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Last updated on April 16, 2014 at 17:34 EDT

Capstone Upgrades Copper Mineral Resource Classification in Footwall Zone at Cozamin Mine

March 7, 2013

Moves 92 million pounds of copper from Inferred to Indicated Resource
Classification

VANCOUVER, March 7, 2013 /PRNewswire/ – Capstone Mining Corp. (“Capstone”)
(TSX: CS) today announced the results of an updated National Instrument
43-101 (“NI 43-101″) compliant mineral resource estimate for the Mala
Noche Footwall Zone (“MNFWZ”) at the Cozamin Mine in Zacatecas, Mexico.
Drilling in the MNFWZ since the last resource update in February of
2012 has converted 92 million pounds of copper from the Inferred
category to the Indicated category. This reflects drilling that was
completed in the latter half of 2011 and most of 2012 that was not
included in the last estimate. At a US$35 net smelter return (“NSR”)
cut-off grade (“COG”), the Cozamin Mine’s total Measured and Indicated
(“M&I”) mineral resources at December 31, 2012, including adjustments
for mining, were 430 million pounds of copper.

“We are pleased to report another successful year of drilling at
Cozamin, which targeted the MNFWZ Inferred resource for classification
upgrade,” said Brad Mercer, Capstone’s Vice President of Exploration.
“The M&I copper resource at the MNFWZ now stands at 189 million pounds,
87 million pounds of which have already been converted into a mineral
reserve. This additional 92 million pounds of mineral resource now in
the M&I class will be targeted by mine engineering for potential
conversion into mineral reserves during 2013. Both the Mala Noche Vein
and MNFWZ remain open and are the target of 20,000 metres of drilling
from underground this year in a US$4.5 million exploration program.”

Mineral Resource Estimate by Class for the MNFWZ, Dec. 31, 2012, at a
US$35 NSR COG*

     _____________________________________________________________________
    |            |       |      |      |    |Contained|Contained|Contained|
    |            |Tonnes |Copper|Silver|Zinc| Copper  | Silver  |  Zinc   |
    |            |(000's)| (%)  |(g/t) |(%) | (M lbs) | (M oz)  | (M lbs) |
    |____________|_______|______|______|____|_________|_________|_________|
    |Measured (M)|   400 | 2.09 | 44.9 |0.43|   18.4  |    0.6  |    3.8  |
    |____________|_______|______|______|____|_________|_________|_________|
    |Indicated   |       |      |      |    |         |         |         |
    |(I)         | 4,400 | 1.75 | 33.7 |0.25|   169.8 |    4.8  |   24.1  |
    |____________|_______|______|______|____|_________|_________|_________|
    |Total M&I   | 4,810 | 1.78 | 34.7 |0.26|   188.6 |    5.4  |   27.9  |
    |____________|_______|______|______|____|_________|_________|_________|
    |Inferred    | 1,410 | 1.80 | 29.7 |0.21|   56.0  |    1.3  |    6.6  |
    |____________|_______|______|______|____|_________|_________|_________|

    * Metal Price assumptions (in USD) used to calculate the NSR COG for
    all deposits are: Cu=$2.50; Zn=$0.80; Ag=$20.00.

    Processing recoveries used to calculate the NSR COG for the MNFWZ
    Resource are: Cu=92%; Zn=69%; Ag=72%. Totals may not sum exactly due to
    rounding.

Mineral Resource Estimate by Class for all Copper Deposits, Dec. 31,
2012, at a US$35 NSR COG*

     _____________________________________________________________________
    |            |       |      |      |    |Contained|Contained|Contained|
    |            |Tonnes |Copper|Silver|Zinc| Copper  | Silver  |  Zinc   |
    |            |(000's)| (%)  |(g/t) | (%)| (M lbs) | (M oz)  | (M lbs) |
    |____________|_______|______|______|____|_________|_________|_________|
    |Measured (M)| 3,780 | 1.63 | 65.4 |1.42|   135.6 |    8.0  |   118.6 |
    |____________|_______|______|______|____|_________|_________|_________|
    |Indicated   |       |      |      |    |         |         |         |
    |(I)         | 9,120 | 1.42 | 43.2 |1.07|   285.1 |   12.7  |   216.0 |
    |____________|_______|______|______|____|_________|_________|_________|
    |Total M&I   |12,910 | 1.48 | 49.7 |1.18|   421.1 |   20.6  |   334.7 |
    |____________|_______|______|______|____|_________|_________|_________|
    |Inferred    | 3,360 | 1.39 | 35.7 |0.90|   102.8 |    3.9  |   67.0  |
    |____________|_______|______|______|____|_________|_________|_________|

    * Metal Price assumptions (in USD) used to calculate the NSR COG for
    all deposits are: Cu=$2.50; Zn=$0.80; Ag=$20.00.

    Processing recoveries used to calculate the NSR COG for the MNFWZ
    Resource are: Cu=92%; Zn=69%; Ag=72%

    Processing recoveries used to calculate the NSR COG for the San Roberto
    Resource are: Cu=92%; Zn=69%; Ag=62%. Totals may not sum exactly due to
    rounding.

The foregoing tables represent the Mala Noche Vein and MNFWZ copper
zones only, and do not include the San Rafael zone, which is
predominately a zinc zone.

Mineral resources that are not mineral reserves do not have demonstrated
economic viability. Mineral resource estimates do not account for
mineability, selectivity, mining loss and dilution. These mineral
resource estimates include inferred mineral resources that are normally
considered too speculative geologically to have economic considerations
applied to them that would enable them to be categorized as mineral
reserves. Even though mining has been undertaken in areas of the MNFWZ
with Proven and Probable class mineral reserves there is no certainty
that Inferred mineral resources will be converted to Measured and
Indicated categories through further drilling, or into mineral
reserves, once economic considerations are applied.

Mineral Resource Estimate Methodology

The mineral resource estimate for the MNFWZ reported herein was prepared
by independent consultant Ali Shahkar P.Eng., Principal Consultant with
Lions Gate Geological Consulting Inc. (“LGGC”) located in Sechelt, BC,
Canada. The estimate was completed using GEMS© software using a three
dimensional block model (10 metre by 5 metre by 3 metre block
size). The MNFWZ model is comprised of three interpreted
three-dimensional wireframes, a background domain which encompasses the
overall MNFWZ structure and two veins which occur close to the
hanging-wall and foot-wall of the background domain. The two vein
wireframes were used as hard boundaries to constrain the interpolation
of grades into the block model. Interpolation parameters have been
derived based on geostatistical analysis conducted on 0.5 metre
composited drill hole and channel sample data.  Block grades have been
estimated using Ordinary Kriging (OK) method and the mineral resources
have been classified based on proximity to sample data and the
continuity of mineralization in accordance with CIM best practices. The
MNFWZ resource has been estimated using a total of 173 diamond drill
holes (2324 composites) and 3277 channel sample composites.

About Capstone Mining Corp.

Capstone Mining Corp. is a Canadian base metals mining company,
committed to the responsible development of our assets and the
environments in which we operate. We are preferentially focused on
copper, 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 Canada,
Chile, Mexico and Australia. Using our cash flow and strong balance
sheet as a springboard, Capstone’s growth aims to come from continued
mineral resource and reserve expansions, exploration, and through
acquisitions in politically stable, mining-friendly regions. Our
headquarters are in Vancouver, Canada and we are listed on the TSX.
Further information is available at www.capstonemining.com.

Quality Assurance

The technical information in this news release has been prepared in
accordance with Canadian regulatory requirements set out in National
Instrument 43-101 Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators (“NI 43-101″) and supervised
and reviewed by Brad Mercer, P. Geol., Capstone’s Vice President,
Exploration, a “Qualified Person” as defined in National Instrument
43-101 and the person who oversees exploration activities on the
Cozamin Mine property.  In addition, Gregg Bush, Capstone’s Senior Vice
President and Chief Operating Officer, reviewed and approved this news
release.

The mineral resource estimate reported herein for the MNFWZ has been
produced by independent consultant Ali Shahkar P.Eng, of Lions Gate
Geological Consulting Inc.  Mr. Shahkar is the Independent Qualified
Person under NI 43-101 responsible for the MNFWZ mineral resource
estimate and has reviewed the information in this release in respect of
the MNFWZ mineral resource estimate.  The mineral resources presented
herein have been estimated in conformity with generally accepted CIM “Estimation of Mineral Resource and Mineral Reserves Best Practices” guidelines and are reported in accordance with Canadian Securities
Administrators’ National Instrument 43-101.  Mineral resources are not
mineral reserves and do not have demonstrated economic viability.

Analyses for copper, zinc, lead, silver and gold were completed by ALS
Chemex using the following method. The entire sample is crushed to a
minimum of 70% minus 10 mesh. A 250g subsample of the crushed material
is then pulverized to 85% minus 200 mesh. Gold and silver grades are
determined by gravimetric fire assay using a 50g charge taken from the
pulverized material. Copper, zinc and lead are determined by ICP
analysis after 4 acid digestion of a 0.4g subsample of the pulverized
material.  Blank, standard and duplicate samples are used for quality
assurance and quality control.

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. 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”, “outlook”, “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. In this document certain
forward-looking statements are identified by words including
“scheduled”, “guidance”, “plan”, “planned”, “estimated”, “projections”,
“projected” and “expected”. 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; availability of infrastructure required for the
development of mining projects; 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 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.

Cautionary Note to United States Investors

This news release contains disclosure that has been prepared in
accordance with the requirements of Canadian securities laws, which
differ from the requirements of U.S. securities laws. Without limiting
the foregoing, this news release uses the terms “indicated” and
“inferred” resources. U.S. investors are cautioned that, while such
terms are recognized and required by Canadian securities laws, the SEC
does not recognize them. Under U.S. standards, mineralization may not
be classified as a “reserve” unless the determination has been made
that the mineralization could be economically and legally produced or
extracted at the time the reserve determination is made. U.S. investors
are cautioned not to assume that all or any part of indicated resources
will ever be converted into reserves. U.S. investors should also
understand that “inferred resources” have a great amount of uncertainty
as to their existence and as to whether they can be mined legally or
economically. It cannot be assumed that all or any part of “inferred
resources” will ever be upgraded to a higher category. Therefore, U.S.
investors are also cautioned not to assume that all or any part of
inferred resources exist, or that they can be mined legally or
economically. Accordingly, information concerning descriptions of
mineralization and resources contained in this news release may not be
comparable to information made public by U.S. companies subject to the
reporting and disclosure requirements of the SEC.

 

 

 

SOURCE Capstone Mining Corp.


Source: PR Newswire