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Capstone Completed Pre-feasibility Study on Phase IV Expansion of Minto Copper-Gold Mine

December 15, 2009

Study Extends Mine Life, Sustains Higher Production and Identifies Focus for Phase V Expansion

VANCOUVER, Dec. 15 /PRNewswire-FirstCall/ – Capstone Mining Corporation (CS: TSX) today reported the results of a pre-feasibility study for the Phase IV expansion (“Phase IV PFS”) of its high grade Minto copper-gold mine in the Yukon. This study details the basis of ramp up in mill throughput to a nominal 4,100 tonnes per day (“tpd”) throughput and 91.3% availability, resulting in 1.37 million tonnes per year processed in an optimised mill, with ore to be extracted from new mineralized areas discovered since 2006. The Phase IV PFS results in a total of 366 million pounds of copper in concentrate produced over an eight year mine life, commencing January 2010. Permit amendments are required for production in 2012 and beyond.

The Phase IV PFS also discusses two possible options for further increases in production and/or increases in mine life and mineral reserves: (1) a possible further increase in mill capacity to 7,500 tpd of throughput, focused on open pit mining of mineral resources outside of the current proposed open pits, and (2) the possible development of a 1,000-2,000 tpd underground mine to provide higher grade feed relatively earlier in the mine life than an expanded open pit operation. On preliminary analysis, the underground option appears to have a more attractive investment profile. As a result, the underground option will be prioritized in 2010, offering the potential for higher production than outlined in the Phase IV PFS.

“This Phase IV pre-feasibility study represents another significant milestone in the development of the Minto Mine,” said Stephen Quin, President & COO of Capstone Mining. “The Minto Mine continues to deliver increases in mineral resources that we have successfully translated into increased mineral reserves, copper production and mine life,” he said. “Furthermore, as a result of the successful exploration in 2006-2009, the Phase IV PFS outlines an attractive option for yet more increases in the future, and we are already planning how to crystallize this potential additional value, likely focused on the development of an underground mine operating in parallel with the open pits. This could allow higher feed grade, which could result in higher annual copper production and an extended mine life.”

    Phase IV PFS Highlights
    -----------------------

Brief highlights of the Phase IV PFS are summarized below, while additional detail follows:

    -   Increase in mill throughput to 4,100 tonnes per operating day,
        resulting in a sustained 1.37 million tonnes of ore per year
        (3,750tpd after allowances for maintenance and availability);

    -   Proven and probable mineral reserves increased to 10.9 million tonnes
        grading 1.64% copper, 0.64 g/t gold, and 5.9 g/t silver, for a
        contained 395 million lbs of copper, 224,000 oz of gold, and
        2.0 million oz of silver;

    -   Mine life extended to 2018 with an average of 45 million pounds of
        copper production per year, with additional upside opportunities
        identified, as discussed below;

    -   Life-of-mine capital cost of C$48.2 million, primarily based on an
        assumption of conversion to self mining, which decision will be
        subject to a cost-benefit analysis vs. remaining with contract
        mining;

    -   Life-of-mine cash costs of US$1.34/lb of copper, after by-product
        credits (with gold at US$300/oz and silver at US$3.90/oz, as per the
        agreement with Silver Wheaton);

    -   Net present value, at a constant US$2.25/lb copper price for unhedged
        production and a 7.5% discount rate, of C$199 million before tax and
        C$160 million after tax, which amounts increase to C$291 million
        before tax and C$218 million after tax at a flat US$2.60/lb copper
        price for unhedged production, and to C$395 million before tax and
        C$281 million after tax at a flat US$3.00/lb copper price for
        unhedged production;

    -   Important opportunities identified for incremental higher grade
        production relatively early in the mine life from underground mineral
        resources not within the current Phase IV pits or the current mineral
        reserve;

    -   A C$20 million allowance has been made in the cash flow model for
        post-closure abandonment and reclamation.

    Phase IV Pre-feasibility Study
    ------------------------------

The Phase IV Pre-feasibility Study was undertaken by SRK Consulting (Canada) Inc. who were engaged by Capstone’s wholly owned subsidiary, Minto Explorations Ltd. (“MintoEx”) to detail a new mineral resource and mineral reserve estimate for the Minto Mine property and to describe the new-life-of mine plan with costs and plant capacity improvements. Additional details are provided in a technical report that will be filed on SEDAR within approximately one week.

    Mineral Resources

Updated mineral resources were estimated for each of the Area 2/118, Ridgetop and Minto North deposits. The mineral resource estimates are summarized below and are broken out by deposit at the end of this release.

          Combined Mineral Resource Estimate at 0.5% Cu Cut-off for
          ---------------------------------------------------------
              Area 2/118, Ridgetop, and Minto North Deposits*
              -------------------------------------------------
                         (inclusive of reserves)*
                         --------------------------

    -------------------------------------------------------------------------
                                              Contained  Contained  Contained
                                                Copper      Gold      Silver
     Classifi-   Tonnes   Copper  Gold Silver   (000s      (000s      (000s
      cation   (000's)*   (%)  (g/t)  (g/t)    lbs)*   oz)*     oz)*
    -------------------------------------------------------------------------
    Measured
    (M)           10,348    1.37  0.55   4.57   311,887        183     1,519
    -------------------------------------------------------------------------
    Indicated
    (I)           13,920    0.94  0.30   3.39   287,179        136     1,519
    -------------------------------------------------------------------------
    Sub-total
    (M+I)**     24,267    1.12  0.41   3.89   599,066        319     3,038
    -------------------------------------------------------------------------
    Additional
    Inferred       5,827    0.91  0.25   2.93   116,520         46       548
    -------------------------------------------------------------------------
    *    This table excludes the remaining Minto Main Deposit mineral
           resource
    **   Totals may not add exactly due to rounding

The mineral resource estimate in the Area 2/118 and Ridgetop deposits was completed by Dr. Wayne Barnett, Ph.D., Pr.Sci.Nat., an independent qualified person as this term is defined in National Instrument 43-101. The effective date of this resource estimate is June 1, 2009. Marek Nowak, P.Eng., analyzed the data, reviewed and validated the mineral resource estimates. The Minto North mineral resource estimate was completed by Garth Kirkham, P.Geo., of Kirkham Geosystems, an independent qualified person as this term is defined in National Instrument 43-101; the effective date of this mineral resource estimate is December 1, 2009. See “Mineral Resource Estimation” and “QA/QC” sections below for additional information.

    Mineral Reserves

The Area 2/118, Ridgetop and Minto North (“Phase IV”) deposits are proposed to be developed as open pits following completion of mining in the Minto Main deposit. The planning for this pre-feasibility study assumes a start date of January 1, 2010. The proposed Main pit mine plan (as provided by MintoEx) was incorporated into this Phase IV PFS.

Based on a start date of January 2010, the Main/Phase IV mine will produce a total of 10.9 million tonnes (“Mt”) of ore (includes Main pit stockpile balance at end of 2009) and 70.4 Mt of waste and low grade material over approximately an eight-year mine operating life ending in early 2018. Permit amendments are required for production in 2012 and beyond. Mineral reserves by deposit are detailed below.

         Minto - Mineral Reserves Estimate by Deposit and Class for
         ----------------------------------------------------------
                   Main/Phase IV (including stockpiles)*
                   ---------------------------------------

    -------------------------------------------------------------------------
                                Cut-
                                off     Diluted grade      Contained Metal
                               Grade ----------------------------------------
                                (%                 Sil-   Copper
             Reserve  Tonnes  Copper Copper  Gold  ver  (millions Gold Silver
    Deposit   Class   ('000s) equiv)   (%)  (g/t) (g/t)     lb)   (oz)  (oz)
    -------------------------------------------------------------------------
    Minto   Proven     3,920   0.62   1.64   0.58  6.51    142     72    820
    Main    Probable     206   0.62   1.20   0.45  5.25      5      3     35
    pit     -----------------------------------------------------------------
            Sub-total  4,126   0.62   1.62   0.57  6.45    147     75    855
    -------------------------------------------------------------------------
    Minto   Proven     1,346   0.55   2.50   1.37  9.04     74     59    391
    North   Probable       3   0.55   2.91   1.07 13.11      0      0      1
    Pit     -----------------------------------------------------------------
            Sub-total  1,349   0.55   2.50   1.37  9.05     74     60    393
    -------------------------------------------------------------------------
    Ridge-  Proven       802   0.58   1.17   0.31  2.33     21      8     60
    top     Probable     522   0.58   1.39   0.50  4.90     16      8     82
    Pit     -----------------------------------------------------------------
            Sub-total  1,324   0.58   1.26   0.38  3.34     37     16    142
    -------------------------------------------------------------------------
    Area    Proven     3,707   0.56   1.56   0.59  5.36    127     71    639
    2/118   Probable     387   0.56   1.09   0.19  2.79      9      2     35
    Pit     -----------------------------------------------------------------
            Sub-total  4,094   0.56   1.51   0.56  5.12    137     73    674
    -------------------------------------------------------------------------
    Total   Proven     9,775   0.58   1.69   0.67  6.08    364    211  1,911
            Probable   1,118   0.58   1.25   0.38  4.26     31     14    153
            -----------------------------------------------------------------
            Total     10,893   0.58   1.64   0.64  5.89    395    224  2,064
    -------------------------------------------------------------------------
    * Totals may not add exactly due to rounding

The life-of-mine (“LOM”) plan focuses on the mining and milling high-grade ore first, with lower grade material stockpiled for blending and processing later in the mine life. This is a strategy MintoEx has successfully employed since production commenced, based on repeated exploration success that has supported successive deferrals in the timing of the processing of this lower grade material as additional higher grade mineralization is discovered, defined and advanced to reserve status.

    Open Pit Mining Production Schedule

The post-2009 mining sequence was divided into eight stages. The first stage sees the completion of mining in the Main pit followed by Minto North, the two stages in Ridgetop, Area 118 and finally three stages in Area 2. The stages were designed to provide the required ore per period, to maximize grade and defer stripping waste as long as possible.

    Life-Of-Mine Open Pit Production Schedule (excluding existing stockpiles)
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
                                               Year
                 ------------------------------------------------------------
                        2010  2011  2012  2013  2014  2015  2016  2017  2018
    Para-               -----------------------------------------------------
     meter Units Total   Main pit                 Phase IV Pits
    -------------------------------------------------------------------------
    Mining

    Ore      Mt   10.0   2.0   1.3   0.3   1.4   1.2   1.4   1.3   1.1     -
    Over-
     burden  Mt   16.9   4.9   3.4   2.3   1.2   1.6   1.0   1.9   0.7
    Waste
     Rock    Mt   53.5   3.3   3.0   7.1   6.0   8.6   7.9   9.7   8.0
    -------------------------------------------------------------------------
    Total
     Waste   Mt   70.4   8.2   6.3   9.4   7.2  10.2   8.9  11.6   8.6     -
    -------------------------------------------------------------------------
    Total
     Mat-
     erial   Mt   80.4  10.2   7.6   9.7   8.6  11.4  10.3  12.9   9.8     -
    -------------------------------------------------------------------------
    Strip   Waste:
     ratio  Ore t  7.0   4.1   5.0  33.2   5.1   8.6   6.3   8.7   7.6     -
    Daily
     produ-  000s
     ction  t/day 27.5  27.8  20.9  26.4  23.5  31.1  28.3  35.3  26.8     -
    Mined
     Copper
     grade    %   1.66  1.71  1.59  1.20  2.43  1.28  1.42  1.42  1.80     -
    Mined
     Gold
     grade   g/t  0.65  0.52  0.67  0.50  1.24  0.43  0.51  0.51  0.73     -
    Mined
     Silver
     grade   g/t  5.93  7.04  6.23  2.27  8.71  3.76  5.23  4.48  6.00     -
    -------------------------------------------------------------------------
            Mil-
    Mined  lions
     Copper  lbs   367    74    45     7    75    33    44    42    45     -
    Mined   000s
     Gold     oz   210    33    28     5    56    16    23    22    27     -
    Mined   000s
     Silver   oz 1,912   447   257    21   394   143   238   192   221     -
    -------------------------------------------------------------------------

    Processing

Based on recent operating experience at the Minto Mine, combined with metallurgical and comminution test work undertaken on each of the deposits forming the Phase IV pits, recoveries and processing characteristics were determined for each deposit, resulting in the mill processing profile tabulated below.

                    Life-Of-Mine Mill Processing Schedule
                    -------------------------------------

    -------------------------------------------------------------------------
                                               Year
                 ------------------------------------------------------------
                        2010  2011  2012  2013  2014  2015  2016  2017  2018
    Para-               -----------------------------------------------------
     meter Units Total   Main pit                 Phase IV Pits
    -------------------------------------------------------------------------
    Pro-
     cessing

    Process-
     ed Ore  Mt   10.9   1.2   1.4   1.4   1.4   1.4   1.4   1.4   1.4   0.1
    Process
     rate   tpd  3,704 3,334 3,750 3,750 3,750 3,750 3,750 3,750 3,750 3,750
    Process-
     ed Cu
     grade    %   1.64  2.33  1.68  1.10  2.47  1.22  1.44  1.40  1.64  0.81
    Process-
     ed Au
     grade  g/t   0.64  0.80  0.67  0.35  1.27  0.40  0.52  0.50  0.65  0.25
    Process-
     ed Ag
     grade  g/t   5.89  9.84  6.48  3.64  8.88  3.66  5.32  4.44  5.52  2.67
    -------------------------------------------------------------------------
    Recovery

    Copper    %   92.8  94.0  94.0  93.6  92.0  92.3  92.0  92.0  92.4  92.0
    Gold      %   73.8  80.0  80.0  77.9  70.0  71.3  70.0  70.2  71.8  70.0
    Silver    %   81.3  86.7  86.7  84.9  78.0  79.1  78.0  78.2  79.6  78.0
    -------------------------------------------------------------------------
    Metal in Concentrates

            Mil-
           lions
    Copper   lbs   366    59    48    31    69    34    40    39    46     1
            000s
    Gold      oz 164.8  25.0  23.5  12.2  39.2  12.5  16.0  15.6  20.4   0.5
            000s
    Silver    oz 1,685   334   247   136   305   127   183   153   193     6
    -------------------------------------------------------------------------

As noted in the Phase IV PFS, the mining schedule is not fully optimized and will be reworked to smooth out production, particularly in the 2012-2014 period. Nor does this production profile include any contribution from possible underground production, which could result in higher grade underground feed displacing lower grade open pit feed, which would be deferred into future years (see below).

    Production Opportunities

In order to assess the possible opportunity for larger scale open pits and their potential impact on future permitting requirements, a preliminary study was conducted where an optimistic copper price and lower operating costs were used to understand these potential pit limits. Although the large scale pits provide the potential for more tonnage through the mill (due to the lower operating costs and higher copper prices assumed), they do so at a reduced copper grades and also would require significant increases in waste dump capacities, as well as tailings storage requirements. It should be noted that this large open pit scenario is preliminary in nature and only serves as a rough indication of potential pit size.

Exploration on the Minto project has historically been focused on finding near-surface deposits conducive to open pit mining. In the course of exploration, several deeper deposits have been discovered that may provide an opportunity to add mill feed material using underground mining methods. Both deep penetrating geophysical surveys and core drilling have provided some preliminary definition of deposits below 150m in depth, and these deposits and targets may be amenable to underground exploitation. Additional details on the potential for underground production are provided below.

Both scenarios will undergo continued evaluation, with the underground potential being the preferred option due to the potential for the extraction and processing of relatively higher copper grades sooner, with lower capital than the large pit scenario.

    Capital Cost Estimate

Life-of-mine capital costs are estimated at C$48.2 million, of which $42.8 million is primarily related to the expansion of the process plant and conversion to self mining in 2010 and 2011; the balance is sustaining capital incurred over the remaining mine life.

                     Phase IV PFS Capital Cost Estimate
                     ----------------------------------

                   --------------------------------------
                   Area                       C$ millions
                   --------------------------------------
                   Plant expansion                 9.1
                   --------------------------------------
                   Open pit mining equipment      33.7
                   --------------------------------------
                   Sub-total                      42.8
                   --------------------------------------
                   Sustaining Capital              5.4
                   --------------------------------------
                   Life-of-mine capital           48.2
                   --------------------------------------

The method of funding the possible acquisition of open pit mining equipment, which could be by cash, capital lease or other method, will be evaluated once a decision to proceed with self-mining has been made. Alternatively, contract mining could continue, if contractors can achieve the objectives set out under ‘Operating Cost’ section below, eliminating the need for the open pit mining capital noted above. C$20 million has been allowed for post-closure abandonment in the cash flow model. This amount is just an allowance; actual costs will be estimated in conjunction with regulators during the permitting process.

    Operating Cost Estimate

The direct operating costs for the Phase IV PFS were estimated using historical operating data from the Minto Mine and various planned optimizations related to the Phase IV expansion.

                     Phase IV PFS Operating Cost Estimate
                     ------------------------------------

         ------------------------------------------------------------
         Area                                                   C$/t
         ------------------------------------------------------------
         Mining ($/t material mined)                            2.31
         ------------------------------------------------------------

         ------------------------------------------------------------
         Mining ($/t milled)                                   17.02
         ------------------------------------------------------------
         Processing ($/t milled)                               13.90
         ------------------------------------------------------------
         General, administration, camp, royalties ($/t milled) 11.94
         ------------------------------------------------------------
         Total ($/t milled)                                    42.86
         ------------------------------------------------------------

This equates to a life-of-mine average total cash cost, after selling costs and net of by-product credits, of US$1.34 per pound of copper. Actual annual average reported costs in Capstone’s financial statements could vary from this amount due to treatment of inventory and stockpiles on an annual basis.

    Economics

SRK reports that the estimated economic benefit of mining the Minto Phase IV deposits is sufficient to take the Phase IV expansion project to the next level. While more detailed work will be required to optimize the project, there is adequate economic justification for MintoEx to proceed with further work and, in particular, the application for licence and permit amendments from the Yukon Government.

The table below shows the comparison of Phase IV PFS Base Case (at a flat US$2.25/lb for unhedged copper production) and Alternate Cases (at a flat US$2.60 and US$3.00/lb for unhedged copper production, respectively). The Phase IV deposits add economic benefit to the mine, yielding a Base Case pre-tax Net Present Value at a 7.5% discount rate (“NPV7.5%”) of C$199 million. The Alternate Case models yield a substantial improvement in the project economics due to higher metal prices based on current forward projections.

               Comparison of Phase IV Base and Alternate Cases
               -----------------------------------------------

    -------------------------------------------------------------------------
                                                 Phase IV  Phase IV  Phase IV
                                                 PFS Base     PFS       PFS
                 Item                   Unit       Case     Case 2    Case 3
    -------------------------------------------------------------------------
    Waste mined (millions)             tonnes       70.4      70.4      70.4
    -------------------------------------------------------------------------
    Ore mined (millions)               tonnes       10.0      10.0      10.0
    -------------------------------------------------------------------------
    Total mined (millions)             tonnes       80.4      80.4      80.4
    -------------------------------------------------------------------------
    Strip ratio (waste: ore)             W:O         7.0       7.0       7.0
    -------------------------------------------------------------------------
    Mill Feed*                         Mt         10.9      10.9      10.9
    -------------------------------------------------------------------------
    Copper mill head grade              % Cu       1.64%     1.64%     1.64%
    -------------------------------------------------------------------------
    Gold mill head grade               g/t Au       0.64      0.64      0.64
    -------------------------------------------------------------------------
    Silver mill head grade             g/t Ag        5.9       5.9       5.9
    -------------------------------------------------------------------------
    Copper in concentrates
    (millions)                           lb          366       366       366
    -------------------------------------------------------------------------
    Gold in concentrates (000s)          oz          166       166       166
    -------------------------------------------------------------------------
    Silver in concentrates (000s)        oz        1,685     1,685     1,685
    -------------------------------------------------------------------------
    Concentrate Grade                   % Cu         40%       40%       40%
    -------------------------------------------------------------------------
    Copper Price Unhedged
    production, flat)                  US$/lb      $2.25     $2.60     $3.00
    -------------------------------------------------------------------------
    Copper Price (LOM average,
    including hedging)                 US$/lb    US$2.25   US$2.55   US$2.90
    -------------------------------------------------------------------------
    Gold price (net received from
    Silver Wheaton)                    US$/oz    $300.00   $300.00   $300.00
    -------------------------------------------------------------------------
    Silver price (net received
    from Silver Wheaton)               US$/oz      $3.90     $3.90     $3.90
    -------------------------------------------------------------------------
    Exchange rate                      US$/C$      $0.91     $0.91     $0.91
    -------------------------------------------------------------------------
    NSR                             C$/t milled      $75       $86       $99
    -------------------------------------------------------------------------
    Unit Mining Costs                C$/t mined    $2.31     $2.31     $2.31
    -------------------------------------------------------------------------
    Unit Total OPEX (incl.
    royalties)                      C$/t milled   $42.86    $42.92    $42.98
    -------------------------------------------------------------------------
    Unit On-site OPEX (inc.          US$/lb Cu
    royalties)                        payable      $1.20     $1.20     $1.20
    -------------------------------------------------------------------------
                                     US$/lb Cu
    Unit Off-site OPEX                payable      $0.29     $0.29     $0.29
    -------------------------------------------------------------------------
                                     US$/lb Cu
    Unit By-product Credit            payable      $0.15     $0.15     $0.15
    -------------------------------------------------------------------------
    Unit OPEX net by-product         US$/lb Cu
    credits                           payable      $1.34     $1.34     $1.34
    -------------------------------------------------------------------------
    Total Capital (initial,
    sustaining)                     C$ millions      $48       $48       $48
    -------------------------------------------------------------------------
    Allowance for closure costs     C$ millions      $20       $20       $20
    -------------------------------------------------------------------------
    NPV7.5% pre-tax                 C$ millions     $199      $291      $395
    -------------------------------------------------------------------------
    NPV7.5% after tax               C$ millions     $160      $218      $281
    -------------------------------------------------------------------------
    * Note: Mill Feed includes Ore Stockpile

Base case sensitivity analyses were run for copper grade, copper price, capital expense (“CAPEX”), and operating expense (“OPEX”). Each variable was changed from -20% to +20% of the base case value. Each variable was changed independently of the other variables so there is no compounding effect of multiple variable modifications. The results show the project is most sensitive to copper grade followed closely by copper prices. Normally grade and metal price effects are equal but in Minto’s case, the copper price is hedged for some of the production so the effect of copper price is tempered with some metal price certainty.

    For Case 1 Sensitivity of Project Economics, please click:

http://files.newswire.ca/842/CapstoneMiningCase1.doc

    Permitting & Reclamation

In order to implement the life-of-mine plan set out in the Phase IV PFS, amendments will be required to the current operating permits and licences at the Minto Mine for production in 2012 and beyond. With the Phase IV PFS as a guide, MintoEx has commenced the process of preparing an application for such amendments, which application it intends to file with the Yukon regulators in the first half of 2010.

In the financial model, C$20 million has been allowed for mine site reclamation following closure. However, it should be noted that this amount is an allowance; the actual reclamation cost will be estimated in conjunction with regulators during the permitting process.

    Risks & Opportunities

The major risk areas identified in this study are:

    1.  Timing and approval of permit revisions, which could delay access to
        new mining areas if not granted in time to allow stripping of Minto
        North in 2012;

    2.  Exchange rates, metal prices and external influences;

    3.  Grade control, given the relatively narrower mineralized horizons in
        the Phase IV pits as compared to the Minto Main pit.

The most important opportunities to improve the project are:

    1.  Optimization of mine plan to smooth out the production profile and
        optimize stripping;

    2.  Underground production potential, bringing currently defined ex-pit
        high grade feed to the mill relatively early in the mine life. A
        conceptual level review was completed that involves underground
        extraction of higher grade ore, eliminating the need for further
        plant expansions and allowing processing of higher grade ore sooner
        than in an expanded open pit scenario:

    3.  Conversion of current inferred mineral resources within existing
        Phase IV pit outlines to higher classifications, increasing the
        mineral reserve and reducing strip ratios:

    4.  Conversion of current higher grade inferred mineral resources outside
        the existing Phase IV pit outlines to higher classifications,
        possibly resulting in increased mineral reserves; and

    5.  Discovery of new mineral resources and mineral reserves.

    Underground Mining Opportunity

As part of the review of the mineral resources for the Phase IV PFS, options for extracting deeper portions of the resources that remain outside of the open pit limits were examined. One consideration was the potential for underground extraction of mineral resources, particularly in the Area 2/118 areas, and the potential of other deeper, but higher grade discoveries such as Minto East and Copper Keel.

    Potentially Underground Mineable Mineralization in Area 118 and Area 2
    ----------------------------------------------------------------------
            (Using Measured and Indicated Mineral Resources only)

    -------------------------------------------------------------------------
                                   Diluted Grade        Thickness
                                       (10%)            (Min. 3m)
                                 -------------------------------------
               Cut-off  In situ                       Max     Average     %
                Value    Tonnes    Cu    Au    Ag  Thickness Thickness   Ben-
    Deposit   ($/t NSR) (000s t)  (%)  (g/t) (g/t)    (m)       (m)     ching
    -------------------------------------------------------------------------
                  60     1,340    1.98  0.79   8.3    15.9       7.1      40
    Area 118      75       783    2.34  0.96  10.4    16.0       6.9      38
                  90       515    2.63  1.10  12.3    13.5       6.9      37
    -------------------------------------------------------------------------
                  60     1,814    1.83  0.75   6.0    33.0      11.2      64
    Area 2*     75     1,186    2.04  0.87   6.8    30.0       8.8      53
                  90       555    2.34  1.07   7.8    27.5       7.3      42
    -------------------------------------------------------------------------
    * Includes some mineralization currently in the Area 2 mine plan.

Based on geologic and geotechnical information, mining conditions in these areas appear to be good and may be able to support high extraction, relatively low cost, room and pillar mining. In order to access both the Area 2 and Area 118 mineralization, a 1,650m long, 5m by 5m decline at -15% has been considered, with additional development required to access mineralization and provide ventilation, with capital costs for such development estimated at C$11.3 million (which includes leased underground equipment, along with required infrastructure). Should the underground mining potential of the Area 2/118 (and possibly the Minto East) zones be shown to be favourable, it is estimated that an additional $8-10 million would be required to purchase mining equipment, additional infrastructure and mine development to build the potential mine production to a level of 1,000 to 2,000 tpd. Such production could be used to supplement open pit production, providing higher grade feed within 2-3 years, thereby increasing overall metal production, without further plant expansions, and extending the mine life by stretching out the open pit production. Should underground development occur, it could (a) provide supplemental higher grade feed relatively quickly and (b) provide further impetus for the exploration of other deeper, underground mining targets that have not been pursued to date.

If a $30/t average underground mining cost is assumed and a processing and G&A cost of $23.09/t is used (as in Phase IV PFS) then the estimated underground cut-off grade would be about 1.5% copper in situ. This equates to an approximate cut-off NSR value of $60.00/t. The underground option has not been factored into the Phase IV PFS and represents a significant upside opportunity that MintoEx intends to pursue in the near term.

    Large Pit Scenario

The work leading up to the Phase IV PFS also included the preliminary examination of the possibility of a further increase in mill capacity, to 7,500 tpd, concurrent with expanded mining capacity, resulting in a reduction in unit operating costs as efficiencies of scale come to bear. A reduction in unit operating costs could result in conversion of mineral resources currently outside the Phase IV pits into mineral reserves, particularly at higher metal prices, justifying the higher throughput. However, such a scenario involves more capital investment up front than the underground option discussed above, and reaches the highest grades toward the end of the mine life, and would thus appear to result in a less attractive investment scenario than the underground option, except at high metal prices over the entire mine life. MintoEx therefore intends to focus on evaluating the underground option for its Phase V of the Minto Mine.

    Mineral Resource Estimation

In the opinion of SRK, the block model mineral resource estimate and mineral resource classification reported herein are a reasonable representation of the global mineral resources at Area 2/118, Ridgetop, and Minto North deposits at the current level of sampling. 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. The estimated mineral resources have been used in the preliminary feasibility study described in this news release.

The database used to estimate the Area 2/118 and Ridgetop deposits was audited by SRK and the mineralization boundaries were modelled by SRK based on lithological and structural interpretations. Kirkham Geosystems audited the Minto North database and modelled mineralization boundaries. SRK and Kirkham Geosystems are of the opinion that the current drilling information is sufficiently reliable to interpret with confidence the boundaries of the mineralized domains and that the assaying data is sufficiently reliable to support estimating mineral resources in respect of the mineral resource estimates they are responsible for.

The “reasonable prospects for economic extraction” requirement for a mineral resource generally implies that the quantity and grade estimates meet certain economic thresholds, and that the mineral resources are reported at an appropriate cut-off grade taking into account extraction scenarios and processing recoveries. In order to meet this requirement, SRK and Kirkham Geosystems consider that the Area 2/118, Ridgetop, and Minto North deposits are amenable for open pit extraction.

In order to constrain the overall mineral resource envelope to demonstrate reasonable prospects for economic extraction, for the Area 2/118 and Ridgetop deposits, the mineral resources are based on a combined processing and G&A cost of C$5.00 per tonne of material processed (assuming a much larger operation) and metal prices of US$2.85 per pound for copper, US$900 per ounce gold, and US$12 per ounce silver. This upside pit shell puts outside limits on the overall resource shell. Mineral resources at these lower cut-offs were reported in a news release dated June 9, 2009.

The open pit resource is constrained by an optimized Whittle shell based on the NSR model, overall slope angles of 50 degrees and the site operating costs noted above. At Minto North, global resources have been reported.

    Technical Report
    ----------------

A technical report summarizing the information in the Phase IV PFS will be filed on SEDAR within approximately one week.

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

    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 and reviewed by Stephen P. Quin, P. Geo., President & COO for Capstone Mining Corporation. The exploration activities at the Minto project site are carried out under the supervision of Brad Mercer, P. Geol., V.P. Exploration (Canada) for Capstone.

The following SRK employees are the Qualified Persons (“QP”) under National Instrument 43-101 responsible for this project: Wayne Barnett, P.Eng. – Geology as well as resource estimates for Area 2/118 and Ridgetop; Cam Scott, P.Eng. – Waste dumps and Tailings Impoundments; Mike Levy, P.E. – Geotechnical; Dino Pilotto, P.Eng. – Mining and Reserves; Gordon Doerksen, P.E. – Project Overview. Clint Donkin of Ausenco is the QP for the Mineral Processing and Garth Kirkham of Kirkham Geosystems is the QP for the resource estimate for Minto North.

The analytical method for the copper and silver analyses is aqua regia digestion of the samples followed by atomic absorption spectroscopy. Gold is analysed by fire assay fusion with atomic absorption spectroscopy finish for gold. Analyses are carried out by ALS CHEMEX in North Vancouver. When visible gold is noted in drill core samples or regular fire assay values appear abnormally high, the pulp and screen metallic assay method is used to determine the total gold content and gold contents of different size fractions. This is considered industry best practice when dealing with coarse gold mineralization where a nugget effect is suspected. This determination is accepted as the most representative value and is used in the assay database for mineral resource calculations. Blank and standard samples are used for quality assurance and quality control. Where more than two check samples assay outside expected ranges, the entire batch is re-assayed. After the completion of planned drill programs at Minto, random check assays will be carried out by Inspectorate America Corporation.

    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 and Capstone Mining Corp. (the “Company”) does not intend, and does not assume any obligation, to update these forward-looking statements.

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”, “perhaps”, “would”, “might” or “will be taken”, “occur” or “be achieved” or the negative of these terms or comparable terminology. In this news release, forward-looking statements can be identified by the use of words (or variations of words) such as “resulting”, “further” “planning”, “planned”, “could”, “will”, “proposed”, “would”, “scenario”, “may”, “intends”, “opportunities”, “potential”, and relate to the Company’s expectations with respect to the expansion of the Minto Mine based on the Phase IV PFS. 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 can 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 on SEDAR at www.sedar.com. Specific risks identified in this news release are risks related to the timing and receipt of permit amendments required to implement the mine expansion; exchange rates, metal prices and external influences; and grade control in mining the Phase IV pits. 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.

             Mineral Resource Estimates for Individual Deposits
             --------------------------------------------------
                           (excluding Main Deposit)
                           ------------------------

       Mineral Resource Statement at 0.5% Cu Cut-off for the Area 2/118
                     Deposit, SRK Consulting June 9, 2009

    -------------------------------------------------------------------------
                                              Contained  Contained  Contained
                                                Copper      Gold      Silver
     Classifi-    Tonnes  Copper  Gold Silver   (000s      (000s      (000s
      cation      (Kt)*   (%)  (g/t)  (g/t)   lbs)*    oz)*     oz)*
    -------------------------------------------------------------------------
    Measured
    (M)            6,936    1.25  0.47    4.3   190,638        104       956
    -------------------------------------------------------------------------
    Indicated
    (I)           11,301    0.92  0.29    3.4   230,198        106     1,220
    -------------------------------------------------------------------------
    Sub-total
    (M+I)**     18,237    1.05  0.36    3.7   420,836        210     2,176
    -------------------------------------------------------------------------
    Inferred       5,116    0.91  0.24    3.0   102,420         40       492
    -------------------------------------------------------------------------
    *    Rounded to nearest thousand
    **   Totals may not add exactly due to rounding

            Mineral Resource Statement at 0.5% Cu Cut-off for the
                Ridgetop Deposit, SRK Consulting June 9, 2009

    -------------------------------------------------------------------------
                                              Contained  Contained  Contained
                                                Copper      Gold      Silver
     Classifi-   Tonnes   Copper  Gold Silver   (000s      (000s      (000s
      cation   (000's)*   (%)  (g/t)  (g/t)   lbs)*    oz)*     oz)*
    -------------------------------------------------------------------------
    Measured
    (M)            1,568    0.98  0.26    2.1    33,719         13       107
    -------------------------------------------------------------------------
    Indicated
    (I)            2,355    0.98  0.33    3.3    50,926         25       250
    -------------------------------------------------------------------------
    Sub-total
    (M+I)**      3,923    0.98  0.30    2.8    84,645         38       357
    -------------------------------------------------------------------------
    Inferred         686    0.90  0.26    2.4    13,644          6        53
    -------------------------------------------------------------------------
    *    Rounded to nearest thousand
    **   Totals may not add exactly due to rounding

      Mineral Resource Statement at 0.5% Cu Cut-off for the Minto North
                  Deposit, Kirkham Geosystems, Dec. 1, 2009

    -------------------------------------------------------------------------
                                              Contained  Contained  Contained
                                                Copper      Gold      Silver
     Classifi-   Tonnes   Copper  Gold Silver   (000s      (000s      (000s
      cation   (000's)*   (%)  (g/t)  (g/t)   lbs)*    oz)*     oz)*
    -------------------------------------------------------------------------
    Measured
    (M)            1,844    2.15  1.11    7.7    87,530         66       456
    Indicated
    (I)              264    1.04   0.6    5.8     6,055          5        49
    -------------------------------------------------------------------------
    Sub-total
    (M+I)**      2,108    2.01  1.04    7.5    93,585         71       505
    -------------------------------------------------------------------------
    Additional
    Inferred          25    0.84  0.40    4.4       457          0         3
    -------------------------------------------------------------------------
    *    Rounded to nearest thousand
    **   Totals may not add exactly due to rounding

SOURCE Capstone Mining Corp.


Source: newswire



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