Additional 67 Million Pounds of Copper in M&I Mineral Resource and New High Grade Copper-Gold Discovery

VANCOUVER, Feb. 2, 2012 /CNW/ - Capstone Mining Corp. ("Capstone") (TSX: CS) today announced the result of an updated National Instrument 43-101 compliant mineral resource estimate for the Wildfire/Copper Keel area at its Minto Mine in Yukon, Canada.  Follow-up drilling in the Copper Keel region of Minto South Deposit ("MSD") in the second half of 2011 has added an additional 67 million pounds of copper resource in the measured and indicated categories.  At a 0.5% copper cut-off grade, total mineral resources at the Minto Mine exceeds 1.1 billion pounds of copper.

In addition, the 2011 drill program produced a new discovery called Fireweed. A total of 26 holes were drilled on Fireweed "A" and "B". The best intercept to date is 3.2% Cu & 1.0g/t Au over 16.6 metres including 6.8% Cu and 1.9g/t Au over 7.1 metres in hole 11SWC-871 at Fireweed A and  3.4% Cu and 1.4g/t Au over 14.4 metres including 4.2% Cu & 1.3g/t Au over 7.6 metres in hole 11SWC-882 at Fireweed B.  Fireweed "A" is located approximately 200 metres east of the Minto East deposit and Fireweed "B" lies a further 170 metres east of Fireweed "A".  Fireweed drilling highlights are summarized in a table below and the full results are attached.

"Exploration success at Minto continues to translate into mineral resource additions to support our objective of organic growth at our existing mining operations," said Brad Mercer, Vice President, Exploration for Capstone.  "Since 2006, the Minto Mine has achieved steady mineral resource increases through a program of discovery followed by feasibility studies in a series of phases.  This updated mineral resource will be included in the next Pre-Feasibility Study, which is currently underway."

"The latest new Fireweed discovery, not yet included in any mineral resource estimate, was made by testing a geological target that became compelling after we completed a new 3D geology model of MSD," continued Mr. Mercer.  "Future exploration at Minto will focus on depth, exploring beyond the limits of our existing geophysical surveys as our understanding of Minto's geology evolves," he added.

Drilling operations have begun again in 2012 on a $4.8 million exploration drill program (23,500 metres).  Drilling will initially in-fill the relatively shallow gap between the MSD and the Ridgetop deposits. After that, the Company will follow-up its latest exploration success by refocusing on Fireweed and on the potential for further high grade mineralization at depth in the Minto system. As in previous years, the 2012 program will be conducted in two phases, winter and summer, separated by a pause in the spring for thaw and freshet.  It is anticipated that the Company will provide an update of exploration results part way through 2012 when drilling is paused between phases.

Minto South Deposit (MSD) - Updated Mineral Resource Estimate effective as at December 31, 2011

The Wildfire/Copper Keel area is a southeastwardly extension of the Minto South Deposit.  On May 30, 2011 the Company announced a mineral resource gain of 219 million pounds of copper from drilling conducted in 2010 and early 2011 in the Wildfire/Copper Keel area of MSD. Geological modelling incorporating these drill holes indicated geological continuity between the Wildfire/Copper Keel region and the Area 2/118 region and supported a geological reinterpretation indicating these areas are part of one larger deposit (MSD) and not separate deposits as initially thought.  Subsequently, drilling in mid to late 2011 in the same area now brings the total holes in the current estimate to 423 and added a further 67 million pounds of copper in the M&I Class for MSD. Data from these latest drill holes add further confidence in geological continuity of mineralization modelled in the previous MSD estimate and also expands the limits of mineralization northward on the Copper Keel levels of MSD from the May 30, 2011 model.

Below are tables summarizing the new total mineral resource estimate for MSD and the gain in mineral resources at MSD since the last estimate.

Total Mineral Resources by Class for the Minto South Deposit**, *** at a 0.5% copper cut-off grade ("Cu COG")

*Rounded to nearest thousand; totals may not sum exactly due to rounding.
** Includes material mined but not processed during pre-stripping activities in the Area 2 region of MSD and currently held in stockpile.

Mineral Resources Addition by Class in the Wildfire/Copper Keel Region of MSD since May 30, 2011 at a 0.5% Cu COG

*Rounded to nearest thousand; totals may not sum exactly due to rounding.

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. There is also no certainty that these inferred mineral resources will be converted to measured and indicated categories through further drilling, or into mineral reserves, once economic considerations are applied.

Total Mineral Resources at the Minto Mine as of December 31, 2011

The table immediately below summarizes the total mineral resource on the Minto property at a COG of 0.5% Cu. It includes the undeveloped Minto North, Minto East and Ridgetop deposits and the Minto South deposit where development (pre-stripping) is underway plus a small amount of resource remaining on the east flank of the Minto Main open pit that is relatively low grade and not considered in any current mine plan.

Total Mineral Resources by Class for all Minto Mine Deposits**, *** at a 0.5% Cu COG

*Rounded to nearest thousand; totals may not sum exactly due to rounding.
** Includes material mined but not processed during pre-stripping activities in the Area 2 region of MSD and currently held in stockpile.
***Includes any resources remaining in the Minto Main Deposit not considered in current mine plans but excludes material existing in stockpiles that originated from the Minto Main Deposit.

Appended to this release are tables summarizing both the MSD and the total Minto Mine mineral resources at various copper COGs. Please note that estimated grade and tonnage stated at copper COGs below 0.5% copper are for illustrative purposes to show the sensitivity of the mineral resource to decreasing copper COGs.

Also note that mineral resources at higher cut-off grades are also for illustrative purposes and do not necessarily imply a higher potential for economic extraction. Only those mineral reserves determined by previous feasibility studies to be mineral reserves are currently considered economically viable. The property-wide mineral resource numbers reported herein are inclusive of all previously defined mineral reserves that are currently supported by previous pre-feasibility work. Please refer to the Technical Report titled Minto Phase V Preliminary Feasibility Study Technical Report dated December 15, 2010 filed on SEDAR for any further discussion about mineral reserves at Minto. A new pre-feasibility study (Phase VI) is currently underway to apply economic considerations to the newly estimated mineral resources in the Wildfire/Copper Keel extension of the MSD.

Mineral Resource Estimate Methodology

The mineral resource estimate for the Wildfire/Copper Keel addition to the Minto South Deposit reported herein was prepared by SRK Consulting of Vancouver.  The estimate was completed in Gemcom Software GEMS^� using a three dimensional block model (10 metres by 10 metres by 3 metres (vertical) block size).  The mineralization was interpreted into nine distinct domains, modelled as wireframes and used as hard boundaries to constrain estimation.  Geostatistical analysis was completed on the 1.5 metre composite assay data for each of the metals, and variograms were defined for each domain of mineralization.  The grades for copper and gold were interpolated into the block model using ordinary kriging method, whereas the silver grades were interpolated using the inverse distance squared method only.  Interpolated results are reported in measured, indicated and inferred categories and are based on continuity of the mineralization and sample density.

Fireweed Exploration Discovery

A summary of selected drill intercepts from the 2011 Fireweed discovery are below, and a complete summary for all Fireweed drill intercepts is attached.

Highlights of Recent Drilling at Fireweed

(*) Estimated true thickness in parentheses.

Drill Hole Location Maps

For current drillhole locations please view the accompanying map:
http://capstonemining.com/i/maps/2011-13CSCurrentDrillHoleLocations.jpg

For a current view of drill results in the Fireweed area please view the accompanying map:
http://capstonemining.com/i/maps/2011-13MintoDrillResultsUpdate.jpg

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., Vice President, Exploration for Capstone a "Qualified Person" as defined in National Instrument 43-101 and the person who oversees exploration activities on the Minto Mine property.  In addition, Gregg Bush, Senior Vice President and Chief Operating Officer for Capstone, reviewed and approved this news release

The mineral resource estimate reported herein for the Minto South Deposit (including Area 2, Area 118, and Wildfire/Copper Keel zones) was estimated by Wayne Barnett, Pr.Sci.Nat. and Marek Nowak, P. Eng. of SRK Consulting. Dr. Barnett is the Independent Qualified Person under NI 43-101 responsible for the MSD mineral resource estimate and has reviewed the information in this release in respect of the MSD mineral resource estimate. The database used to estimate the Wildfire/Copper Keel deposit was audited by SRK. SRK is of the opinion that the current drilling information is sufficiently reliable to extend with confidence the boundaries of the mineralized domains from Area 2 into Wildfire/Copper Keel, and that the assaying data is sufficiently reliable to support estimating mineral resources. 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. In the opinion of SRK, the block model resource estimate and resource classification reported herein are a reasonable representation of the mineral resources at Wildfire/Copper Keel deposit at the current level of sampling.

With respect to the MSD mineral resource estimate and the Fireweed discovery, 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.  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, screen metallic assay method is used to determine the total gold content and gold content 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 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, random check assays will be carried out by Inspectorate-IPL of Vancouver.

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 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 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.

Minto South Deposit (MSD) ** -- Mineral Resources by Class at Select Copper Cut-offs

*Rounded to nearest thousand; totals may not sum exactly due to rounding.
** Includes mineral resources mined during pre-stripping of waste rock at Area 2 that is currently unprocessed and located in stockpile.

Total Minto Resources**, *** -- Mineral Resources by Class at Select Copper Cut-offs

* Rounded to nearest thousand; totals may not sum exactly due to rounding.
** Includes material mined during pre-stripping at Area 2 currently located in stockpiles.
***Includes any insitu resources remaining in the mined out Minto Main Deposit open pit mine that is not considered in any current mine plan but excludes material that still exists in stockpiles that originated from the Minto Main Deposit.

Details of Fireweed Prospect Drill Results

To accompany Capstone Mining News Release Dated February 1, 2012

(*) Estimated true thickness in parentheses.

Drill Collars - Coordinates are in UTM NAD83 Zone 8.