
    Production (1)
    (contained in concentrates)
    - Copper (000s pounds)       10,307    29,313  10,346  29,217
    - Lead (000s pounds)            988     2,733    -       -
    - Zinc (000s pounds)          5,520    14,218    -       -
    - Silver (ounces)           394,717 1,133,778  47,014 155,349
    - Gold (ounces)                   -         -   5,111  14,548
    Mine
    - Tonnes of ore mined       292,667   802,861  95,238 675,708
    Mill
    - Tonnes processed          295,761   793,203 343,058 921,359
    - Tonnes processed per day    3,215     2,906   3,729   3,375
    - Copper grade (%)             1.71      1.81    1.56    1.61
    - Lead grade (%)               0.24      0.24       -       -
    - Zinc grade (%)               1.23      1.18       -       -
    - Silver grade (g/t)           58.5      61.9    5.37    6.66
    - Gold grade (g/t)                -        -     0.55    0.64
    Recoveries
    - Copper (%)                   92.5      92.6    87.4    89.1
    - Lead (%)                     63.3      64.4       -       -
    - Zinc (%)                     69.1      68.8       -       -
    - Silver (%)                   71.0      71.8    79.3    78.7
    - Gold (%)                        -        -     84.2    76.5
    Concentrates (1)
    - Copper concentrates (dmt)  17,890    50,400  12,869  36,211
    - Copper (%)                   26.1      26.4    36.5    36.6
    - Silver (g/t)                  591       611   113.6   133.4
    - Gold (g/t)                      -         -    12.4    12.5
    - Lead concentrates (dmt)       706     1,951       -       -
    - Lead (%)                     63.5      63.5       -       -
    - Silver (g/t)                2,404     2,328       -       -
    - Zinc concentrates (dmt)     5,042    13,143       -       -
    - Zinc (%)                     49.7      49.0       -       -

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

Outlook

Capstone reaffirms full year 2011 production guidance.  With year to date production of 58.5 million pounds of copper in concentrates and both mines presently operating on plan, the expectation is that production will reach 80 million pounds for the year.  In the fourth quarter, production at Cozamin is expected to be at, or above, third quarter levels as the mine plan calls for higher grade ore.  At Minto, the successful contract pre-crushing will continue until permanent improvements are implemented, and continuing high throughput is expected to offset the processing of lower grade material from stockpile.

Q3 Financial Results Timing

Capstone will report 2011 third quarter financial results on Monday, November 7, 2011 after market close, followed by a conference call for investors and analysts on Tuesday, November 8, 2011 at 11:30 am Eastern time (8:30 am Pacific time).

Conference Call and Webcast Details

    Date:     Tuesday, November 8, 2011
    Time:     11:30 am Eastern Time (8:30 am Pacific Time)
    Dial in:  North America - 1.888.231.8191, International - 1.647.427.7450
    Webcast:  www.newswire.ca/en/webcast/viewEvent.cgi?eventID=3688080
    Replay:   North America - 1.855.859.2056, International - 1.416.849.0833
    Replay
    Passcode: 15954378

The conference call replay will be available until November 22, 2011. A transcript of the call will also be made available on Capstone’s website (capstonemining.com/s/ConferenceCalls.asp) within 24 hours of the call.

About Capstone Mining Corp.

Capstone Mining Corp. is a Canadian mining company with two producing copper mines, the Cozamin copper-silver-zinc-lead mine located in Zacatecas State, Mexico and the Minto copper-gold-silver mine in Yukon, Canada.  In addition, Capstone has two development projects, the large scale 70% owned Santo Domingo copper-iron-gold project in Chile in partnership with Korea Resources Corporation and the 100% owned Kutcho copper-zinc-gold-silver project in British Columbia, as well as exploration at properties in Chile, British Columbia and Australia. Using its cash flow and strong balance sheet as a springboard, Capstone aims to grow organically through continued mineral resource and reserve expansions and through acquisitions in politically stable, mining-friendly regions. Capstone is included in the S&P/TSX Composite Index and S&P/TSX Global Mining Index. Additional information is available at www.capstonemining.com.

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; dependence on key personnel; labour pool constraints; labour disputes; delays in obtaining governmental approvals or financing or in the completion of development or construction activities; and other risks of the mining industry 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. 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.

43-101 Compliance

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 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.

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: cburnett@capstonemining.com
Website: www.capstonemining.com

.