Capstone Mining Corp. TSX:CS
Suite 1980 - 1055 West Hastings St.
Vancouver, B.C. V6E 2E9
Tel: (604) 684-8894
Fax: (604) 688-2180

CAPSTONE MINING DECEMBER 31, 2007 FOUR MONTH STUB PERIOD RESULTS

February 28, 2008

Vancouver, B.C. - Capstone Mining Corp. ("Capstone") announces its financial results for the four month stub period ending December 31, 2007 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

For the four months ended December 31, 2007, Capstone's earnings, before future income tax allowance were $16.8 million or $0.21 per share ($0.20 per share diluted), and earnings, after future income tax allowance, a non-cash item, were $10.4 million or $0.13 per share ($0.12 per share diluted).

• Revenue for the four months ended December 31, 2007 was $33.0 million.  The average realized price for sales of copper, zinc, lead and silver in the four months was $3.09/lb, $1.07/lb, $1.24/lb and $8.40/oz respectively.

• Copper production during the four months ended December 31, 2007 was 9.0 million lbs compared with 13.9 million lbs for the 12 months ended August 31 2007 (65% of the previous 12 month period).

• At December 31, 2007, Capstone had working capital of $51.7 million including $25 million in cash, $8.1 million in marketable securities, current receivables of $14.9 and no bank debt, in addition the fair market value of Capstone's share ownership of Silverstone Resources Corp. as of today is approximately $90 million, which is not included in working capital.

• Copper cash costs for the four months ended December 31, 2007 were $0.96/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 four months ended December 31, 2007 were $1.16/lb.

• Capstone continued its share buyback plan and purchased an additional 815,500 common shares on the open market at an average price of CDN$2.76.  The shares have been returned to treasury and cancelled under its normal course issuer bid.

• During the four month stub period the Cozamin mine operated at its current designed throughput rate of 2,200 tpd.

Cozamin Mine

4 Months Ended December 31, 2007 Production and Sales Highlights

• Capstone produced the following metals during the year.
• 9.0 million pounds of copper
• 2.5 million pounds of zinc
• 1.6 million pounds of lead
• 414,000 ounces of silver

• Concentrate sales for the period were dry metric tonnes ("DMT"), containing;
• 8.6 million pounds of copper
• 1.4 million pounds of zinc
• 1.5 million pounds of lead
• 377,000 ounces of silver

Concentrate inventory at December 31, 2007 was 9,793 DMT (containing 2.8 million pounds of copper, 2.9 million pounds of zinc and 0.5 million pounds of lead).

December 31, 2007 Production Results and Forecast for 2008 and 2009

The following table is a summary of the actual operating statistics for the four months ended December 31, 2007 and the year ended August 31, 2007.

Note: Silver reports to all concentrates.

Stub Four Month Period Production Highlights

Copper

• Copper in concentrate produced during the four month period was 9.0 million pounds of copper, year ended August 31, 2007 was 13.9 million.

• Copper concentrate sales for the period were 18,277 dry metric tons ("DMT"), containing 8.6 million pounds of copper, year ended August 31, 2007 was 11.8 million.

• The average price for sales of copper in the period was $3.09/lb.

• Copper concentrate inventory at December 31, 2007 was 5,631 DMT, an increase in inventory from the 5,447 DMT of concentrate on hand at August 31, 2007.

• Silver in the copper concentrate produced during the period totaled 335,000 ounces.

Zinc

• Zinc in concentrate produced during the four month period was 2.5 million pounds of zinc, year ended August 31, 2007 was 6.8 million.

• Zinc sales for the period were 1,799 DMT, containing 1.4 million pounds of zinc, year ended August 31, 2007 was 5.0 million.

• The average price for sales of zinc in the period was $1.07/lb.

• Zinc concentrate inventory at December 31, 2007 was 3,804 DMT, an increase in inventory from the 2,413 DMT of concentrate on hand at August 31, 2007.

• Silver in the zinc concentrate produced during the period totaled 12,000 ounces.

Lead

• Lead in concentrate produced during the four month period was 1.6 million pounds of lead, year ended August 31, 2007 was 3.0 million.

• Lead concentrate sales for the period were 1,147 DMT, containing 1.5 million pounds of lead, year ended August 31, 2007 was 2.8 million.

• The average price for sales of lead in the period was $1.24/lb.

• Lead concentrate inventory at December 31, 2007 was 358 DMT, an increase in inventory from the 290 DMT of concentrate on hand at August 31, 2007.

• Silver in the lead concentrate produced during the period totaled 67,000 ounces.

Mill Expansion Project

Tons mined and processed were higher in the four months ended December 31, 2007 compared to previous 2007 periods as expansion to the 2,200 tpd was completed in September.  Capital expenditures are budgeted at $10 million to further expand the facility to 3,000 tpd which is expected to be completed by the fourth quarter this year.

Labour

There were 4 minor lost time accidents during the period from both operations and construction.  The number of personnel at the end of the period was 530, of which approximately 90 were contractors related to the expansion project.

Four Month Actual Sales

Actual sales and costs for the year are tabulated below.

Copper production costs in the four months ended December 31, 2007 were $0.21 above plan reflecting the impact of the company having sold less zinc and writing down a portion of the zinc with lower grade in the concentrate and the lower by product metal prices.

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 audited Consolidated Financial Statements and Management Discussion and Analysis for the four months ended December 31, 2007, which will be available at Capstone's website at www.capstonemining.com and at www.sedar.com.

The Company's earnings before future tax accruals for the four months ended December 31, 2007 were $16.8 million or $0.21 per share compared to earnings of $25.2 million or $0.31 per share for the year ended August 31, 2007.  The Company's net earnings for December 31, 2007 were $10.4 million or $0.13 per share compared to $22.7 million or $0.28 per share for August 31, 2007 after future income tax allowance, a non-cash item.

The Company reported revenues for the four month period of $33.0 million (year ended August 31, 2007 - $55.3 million).  Revenues consisted of copper concentrate sales of $26.5 million, zinc concentrate sales of $1.5 million, lead concentrate sales of $1.9 million and silver in concentrate sales of $3.1 million.   

Cost of sales for the four month period was $9.0 million (year ended August 31, 2007 - $14.2 million), treatment and transportation charges were $5.3 million (August 31, 2007 - $10.1 million), royalty charges were $0.6 million (August 31, 2007 - $1.4 million) and depletion was $0.9 million (August 31, 2007 - $1.7 million).

For the four month period ended December 31, 2007, the Company recorded an unrealized gain related to mark-to-market on the outstanding derivative contracts in the amount of $2,928,644 (August 31, 2007 - $Nil).

A future income tax provision of $6.3 million was recorded at December 31, 2007 compared to $2.5 million at August 31, 2007.  The increase in the income tax provision is mainly due to the reversal of the current future income tax asset set up at August 31, 2007 as well as an increase in the excess of book value of capital assets over tax values.

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

Consolidated Balance Sheets

Consolidated Statements of Operations

Capstone will host a conference call on Friday, February 29 at 8:00 a.m. Pacific Time (11:00 AM Eastern Time) to discuss these results. The conference call may be accessed by dialing 1.866.514.1894 in North America or 1.480.248.5085 internationally, please ask for the Capstone Mining Corp. conference call. The conference call will be archived for later playback until March 7, 2008 and can be accessed by dialing 1.866.501.5559 and the passcode is 21264082#. 

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 81.4 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