23
Corporate Presentation June 2019
Corporate PresentationJune 2019
Cautionary Notes
CAPSTONE MINING (TSX:CS) • 2
Cautionary Note on Forward Looking Information This presentation, and the documents incorporated by reference herein, 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. (“Capstone” or 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 our expectations or beliefs regarding future events. Forward-looking statements include, but are not limited to, statements with respect to the estimation of mineral resources and mineral reserves, the realization of mineral reserve estimates, the timing and amount of estimated future production, costs of production and capital expenditures, the success of our mining operations, environmental risks, unanticipated reclamation expenses and title disputes. In certain cases, forward-looking statements can be identified by the use of words such as “plans”, “expects”, “guidance”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, “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. In this document certain forward-looking statements are identified by words such as “targeting”, “guidance”, “potential”, “extended”, “convert”, “will”, “plan” and “expected”. By their very nature, forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, amongst others, risks related to inherent hazards associated with mining operations and closure of mining projects, future prices of copper and other metals, compliance with financial covenants, surety bonding, our ability to raise capital, Capstone’s ability to acquire properties for growth, counterparty risks associated with sales of our metals, foreign currency exchange rate fluctuations, changes in general economic conditions, accuracy of mineral resource and mineral reserve estimates, operating in foreign jurisdictions with risk of changes to governmental regulation, compliance with governmental regulations, compliance with environmental laws and regulations, reliance on approvals, licences and permits from governmental authorities, impact of climatic conditions on our operations, aboriginal title claims and rights to consultation and accommodation, land reclamation and mine closure obligations, uncertainties and risks related to the potential development of the Santo Domingo Project, increased operating and capital costs, challenges to title to our mineral properties, maintaining ongoing social license to operate, dependence on key management personnel, potential conflicts of interest involving our directors and officers, corruption and bribery, limitations inherent in our insurance coverage, labour relations, increasing energy prices, competition in the mining industry, risks associated with joint venture partners, our ability to integrate new acquisitions into our operations, cybersecurity threats, legal proceedings, and other risks of the mining industry as well as those factors detailed from time to time in the Company’s interim and annual financial statements and MD&A 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 our actual results, performance or achievements to differ materially from those described in our forward-looking statements, there may be other factors that cause our results, performance or achievements not to be as anticipated, estimated or intended. There can be no assurance that our forward-looking statements will prove to be accurate, as our actual results, performance or achievements could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on our forward-looking statements.
Compliance with NI 43-101Unless otherwise indicated, Capstone has prepared the technical information in this presentation (“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” or “QP”) as defined in National Instrument 43-101 – Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators (“NI 43-101”). For readers to fully understand the information in this presentation, they should read the Technical Reports (available on www.sedar.com) in their entirety, including all qualifications, assumptions and exclusions that relate to the information set out in this presentation 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.
Alternative Performance Measures“C1 cash cost”, “cash cost”, “adjusted EBITDA”, “operating cash flow before changes in working capital” and “net debt” are Alternative Performance Measures. Alternative performance measures are furnished to provide additional information. These non-GAAP performance measures are included in this presentation because these statistics are key performance measures that management uses to monitor performance, to assess how the Company is performing, to plan and to assess the overall effectiveness and efficiency of mining operations. These performance measures do not have a standard meaning within IFRS and, therefore, amounts presented may not be comparable to similar data presented by other mining companies. These performance measures should not be considered in isolation as a substitute for measures of performance in accordance with IFRS. For full information, please refer to the Company’s latest Management Discussion and Analysis published on its Financial Reporting webpage or on SEDAR.
CurrencyAll amounts are in US$ unless otherwise specified.
FootnotesSee Slide Notes for all footnotes throughout the presentation
Capstone Mining
Pinto ValleyFlagship mine in Arizona, USA• Continuous optimization; focused
on lowering costs • Long Reserve life1
• Potential upside of untapped Resources1
CozaminRecession-proof mine in Mexico
• Low cost mine
• Mine life extended to 2024, with significant Resources to convert2
• Targeting 30% increase in production by end of 20202
CAPSTONE MINING (TSX:CS) • 3
Santo Domingo
Path forward in Chile
• Strong economics3 (after-tax): NPV $1.0 billion, IRR 22%, payback 2.8 years
• Launched strategic process to optimize ownership structure to align with financing capabilities
Low Risk Copper Producer • Focused on Execution • Delivering Value
34.637.4
41.042.3 41.4
$1.95 $1.84 $1.85
$1.70
$1.56
$0.00
$0.20
$0.40
$0.60
$0.80
$1.00
$1.20
$1.40
$1.60
$1.80
$2.00
0
10
20
30
40
50
Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019
C1 C
ash
Cost
1($
US)
Cu P
rodu
ctio
n (m
illio
n po
unds
)
Capstone Mining 2018-2019 Quarterly Production and C1 Cash Cost1
Pinto Valley Cozamin Total Consolidated Production C1 Cash Cost
Delivering Production Results
Continuing to drive costs lower after achieving operational stability
CAPSTONE MINING (TSX:CS) • 4
1
2019 Production and Capital Expenditure Guidance
Catalysts and Key Drivers1
Pinto Valley
• Scoping level study examining the potential economics of overall R&R base
• Quarterly copper grade profile will fluctuate, with annual average of 0.32%
Cozamin
• Eliminate production bottleneck, increasing throughput by 30% to approximately 3,800 tonnes per day by end of 2020 with an estimated investment of less than $5 million
• Brownfield exploration to assess up dip areas of northwest Mala Noche Footwall Zone where open
Santo Domingo
• Complete strategic process to evaluate alternatives relating to ownership of project
• Conduct preliminary economic assessment for producing cobalt as a by-product
• Continue to advance project to be construction ready by early 2020
Guidance for Continuing Operations1
Pinto Valley CozaminSanto
DomingoTotal
Production and Cost
Copper production (million lbs.)
115 – 125 30 – 35 - 145 - 160
C1 Cash Cost2 (US$) $2.10 - $2.25 $0.90 - $1.05 - $1.80 - $2.00
Capital Expenditure and Exploration (US$ millions)
Total Capital Expenditure 46.0 33.0 10.5. 89.5
Total Exploration - 6.0 - 12.0
CAPSTONE MINING (TSX:CS) • 5
CAPSTONE MINING (TSX:CS) • 6
Pinto Valley
Potential upside of untapped Resources
• PV3 mine plan doubled mine life to 2039• Total Reserve Estimate1 of 408 million tonnes grading at
0.31% copper
• Long-term organic growth potential• Measured and Indicated Resource Estimate1 (inclusive of
Reserves) of over 1.33 billion tonnes grading 0.30% copper
• 2019 catalyst• Scoping level study examining the potential economics of
overall Reserve and Resource base2
• Assessing scenarios for potential mill expansions from 25% to 75% or higher
Cozamin
• Increased copper resource provides an opportunity to utilize surplus mill capacity
• Investing less than $5 million to develop the underground haulage network into a one-way loop to debottleneck the mine, increasing throughput by 30% to ~3,800 tpd by late-20201; production expected to increase to between 40 to 45 million pounds of copper
• Capital budget of $6 million in 20192 for brownfield exploration to assess up dip areas of northwest Mala Noche Footwall Zone
CAPSTONE MINING (TSX:CS) • 7
MNFWZ
San RafaelZinc Zone
San Rafael Shaft
Zinc Potential Open
Cu-Zn Potential MNV
San Roberto Shaft
Looking North-Northeast
Zaragoza Shaft
0 1
km
1600
2000
2400
MA
SL
One-way rampOne-way ramp
Cities and TownsMines Operating Ports Projected Ports
El Salvador Mine
Caldera
Copiapo
Candelaria
Tierra Amarilla
Chañaral Diego de Almagro
CNN Mine
Manto VerdeSanto Domingo
Barquito Port
Atacama Port
Punta Caldera Port
Punto Padrones
CHILE
Pipeline
Santo Domingo Port
Punto Totoralillo
Santo Domingo Project
Strategic process to optimize ownership structure Permitted; ready for construction in early 2020 Additional NAV levers:
Cobalt and improved gold recovery potential upsides
Infrastructure sharing options being evaluated
Potential to utilize autonomous equipment
2018 Technical Report Key Highlights1
Mine Life 17.9 years
Throughput (tpd) 60,000 nominal average
Average Annual Production
First 5 Years LOM
Copper 259M lbs. 134M lbs.
Iron Concentrate 3.3M tonnes 4.2M tonnes
Gold 34,700 oz. 17,000 oz.
C1 Cash Cost2 per lb. Cu $0.47 $0.02
Economics3 (US$)
Project Capstone (70%)
Initial Construction Capital $1.51B $1.06B
NPV (after-tax, 8%) $1.03B $0.72B
IRR (after-tax) 21.8%
Payback period (after-tax) 2.8 years
CAPSTONE MINING (TSX:CS) • 8
High-quality project at the right time
Solid Balance Sheet
0.3 0.4 0.51.1
2.5 2.8
8.0
0.01.02.03.04.05.06.07.08.0
Trevali Hudbay Ero Copper Capstone Taseko CopperMountain
TurquoiseHill
US$
mill
ions
2019E Net Debt1/EBITDA1,5
$-
$0.02
$0.04
$0.06
$0.08
$0.10
$0.12
$-
$10
$20
$30
$40
$50
Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19
Adjusted EBITDA1 Trend4
Adjusted EBITDA (US$ millions) Adjusted EBITDA/Share (US$)
CAPSTONE MINING (TSX:CS) • 9
Capstone’s low net debt/EBITDA ratio combined with its balance sheet provides financial leverage
1.12:1Net debt1/EBITDA1
as at Mar 31/19
US$73 MillionCash and cash equivalents2
as at Mar 31/19
US$109 MillionTotal cash repayments to long-term
debt since Jan 1/173
US$139 MillionRolling 12-month adjusted EBITDA1 to Mar 31/19
Peer Value Comparison
0
0.2
0.4
0.6
0.8
1
1.2
1.4
TurquoiseHill
Capstone Taseko CopperMountain
Hudbay Lundin Trevali Ero Copper
P/NAV3
CAPSTONE MINING (TSX:CS) • 10
Capstone provides unparalleled copper exposure at an extremely low valuation
$-
$5
$10
$15
$20
$25
$30
$35
Capstone Atalaya Taseko Hudbay OzMinerals
CopperMountain
Lundin EroCopper
TurquoiseHill
ImperialMetals
EV/2019 Attributable Production Guidance ($/Cu lbs)1
0.0x
2.0x
4.0x
6.0x
8.0x
10.0x
12.0x
Capstone Hudbay Lundin Oz Minerals Taseko CopperMountain
Ero Copper TurquoiseHill
EV/EBITDA 2019E4
$1.00
$1.50
$2.00
$2.50
$3.00
020406080
100120140160180
Capstone Atalaya Taseko Imperial Metals CopperMountain*
Cash
Cos
t/lb
s. C
u Pr
oduc
ed (U
S$)
Mill
ion
lbs.
Att
ribu
tabl
e Pr
oduc
tion
Attributable Production and Cash Cost2
FY'18 Cu Production Q1'19 Cu Production FY'18 Cash Cost Q1'19 Cash Cost
*Copper Mountain FY’18 and Q1’19 Cash Cost both the same
Cumulative Net Operating Cash Flow vs. Market Capitalization
CAPSTONE MINING (TSX:CS) • 11
Since January 2017, Capstone has generated more cumulative net operating cash flow1
than its current market cap
1. Source: FactSet as of June 10, 2019, net operating cash flow is cash from operating activities less changes in non-cash working capital and interest paid.
Share Price (C$)
Cumulative net operating cash flow/share (C$)
$6.38
$2.42
$6.77
$4.60
$1.58
$0.19
$0.60
$0.78
$0.64
$0.96
$17.91
$1.76
$0.78
$0.56
$2.51
$0.56
$1,372
$292
$926
$115 $55 $238 $183
$81
$3,541
$2,396
$1,333 $1,147
$240 $181 $119 $111
$-
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
Lundin Turquoise Hill Hudbay Ero Copper Imperial Metals Capstone Taseko Copper Mountain
US$
Mill
ions
Total Cumulative Net Operating Cash Flow (Jan'17-Mar'19) Market Capitalization
Positioned for the Long-Term
Low Risk Copper Producer
●Focused on Execution
●Delivering Value
Existing Operations Continuing to Deliver
• Four consecutive quarters of improving results
• Q1 2019 C1 cash costs1 of $1.56/lb, down 20% year-over-year
• Identifying further optimizations and cost reductions
• Unparalleled low-risk exposure to rising copper prices
High Quality Growth Exists Within Current Portfolio
• Cozamin on-track for 30% production increase by end of 2020
• Pinto Valley scoping study to examine ultimate Resource potential
• Santo Domingo permitted project with value-maximizing process underway
CAPSTONE MINING (TSX:CS) • 12
Slide Notes
Capstone Mining1. Refer to the Company’s Annual Information Form for the year ended December 31, 2018 for full details. 2. Refer to the Company’s news release of January 24, 2019 and January 2019 NI43-101 Report for full details.3. Refer to the Company’s news release dated November 26, 2018 for full details.
Delivering Production Results1. This is an Alternative Performance Measure; refer to the Company’s Management’s Discussion and Analysis for
the year ended December 31, 2018 and for the three months ended March 31, 2019 for full details.
2019 Production and Capital Expenditure Guidance1. Refer to the Company’s news release dated January 10, 2019 for full details. 2. This is an Alternative Performance Measure; refer to the Company’s news release dated January 10, 2019 for full
details.
Pinto Valley1. Refer to the Company’s Annual Information Form for the year ended December 31, 2018 for full details. 2. Refer to the Company’s news release dated January 10, 2019 for full details.
Cozamin1. Refer to the Company’s news release of December 10, 2018 and January 2019 NI43-101 Report for full details.2. Refer to the Company’s news release dated January 10, 2019 for full details.
Santo Domingo Project1. Refer to the Company’s news release of November 26, 2018 for full details. 2. C1 cash costs are net of magnetite iron and gold by-product credits and selling costs and is an alternative
performance measure. Refer to "Alternative Performance Measures" in the Company’s news release of November 26, 2018 for full details.
3. Metal price assumptions Cu: $3.00/lb, Fe: $80/t concentrate @ 66% Fe FOB SD, Au: $1,290/oz. Refer to the Company’s news release of November 26, 2018 for full details.
Solid Balance Sheet1. This is an Alternative Performance Measure; refer to the Company’s Management’s Discussion and Analysis for
the three months ended March 31, 2019 for full details.2. Total includes cash and cash equivalent, short-term investments and cash balance within assets classified for sale
and discontinued operations. See the Company’s Management’s Discussion and Analysis for the three months ended March 31, 2019 for full details.
3. Total cash repayments towards long-term debt from January 1, 2017 to March 31, 2019. See the Company’s Management’s Discussion and Analysis for the year ended December 31, 2018 and the three months ended March 31, 2019 for full details.
4. Adjusted EBITDA for continuing operations; excludes Minto. See the Company’s Management’s Discussion and Analysis for the three months ended March 31, 2019 for full details.
5. Source: Scotiabank Metals & Mining Research Daily, Base Metals Comp Tables, April 22, 2019.
Peer Value Comparison1. Source: EV FactSet as of May 27, 2019; 2019 Attributable Production Guidance: company reports - 2019 guidance
taken at mid-point and shown on an attributable basis where applicable. 2. Source: company reports. Capstone and Imperial production is for continuing operations only. 3. Source: Scotiabank Metals & Mining Equity Research Spotlight, June 7, 2019, P/NAV 8%. 4. Source: FactSet as of May 27, 2019.
Cumulative Free Cash Flow vs. Market Cap1. Source: FactSet as of June 10, 2019, net operating cash flow is cash from operating activities less changes in non-
cash working capital and interest paid.
Positioned for the Long-Term1. This is an Alternative Performance Measure; refer to the Company’s Management’s Discussion and Analysis for
the three months ended March 31, 2019 for full details.
CAPSTONE MINING (TSX:CS) • 13
CAPSTONE MINING (TSX:CS) • 14
APPENDIX
Capstone Mining at a Glance
• Pinto Valley is one of the US’s top 10 copper mines by production volume
• Annual copper production1: 140-160 million pounds
• By products: zinc, gold, silver and molybdenum
• FY’18 C1 cash cost per pound of copper produced2: $1.56
• Over 1.5 billion tonnes of Resource3
potential at operating mines
• Low net debt2/EBITDA2 ratio of 1.12:1
• Employs over 1,100 employees and 500 contractors globally3
PINTO VALLEY – US • Copper production1: 115-125 million lbs. • Remaining mine life4: 21 years• Resource3: over 1.35 billion tonnes
grading 0.30% copper
COZAMIN – MEXICO • Copper production1: 30-35 million lbs.,
targeting 40-45 million lbs. by H2 20205
• Reserve life5: 5+ years• Resource3: over 17 million tonnes grading
1.49% copper
SANTO DOMINGO - CHILE• Large scale copper-iron ore-gold project
with additional cobalt and gold by-product upside
• Permitted in mining-friendly jurisdiction with local community support
• 18 year mine life• Reserve3: over 537 million tonnes grading
0.52% copper equivalentCAPSTONE MINING (TSX:CS) • 15
An Americas-focused base metals mining company, with two 100%-owned producing copper mines in the US and Mexico
FOOTNOTES:1. 2019 Guidance, see January 10, 2019 news release for full details. 2. This is an Alternative Performance Measure; as of Q1 -2019, see April 24, 2019 news release for full details. 3. Refer to the Company’s Annual Information Form for the year ended December 31, 2018 for full details. 4. See news release of January 18, 2016 for full details. 5. See Technical Report, January 2019 for full details. 6. As of December 31, 2019.
PINTO VALLEY MINE(100%) Arizona, US
CORPORATE OFFICEBC, Canada
COZAMIN MINE(100%) Zacatecas, Mexico
SANTO DOMINGO PROJECT (70%) Region III, Chile
Company Snapshot
CAPSTONE MINING (TSX:CS) • 16
Rank Institution Name % of S/O
1 Grm Investments, LTD 19.8%
2 Government of South Korea 10.1%
3 Third Avenue Management, LLC 4.7%
4 Dimensional Fund Advisors, L.P. (U.S.) 2.0%
5 Columbia Threadneedle Investments (U.S.) 1.9%
6 Fidelity (Canada) Asset Management ULC 1.2%
7 QS Investors, LLC 0.3%
8 Lingohr & Partner Asset Management GmbH 0.3%
9 Acadian Asset Management, LLC 0.2%
10 Earth Resource Investment Group AG 0.2%
*Source: IPREO as of June 10, 2019
Stock Information and Share Price Performance Shareholder Distribution*
Top Disclosed Shareholders*
Institutional42%Retail and
Other58%
Shareholder CompositeTicker TSX:CS
Shares Outstanding (as at Mar 31/19) 399.6 million
Market Cap (as at Jun 10/19) U$181 million
Cash and Cash Equivalent (as at Mar 31/19) U$73.0 million
Long Term Debt (as at Mar 31/19) U$219.9 million
Asia24%
Canada51%
Europe and ROW
3%
USA22%
Institutional Breakdown
16-7 16-10 17-1 17-4 17-7 17-10 18-1 18-4 18-7 18-10 19-1 19-4$.40
$.60
$.80
$1.00
$1.20
$1.40
$1.60
$1.80
$2.00
Shar
ePr
ice
($C
)
0
2
4
6
8
10
12
14
Volu
me
(milli
ons)
Source: FactSet, June 10, 2019
Volume Price
Management
Darren PylotPresident & CEO
Jason HoweVice President, Corporate Development
Raman Randhawa Chief Financial Officer
Paul JonesVice President, Business Development and Investor Relations
Brad MercerSenior Vice President, Operations & Exploration
Wendy KingVice President, Legal, Risk and Governance
Albert Garcia IIIVice President, Projects
Mike WickershamMine Manager, Pinto Valley
Abel Gonzalez VargasMine Manager, Cozamin
Board Of Directors
George BrackChairman of the BoardFormer Managing Director & Industry Head, Mining at Scotia Capital
Dale PeniukFormer Assurance Partner, Mining, KMPG LLP
Robert GallagherFormer President & CEO of New Gold
Darren PylotPresident & CEO of Capstone Mining Corp.
Peter MeredithFormer Deputy Chairman and CFO of Turquoise Hill Resources
Richard ZimmerChair, Technical, Health, Environmental, Safety and Sustainability CommitteeFormer President & CEO of Far West Mining Ltd.
Yong Jun ParkDirector and Secretary of KORES Canada Corporation
The Team Right Structure to Take Capstone to the Next Level
Visit https://capstonemining.com/company for full bios CAPSTONE MINING (TSX:CS) • 17
32.7 MlbsPinto Valley Cu production
$1.79Pinto Valley C1 cash cost1
per pound payable produced
$108.9 MRevenue from
continuing operations2
8.7 MlbsCozamin Cu production
$0.70Cozamin C1 cash cost1
per pound payable produced
$41.8 MAdjusted EBITDA1
from continuing operations
41.4 MlbsTotal copper production
from continuing operations
$1.56Consolidated C1 cash cost1
per pound payable produced
$30.7 MOperating cash flow
before changes in working capital1,2
Q1 2019 Results*
Continuing to demonstrate quarter-on-quarter performance improvement
*Refer to the Company’s Financial Statements and Management’s Discussion and Analysis for the three months ended March 31, 2019 for full details. 1. This is an Alternative Performance Measure; refer to the Company’s Management’s Discussion and Analysis for the three months ended March 31, 2019 for full details.2. In accordance with IFRS 5, Minto’s results are excluded from revenue but included within cash flow amounts. CAPSTONE MINING (TSX:CS) • 18
Copper Fundamentals
CAPSTONE MINING (TSX:CS) • 23
Long-term, copper is headed for structural deficit; demand growth driven by macro concerns, global development and electric vehicle demand growth
NBF Estimates Potential for Large Deficits1
Source: NBF estimates, Wood Makenzie
“In short, copper and base metals are trading on fears rather than fundamentals.”
- The Quantitative Strategist – Outlook 2019 Report, January 11, 2019 by Canaccord Genuity Capital Markets
Building Construction
Equipment
Infrastructure
Transportation
Total Cu Demand by End Use Sector2
Source: Bloomberg consensus as at January 2, 2019
AsiaAmericas
Europe
ROW
Total Cu Demand by Region2
Source: Bloomberg consensus as at January 2, 2019
1.Source: Shane Nagle, CFA, Director – Mining Research, National Bank Financial, April 5, 2019; NBF source: NBF estimates and Wood Mackenzie. 2.Source: Bloomberg as of January 9, 2019
Pinto Valley Mineral Reserve and Resource Estimate
Mineral Resource Estimate as at December 31, 2018
(metric units)Mineral Resources at 0.17% TCu Cutoff
(Inclusive of Mineral Reserves)Contained Metal
Category Tonnes
(million)Cu(%)
Mo(%)
Copper Metal(Mt)
Molybdenum(Mt)
Measured (M) 571 0.33 0.006 1.88 0.034
Indicated (I) 759 0.27 0.005 2.07 0.039
Total M + I 1,330 0.30 0.005 3.95 0.0073
Inferred 146 0.24 0.005 0.34 0.008RESOURCE ESTIMATE NOTES: Claydon Craig, P.Eng., Superintendent of Mine Technical Services at Pinto Valley, is the Qualified Person responsible for the Pinto Valley Mineral Resources estimate. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. Mineral Resources are presented inclusive of Mineral Reserves. Mineral Resources are reported as at December 31, 2018 above a 0.17% TCu cut-off grade. The economic assumptions for the reasonable prospects pit include: $3.30/lb Cu, $10.00/lb Mo, 88% Cu recovery, 50% Mo recovery, $1.50/ton mining costs, $1.50/ton G&A costs, $5.00/ton milling costs, and a pit slope of 45°. Totals may not tally due to rounding. Contained metals are reported at 100%. See Capstone’s Annual Information Form for the year ended December 31, 2018 for further information.
CAPSTONE MINING (TSX:CS) • 24
Mineral Reserve Estimate as at December 31, 2018Mineral Reserve Contained Metal
CategoryTonnes
(million)Cu(%)
Mo(%)
Copper Metal(Mt)
Molybdenum (Mt)
Proven 255 0.33 0.006 0.84 0.016
Probable 153 0.28 0.006 0.43 0.009
Proven + Probable 408 0.31 0.006 1.27 0.025RESERVE ESTIMATE NOTES: Claydon Craig, P.Eng., Superintendent of Mine Technical Services at Pinto Valley is the Qualified Person responsible for the Pinto Valley Mineral Reserves estimate. Economic inputs to the block model were USD$2.75/lb Cu and USD$12.50/lb Mo. Mineral Reserves are reported above 0.175% Cu cut-off grade. Summation errors due to rounding. Contained metals are reported at 100%. See Capstone’s Annual Information Form for the year ended December 31, 2018 for further information.
Cozamin Mineral Reserve and Resource Estimate
Mineral Resource Estimate as at December 31, 2018Mineral Resources (Inclusive of Mineral Reserves) Contained Metal
Category Tonnes
(kt)Copper
(%)Silver (g/t)
Zn(%)
Pb(%)
Copper Metal(kt)
Silver Metal(koz)
Zinc Metal(kt)
Lead Metal(kt)
Measured (M) 407 1.24 53 1.23 0.40 5 698 5 2
Indicated (I) 16,709 1.50 44 1.25 0.27 250 23,813 208 46
Total M + I 17,116 1.49 45 1.25 0.28 255 24,506 213 47
Inferred 16,922 1.11 44 1.64 0.29 188 23,902 278 49RESOURCE ESTIMATE NOTES: The Cozamin Mineral Resource estimate was completed by Garth Kirkham, P.Geo., FGC, Kirkham Geosystems Ltd., and an independent Qualified Person as defined by NI 43-101. The NSR formula used is based on $3.50/lbCu, $18/oz Ag, $1.20/lb Zn, $1.00/lb Pb and metallurgical recoveries of 95% Cu, 78% Ag, 58% Zn, 40% Pb. The resulting NSR formula is Cu*65.024 + Ag*0.438 + Zn*10.755 + Pb*6.981. Mineral Resources are reported above $50/t NSR cut-off. Mineral Resources are presented inclusive of Mineral Reserves. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. Figures may not sum due to rounding. Contained metals are reported at 100%. See Capstone’s Annual Information Form for the year ended December 31, 2018 for further information.
CAPSTONE MINING (TSX:CS) • 25
Mineral Reserve Estimate as at December 31, 2018Mineral Reserve Contained Metal
CategoryTonnes
(kt)Cu(%)
Ag(g/t)
Zn(%)
Pb(%)
Copper Metal(kt)
Silver MetalTroy (koz)
Zinc Metal(kt)
Lead Metal(kt)
Proven - - - - - - - - -
Probable 6,050 1.58 43 0.72 0.14 96 8,293 43 8
Proven + Probable 6,050 1.58 43 0.72 0.14 96 8,293 43 8RESERVE ESTIMATE NOTES: Tucker Jensen, P.Eng., Senior Mining Engineer at Capstone Mining Corp., is the Qualified Person for the Cozamin Mineral Reserve. Disclosure of the Cozamin Mine Mineral Reserves as of December 31, 2017 was completed using fully diluted mineable stope shapes generated by the Maptek Vulcan Mine Stope Optimizer software and estimated using the 2018 MNFW and MNV resource block models completed by Garth Kirkham, P.Geo., FGC, Kirkham Geosystems Ltd. The Reserves are based on a $50/t NSR cut-off. The NSR formula used for the Reserves was based $2.75/lb Cu, $16/lb Ag, $1.10/lb Zn, and metallurgical recoveries of 96.5% Cu, 81% Ag, 44% Zn. The resulting NSR275 formula is ($50.707*%Cu + 0.366*Ag ppm + 7.276*Zn%)*(1-NSRRoyalty%)Note that zero value is attributed to Pb due to low concentrations. Tonnage and grade estimates include dilution and recovery allowances. The NSR royalty rate applied varies between 1% and 3% depending on the mining concession. Contained metals are reported as 100%. Figures may not sum due to rounding. See Capstone’s Annual Information Form for the year ended December 31, 2018 for further information.
Santo Domingo Mineral Reserve and Resource Estimate
Mineral Resource Estimate as at December 31, 2018Mineral Resources (Inclusive of Mineral Reserves)
Category Tonnes
(Mt)CuEq(%)
Cu(%)
Au(g/t)
Fe(%)
Co(ppm)
Measured (M) 66 0.81 0.61 0.081 30.9 254
Indicated (I) 471 0.48 0.26 0.034 25.0 225
Total M + I 537 0.52 0.30 0.039 25.7 229
Inferred 48 0.41 0.19 0.025 23.6 197RESOURCE ESTIMATE NOTES: Mineral Resources are reported inclusive of Mineral Reserves. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. Mineral Resources are classified according to CIM (2014) guidelines. The Qualified Person for the estimates is Mr. David Rennie, P.Eng., an associate of Roscoe Postle Associates Inc. Mineral Resources for the Santo Domingo Sur, Iris, Iris Norte and Estrellita deposits have an effective date October 31, 2018. Mineral Resources for the Santo Domingo Sur, Iris, Iris Norte, and Estrellita deposits are reported using a cut-off grade of 0.125% CuEq. CuEq grades are calculated using average long-term prices of $3.50/lb Cu, $1,300/oz Au, and $99/dmt Fe. The CuEq equation is: % Cu Equivalent = (Cu Metal Value + Au Metal Value + Fe Metal Value) / (Cu Metal Value per percent Cu). The general equation for metal value is: Metal Value = Grade * Cm * R * (Price – TCRC – Freight) * (100 – Royalty) / 100, were Cm is a constant to convert the grade of metal to metal price units, R is metallurgical recovery, and TCRC is smelter treatment charges and penalties. An assessment of Mineral Resources for the Santo Domingo Sur, Iris, Iris Norte and Estrellitadeposits was performedusinga Lerchs–Grossman pit shell that has the following assumptions: pit slopes averaging 45°; mining cost of $1.90/t, processing cost of $7.27/t (including G&A cost); processing recovery of 89% copper and 79% gold; selling price of $3.50/lb copper, $1,300/oz gold and $99/dmt iron concentrate. Rounding as required by reporting guidelines may result in apparent summation differences between tonnes, grade and contained metal content. See Capstone’s Annual Information Form for the year ended December 31, 2018 for further information.
CAPSTONE MINING (TSX:CS) • 26
Mineral Reserve Estimate as at December 31, 2018Mineral Reserve Contained Metal
CategoryTonnes
(Mt)Cu(%)
Au(g/t)
Fe(%)
Copper Metal(Mlbs)
Gold MetalTroy (koz)
Iron Concentrate (Mt)
Proven 65.4 0.61 0.08 30.9 398 169.9 8.2
Probable 326.9 0.24 0.03 27.6 768 336.8 66.9
Proven + Probable 392.3 0.30 0.04 28.2 1167 506.7 75.1RESERVE ESTIMATE NOTES: The Mineral Reserves estimate have an effective date of November 14, 2018 and were prepared by Mr. Carlos Guzman, CMC, and employee of NCL. Mineral Reserves are reported as constrained within Measured and Indicated pit designs and supported by a mine plan featuring variable throughput rates and cut-off optimization. The pit designs and mine plan were optimized using the following economic and technical parameters: metal prices of $3.00/lb Cu, $1,290/oz Au and $100/dmt of Fe concentrate; recovery to concentrate assumptions of a maximum of 93.4% for Cu and 60.1% for Au, with magnetite concentrate recovery varying on a block-by-block basis; copper concentrate treatment charges of $80/dmt, $0.08/lb of Cu refining charges, $5.0/oz of Au refining charges, $33/wmt and $20/wmt for shipping Cu and Fe concentrates respectively; wasteminingcostof $1.75/t, mining cost of $1.75/t ore, and process and G+A costs of $7.53/t processed; average pit slope angles that range from 37.6° to 43.6°; a 2% royalty rate assumption, and an assumption of 100% mining recovery. Rounding as required by reporting guidelines may result in apparent summation differences between tonnes, grade and contained metal content. See Capstone’s Annual Information Form for the year ended December 31, 2018 for further information.
