Capstone Mining Corp. TSX:CS
Suite 900 - 999 West Hastings Street
Vancouver, B.C. V6C 2W2
Tel: (604) 684-8894
Fax: (604) 688-2180

Capstone Second Quarter Production Results

Second Quarter Production of 21.2 million pounds of Copper in Concentrates

VANCOUVER, July 6, 2011 /CNW/ - Capstone Mining Corp. (TSX: CS) today announced its operating results for the three and six months ended June 30, 2011 from its two operating mines, Cozamin and Minto. Combined production totalled 21.2 and 37.9 million pounds of copper in concentrates in the second quarter and first six months, respectively, with additional by-products of lead, zinc, silver and gold.

"We are very pleased to report a 27% increase in production over the first quarter of this year," said Darren Pylot, President and CEO of Capstone.  "We achieved quarterly throughput records at both Cozamin and Minto, and a quarterly copper production record at Cozamin.  With both mines now running on plan, we are on target to meet our full year 2011 guidance of 80-85 million pounds of copper in concentrates," continued Mr. Pylot.

Q2 2011 Production

Operational Highlights for the three and six months ended June 30, 2011

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

• Production of 21.2 and 37.9 million pounds of copper contained in concentrates, respectively.
  
  
• By-product production of 4.5 and 8.7 million pounds of zinc, 1.0 and 1.7 million pounds of lead and 479,690 and 847,396 ounces of silver in concentrates, respectively.  Final gold production is not available since assaying is done off site, but is estimated at 6,842 and 9,437 ounces for the respective periods.
  
  
• At Cozamin, remediation activities in the mine were completed in March, allowing production from the Avoca and 11E stopes to proceed at planned levels.  This contributed to higher mined and processed tonnages for the second quarter relative to the first quarter.
  
  
• At Minto, production exceeded expectations due to the successful implementation of pre-crushing for the SAG mill feed.
  • The implementation of contract pre-crushing starting in mid-April allowed mill throughput to exceed expectations.  May mill throughput set a monthly record of 115,913 tonnes, or 3,739 tonnes/day, and June throughput has continued above plan.
    
    
  • Mill grades were higher than planned in the second quarter due to the delayed entry into the final stage of the Main Pit (Stage 5).  Mining of Stage 5, originally planned for the first quarter, was completed in late-April with ore production slightly exceeding expectations.  As a result, less lower grade stockpile material was processed in the second quarter.
    
    
  • Higher mill throughput and grade was partially offset by reduced mill recovery.  The reduced recovery is partly due to higher throughput and attendant reduced retention time in the floatation circuit.  However, issues with the efficiency of the scavenger flotation circuit have been identified and are being corrected, with measurable improvement seen by late-June.
• Minto received the amended Quartz Mining License in April and Area 2 pre-stripping and development of the underground portal is proceeding.

Q2 Operating Details

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

Outlook

Based on the significantly improved operating results in the second quarter, Capstone reaffirms full year 2011 guidance of 80-85 million pounds of copper in concentrates.  Cozamin production is expected to continue to stabilize at higher levels as additional stopes are placed into production to provide for increased flexibility in mine planning.  At Minto, contract pre-crushing will continue until permanent improvements are implemented later in the year.  It is expected that this will allow Minto to maintain the increased throughput for the remainder of the year rather than the gradual ramp-up in tonnage previously expected with the completion of the crushing circuit modifications planned for the fourth quarter.

Q2 Financial Results Timing

Capstone will report 2011 second quarter financial results on Monday, August 15, 2011 after market close, followed by a conference call for investors and analysts on Tuesday, August 16, 2011 at 11:30 am Eastern time (8:30 am Pacific time).

Conference Call and Webcast Details

Date: Tuesday, August 16, 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:     http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=3595240
Replay:  North America -- 1.800.642.1687, International -- 1.416.849.0833
Replay Passcode: 81625702

The conference call replay will be available until August 25, 2011. A transcript of the call will also be made available on Capstone's website (http://capstonemining.com/s/ConferenceCalls.asp) within 24 hours of the call.

About Capstone Mining Corp.

Capstone Mining Corp. is a TSX listed Canadian mining company with two producing copper mines in the Americas: the Cozamin copper-silver-zinc-lead mine located in Zacatecas State, Mexico and the Minto copper-gold-silver mine in Yukon, Canada.

Using its operations as a springboard, Capstone aims to grow organically and through acquisitions in politically stable, mining-friendly jurisdictions, with a focus in the Americas: organic growth through continued mineral resource and reserve expansions as well as expanding operations at its operating mines, development of its large 70% owned Santo Domingo copper-iron-gold project in Chile in partnership with Korea Resources Corporation, development of its Kutcho copper-zinc-gold-silver project in British Columbia and exploration at properties in Chile, British Columbia and Australia. Capstone's cash flow and strong balance sheet provide the platform to enhance that growth profile. 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, 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 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.