Capstone Reports Mineral Resource Estimate for Minto East and Resumption of Drilling

VANCOUVER, Canada, June 23, 2010 /PRNewswire-FirstCall/ — Highest Grade Deposit at Minto to Date – Exploration Continues in Support of an Underground Development

 

Capstone Mining Corp. (“Capstone”) (CS:TSX) today announced the results of National Instrument 43-101 compliant mineral resource estimate for the Minto East deposit discovered in 2009 at its high grade Minto copper-gold mine in Yukon, Canada. This is a preliminary mineral resource estimate for the Minto East deposit, which is still open to the east, and where exploration drilling has just resumed. Drilling at Minto East will comprise step-out holes to test the limits of the deposit and infill holes to increase the classification of the existing mineral resource. Exploration drilling will also continue to test other exploration targets, including those generated from the Titan 24 deep IP survey, which is about 60% complete.

 

“The discovery of high grade copper-gold mineralization at Minto East has opened up a whole new arena within our claims that is prospective for further deposits and we aim to continue our aggressive exploration agenda in order to sustain the tremendous rate of discovery, exceeding more than one new deposit per year at Minto for the past five years,” said Stephen Quin, President of Capstone Mining Corp. “Past exploration has focused largely within 150 metres from surface since the focus was primarily mineralization amenable to open pit mining,” he said. “That focus has now changed since scoping work on the feasibility of underground mining operations has identified opportunities to exploit deeper mineralized horizons, beneath the limits of current and planned open pits.” The discovery at Minto East, aided by a proof of concept Titan-24 deep earth imaging IP survey in 2009, has prompted Capstone to significantly enlarge the Titan-24 survey area in 2010 with the aim of identifying and drill testing any new anomalies in the same year. Recent new chargeability anomalies near Copper Keel – Airstrip and west of Area 118 suggest significant new drill targets.

 

Mineral Resource Estimates

 

Minto East – Preliminary Estimate

 

The results of the preliminary, NI43-101 mineral resource estimate for the Minto East deposit, a new high grade, copper-gold discovery made in late 2009, are very encouraging. Minto East is the highest grade deposit discovered within the Minto Mine property to date, and is one of the continuing focuses for the current exploration drill program. The mineral resource estimate is tabulated below using a 0.5% copper cut-off grade (COG ) to allow direct comparison purposes with other Minto deposits, and at a 1 .5% COG (similar to that used for underground mining in the Phase V scoping study discussed in a news release dated June 8, 2010). At the 1.5% COG, the mineral resource estimate for Minto East exceeds the amount of unclassified material used in the Phase V scoping study.

 

Minto – Mineral Resources by Class for the Minto East Deposit

 

(at a 0.5% copper cut-off)

 

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Classification Tonnes Copper Gold Silver (000’s)(x) (%) (g/t) (g/t)

 

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Measured (M) – – – –

 

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Indicated (I) 736 2.35 0.99 6.2

 

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Additional Inferred 588 1.73 0.81 5.6

 

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Classification Contained Cu Contained Gold Contained Silver (000’s lbs)(x) (000’s oz)(x) (000’s oz)(x)

 

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Measured (M) – – –

 

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Indicated (I) 38,132 23 147

 

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Additional Inferred 22,426 15 106

 

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Minto – Mineral Resources by Class for the Minto East Deposit

 

(at a 1.5% copper cut-off)

 

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Classification Tonnes Copper Gold Silver (000’s)(x) (%) (g/t) (g/t)

 

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Measured (M) – – – –

 

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Indicated (I) 541 2.88 1.16 7.1

 

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Additional Inferred 284 2.55 0.95 6.4

 

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Classification Contained Cu Contained Gold Contained Silver (000’s lbs)(x) (000’s oz)(x) (000’s oz)(x)

 

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Measured (M) – – –

 

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Indicated (I) 34,349 20 123

 

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Additional Inferred 15,966 9 58

 

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(x)Rounded to nearest thousand

 

(xx)Totals may not add exactly due to rounding

 

A significant percentage of the Minto East mineral resource is already in the indicated category but, in consideration of the high grade nature of the Minto East mineralization and its potential significance in any underground mine development at Minto, drilling has resumed with one rig, in order to infill the inferred portions of the new resource estimate to a minimum of indicated class as well as continuing to step out to the east. A second drill will test chargeability targets identified in the current Titan-24 IP survey. This survey which will cover about 85% of the mine property, is approximately 60% complete.

 

Mineral Resource Estimates

 

The Minto East mineral resource estimate reported herein for Minto East was estimated by Garth Kirkham P. Geo. of Kirkham Geosystems who is the Independent Qualified Person under National Instrument 43-101 responsible for the Minto East mineral resource estimate. The Minto East mineral resource estimation was completed in MineSight(R) using a 3 dimensional block model and a geology model based upon 16 boreholes. The block model consisted of 10 x 10 x 3 m block sizes using 1.5m composites and the mineralization was interpreted as 1 domain. Wireframes were created and geostatistical analysis was completed on both the assay data and the 1. 5m composite data for each of the metals estimated. The resulting interpretation is a relatively flat lying mineralized zone with good continuity, an interpretation consistent with the resource models for adjacent deposits. The block grades were interpolated using independently derived ID2 parameters. Resource classification methodology takes into account both continuity of the mineralization and sample density of the exploration drilling.

 

SRK Consulting of Vancouver is nearing completion of new NI43-101 mineral resource estimates for two other deposits, Area 2 / 118 and Ridgetop, the results of which are expected soon and are anticipated to generate targets for further drill testing.

 

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.

 

Titan-24 IP Survey

 

The 2010 Titan 24 IP survey, which is planned to cover approximately 60 line kilometres, is approximately 60% complete and will cover about 85% of the mine property when finished. The survey was suspended due to the recent wildfire but is expected to recommence next week. Preliminary 2D inversion models have been received for the partial survey and several new chargeability anomalies have already been identified and will be drill tested in the coming weeks.

 

Drill Program

 

After a short break for freshet and a delay due to the recent wildfire , drilling has now recommenced with several objectives in mind:

 

(1) Increase the borehole density at Minto East sufficient to infill most of the current inferred mineral resource to an indicated classification or better, which would be sufficient for conversion to mineral reserves should economic factors warrant.

 

(2) Test the limits of the current Minto East resource for possible expansion, where it currently remains open to the east and southeast.

 

(3) Test new Titan-24 chargeability anomalies recently identified in areas not previously drilled.

 

(4) Increase the borehole density in a “connector” region between Area 2 and north Copper Keel sufficient to expand and define to a minimum of an indicated mineral resource classification, this mineralization lying beneath or adjacent to the current limits of the proposed Area 2 open pit.

 

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 and reviewed by Stephen P. Quin, P. Geo., President of Capstone Mining Corp., who has reviewed the content of this press release. The exploration activities at the Minto project site are carried out under the supervision of Brad Mercer, P. Geol., V.P. Exploration for Capstone. The mineral resources discussed in this new release were estimated by the following:

 

Garth Kirkham (P. Geo.) of Kirkham Geosystems Ltd. is the Independent Qualified Persons under National Instrument 43-101 responsible for the Minto East mineral resource estimate and has reviewed the information in this release in respect of the Minto East mineral resource estimates.

 

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 for gold. 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, the pulp and screen metallic assay method is used to determine the total gold content and gold contents 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 at Minto, random check assays will be carried out by Acme Analytical of Vancouver.

 

Forward-Looking Statements

 

This document may contain “forward-looking statements” within the meaning of Canadian securities legislation and the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements are made as of the date of this document and Capstone Mining Corp. ( hereinafter referred to as the “Company”) do not intend, and do not assume any obligation, to update these forward-looking statements.

 

Forward-looking statements relate to future events or future performance and reflect management of the Company’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 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.

 

For further information: about Capstone, please contact:

Darren Pylot, Vice Chairman & CEO

Stephen Quin, President

Or Investor Relations’ Zobeida Slogan at +1-(604)-684-8894 or +1-(866)-684-8894

zslogan@capstonemining.com

 

SOURCE: Capstone Mining Corp.