Vancouver, B.C. � Capstone Mining Corp. (�Capstone�) announces its financial results for the second quarter of 2008 including production and sales for the Cozamin mine located in Zacatecas State, Mexico.  All dollar amounts are stated in U.S. dollars unless otherwise indicated.

Overview and Highlights

• Record revenues of $35.3 million.  The average realized price for sales of copper, zinc, lead and silver in the quarter was $3.80/lb, $0.91/lb, $1.00/lb and $8.40/oz respectively.

• Record operating profit of $19 million or $0.23 per share.

• Record cash flows from operations of $17.8 million or $0.22 per share.

• Record earnings before income taxes of $16.7 million or $0.20 per share and record earnings after taxes were $12.2 million or $0.15 per share. 

• Copper production during the quarter was a record 6.7 million lbs compared with 6.0 million lbs for the three months ended March 31, 2008.

• At June 30, 2008, Capstone had cash of $48.7 million, working capital of $64.3 million and no bank debt.

• Copper cash costs for the quarter were $0.90/lb of copper (net of by-product credits and including smelter, refining, transportation and all site costs). 

• Total costs (the aggregate of cash costs, royalty, depletion and amortization and accretion) for the quarter were $1.29/lb.

 

	Q2 - 2008	Q1 - 2008
Revenue	$35.3M	$29.5M
Copper	$27.9M	$24.6M
Zinc	$2.6M	$0.6
Lead	$1.8M	$1.7M
Silver	$2.9M	$2.6M
Operating profit	$19M	$15.9M
Earnings (before taxes)	$16.7M	$3.3M
EPS (before taxes)	$0.20	$0.04
Earnings (after taxes)	$12.2M	$0.5M
EPS	$0.15	$0.01

Cozamin Mine

Q2 - 2008 Production and Sales Highlights

• Capstone produced the following metals during the quarter.
  • 6.7 million pounds of copper
  • 2.9 million pounds of zinc
  • 1.5 million pounds of lead
  • 330,000 ounces of silver

• Concentrate sales for the quarter contained;
  • 6.8 million pounds of copper
  • 2.9 million pounds of zinc
  • 2.0 million pounds of lead
  • 344,000 ounces of silver

Concentrate inventory at June 30, 2008 was 6,788 DMT (containing 1 million pounds of copper, 3 million pounds of zinc and 0.2 million pounds of lead).

June 30, 2008 Production Results and Forecast for 2008 and 2009

	2008 (F)	2009 (F)
Total tons milled	850,000	1,000,000
Copper (payable lbs)	30,000,000	40,000,000
Silver (payable ounces)	1,300,000	1,500,000
Zinc (payable lbs)	9,000,000	10,000,000
Lead (payable lbs)	5,100,000	5,000,000

The following table is a summary of the actual operating statistics for the three months ended June 30, 2008 and the three months ended May 31, 2007.

	Q2 - 2008	3 months ended May 31, 2007
Total tons mined	206,034	131,325
Tons of ore milled	202,898	112,277
Copper grade (%)	1.66	1.65
Zinc grade (%)	1.32	1.65
Silver grade (g/t)	63	71
Lead grade (%)	0.56	0.6
Copper recovery (%)	88.9	85.7
Zinc recovery (%)	49	43
Silver recovery (%)	77.3	68.1
Lead recovery (%)	59.7	48
Copper production (million DMT lbs)	6.7	3.5
Zinc production (million DMT lbs)	2.9	1.6
Silver production (�000 ounces)	330	174
Lead production (million DMT lbs)	1.5	0.6

Note: Silver reports to all concentrates.

Second Quarter 2008 Highlights

Copper

• Copper in concentrate produced during the quarter was 6.7 million pounds of copper, three months ended May 31, 2007 was 3.5 million.

• Copper concentrate sales for the quarter were 15,099 dry metric tons (�DMT�), containing 6.8 million pounds of copper, three months ended May 31, 2007 was 2.9 million.

• The average price for sales of copper in the period was $3.80/lb.

• Copper concentrate inventory at June 30, 2008 was 2,387 DMT, a decrease in inventory from the 2,919 DMT of concentrate on hand at March 31, 2008.

• Silver in the copper concentrate produced during the period totaled 251,000 ounces.    

                                                                         
Zinc

• Zinc in concentrate produced during the quarter was 2.9 million pounds of zinc, three months ended March 31, 2007 was 1.6 million.

• Zinc sales for the period were 4,673 DMT, containing 2.9 million pounds of zinc, three months ended May 31, 2007 was 1.5 million.

• The average price for sales of zinc in the period was $0.91/lb.

• Zinc concentrate inventory at June 30, 2008 was 4,283 DMT, a decrease in inventory from the 5,375 DMT of concentrate on hand at March 31, 2008.

• Silver in the zinc concentrate produced during the period totaled 15,000 ounces.

Lead

• Lead in concentrate produced during the quarter was 1.5 million pounds of lead, three months ended May 31, 2007 was 0.6 million.

• Lead concentrate sales for the period were 1,546 DMT, containing 2.0 million pounds of lead, three months ended May 31, 2007 was 0.7 million.

• The average price for sales of lead in the period was $1.00/lb.

• Lead concentrate inventory at June 30, 2008 was 118 DMT, a decrease in inventory from the 562 DMT of concentrate on hand at March 31, 2008.

• Silver in the lead concentrate produced during the period totaled 64,000 ounces.

 

Mill Expansion Project

Capital expenditures are budgeted at $12 million to further expand the facility to 3,000 tpd which is expected to be completed by the fourth quarter this year. $6 million has been spent to date.  The new powerline and substation will be completed in the first half of 2009 but will not affect meeting the expanded production rate.

Labour

There were 3 minor lost time accidents during the period from both operations and construction.  The number of personnel at the end of the period was 643, of which approximately 125 were contractors related to the expansion project and 33 were contractors related to the exploration drilling.

Q2 - Actual Sales and Costs

	Q2 � 2008	3 Months Ended May 31, 2007
Copper (million lbs)	6.8	2.9
Zinc (million lbs)	2.9	1.5
Lead (million lbs)	2.0	0.7
Silver (�000 ounces)	344	143
Copper production costs, net of by product credits, per lb of copper	$0.53	$0.20
Off property costs for transport, smelting and refining per lb of copper	$0.37	$0.41
Total cash costs of production per lb of copper	$0.90	$0.61

Financial Results

The information in this news release and the selected financial information contained in the following pages should be read in conjunction with the Interim Consolidated Financial Statements and Management Discussion and Analysis for the three months ended June 30, 2008, which will be available at Capstone�s website at www.capstonemining.com and at www.sedar.com.

The Company�s operating profit for the three months ended June 30, 2008 was $19 million or $0.23 per share compared to operating profit of $6.6 million or $0.08 per share for the three months ended May 31, 2007.  The Company�s net earnings for June 30, 2008 were $12.2 million or $0.15 per share compared to $5.1 million or $0.06 per share for May 31, 2007.

The Company reported revenues for the three month period of $35.3 million (May 31, 2007 - $14.7 million).  Revenues consisted of copper concentrate sales of $27.9 million, zinc concentrate sales of $2.6 million, lead concentrate sales of $1.8 million and silver concentrate sales of $2.9 million.   

Cost of sales for the three month period was $8.0 million (May 31, 2007 - $4.2 million), treatment and transportation charges were $5.6 million (May 31, 2007 - $2.4 million), royalty charges were $1.0 million (May 31, 2007 - $0.3 million) and depletion was $1.4 million (May 31, 2007 - $1.0 million).

For the three month period ended June 30, 2008, the Company recorded an unrealized loss related to mark-to-market on the outstanding derivative contracts in the amount of $1.0 million (May 31, 2007 - $Nil) related to our forward copper sales. Forward copper sales average price through 2012 is $3.14.

Glencore International AG and Trafigura Beheer B.V. purchases the concentrates produced by the Cozamin mine pursuant to the terms of a written contract.  

Capstone Mining Corp.
Selected Financial Information

Interim Consolidated Balance Sheets

	June 30,	Dec 31,
	2008	2007
Cash	$   48,722,180	$   25,114,753
Concentrate receivables	16,221,911	9,799,634
Inventory	5,421,540	5,428,842
Investment in Silverstone Resources Corp.	40,906,497	39,022,891
Property, plant and equipment	51,445,377	45,655,190
Other assets	13,024,936	19,958,886
Total assets	175,742,441	144,980,196
Deferred revenue	38,551,047	41,398,281
Other liabilities	36,296,797	17,833,194
Total liabilities	74,847,844	59,231,475
Shareholder�s equity	100,894,597	85,748,721
Total liabilities and shareholders� equity	175,742,441	144,980,196

Interim Consolidated Statements of Operations

	Three months ended June 30,	Three months ended May 31,
	2008	2007
Total revenues	$       35,254,233	$       14,727,403
Total cost of sales	(16,238,275)	(8,078,068)
Operating profit	19,015,958	6,649,335
G&A and other expenses	(1,662,205)	(2,713,503)
Other items	(690,763)	1,188,079
Earnings before income taxes	16,662,990	5,123,911
Current income tax	(3,455,884)	-
Future income tax	(1,024,744)	-
Earnings for the year	12,182,362	5,123,911
EPS � Basic	0.15	0.06
EPS � Diluted	0.14	0.06

Capstone will host a conference call on Wednesday, July 30 at 8:30 a.m. Pacific Time (11:30 AM Eastern Time) to discuss these results. The conference call may be accessed by dialing 1.866.365.1119 in North America or 1.416.849.7329 internationally, please ask for the Capstone Mining Corp. conference call. The conference call will be archived for later playback until August 13, 2008 and can be accessed by dialing 1.866.501.5559 and the passcode is 21279178#. 

ABOUT CAPSTONE

Capstone is a Canadian based mining company currently operating the 100% owned Cozamin copper-silver-lead-zinc mine located in Zacatecas State, Mexico. Capstone has approximately 82.4 million shares outstanding and is well financed with no bank debt. More information is available online at: www.capstonemining.com.

For further information about the Company, please contact:
Chris Tomanik or Mark Patchett, Telephone: (604) 684-8894 / Facsimile: (604) 688-2180
Email: ctomanik@capstonemining.com or mpatchett@capstonemining.com

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