Capstone Receives Quartz Mining License Amendment for Minto Mine

Press Release

Vancouver, British Columbia – Capstone Mining Corp. (“Capstone”) (TSX: CS) today announced that it has received an amended Quartz Mining License for the Minto North Deposit as outlined in the Phase V/VI Pre-Feasibility Study. It has not, however, received its Water Use License (“WUL”) amendment, which the Yukon Water Board believes is required in order to commence pre-stripping of Capstone’s Minto North pit.

Underground mining and milling operations are not affected and production guidance at Minto for 2014 is unchanged. The mill will process underground ore and stockpile for the remainder of the year as planned. The 2014 mine plan submitted in the license applications did however call for pre-stripping of the Minto North open pit, starting in September 2014. The delay in starting the pre-stripping  of Minto North has resulted in a revised mine plan which will bring forward fully permitted underground ore from Area 118, starting later this month, to maintain full mill production and partially offset the 2015 shortfall in ore from the Minto North open pit. Production in 2015 is not expected to be materially different than 2014, however the most significant production from Minto North will shift from 2015 to 2016.

As a result of the delay in pre-stripping, the surface mining contractor will be downsizing its crew at Minto, affecting approximately 50 people. This downsizing is in addition to the 44 jobs affected with the surface mining contractor in January 2014, when Minto slowed open pit mining to better align with the expected permitting timeline. Following the downsizing by the surface mining contractor, total direct and contract employment at Minto is approximately 250 people. Capstone’s 171 employees and present underground mining contract employees are not affected. Support contractor positions will be evaluated based on the reduction of personnel for the mining contractor.

“We are pleased to have received our Quartz Mining License amendment, however we believe the most prudent course of action is to delay the Minto North pre-stripping until we receive our WUL,” said Darren Pylot, Capstone’s President and CEO. “There is no change to our copper production guidance at Minto for 2014 and no material difference expected in 2015.”

“The most regrettable result is job losses at our surface mining contractor. We will continue to work closely with the Water Board staff in order to be in a position to recall our surface mining contractor as quickly as possible.”

The Minto Mine commenced operations with a six year mine life in 2007 from the Main pit, the only known ore deposit at that time. Since then, successful exploration has extended the mine life an additional nine years to 2021, assuming permits are received. Under the regulatory process in Yukon, new permits are required each time additional reserves are brought into the mine plan. Capstone made application to the Yukon Environmental Socio-Economic Assessment Board (“YESAB”) for all remaining identified copper reserves on the property in July 2013 and YESAB recommended in favour of the proposed continuation of operation of the Mine in April 2014. Application was made for the amended Quartz Mining and Water Use Licenses on July 2, 2014.

About Capstone Mining Corp.
Capstone Mining Corp. is a Canadian base metals mining company, focused on copper. We are committed to the responsible development of our assets and the environments in which we operate. Our three producing mines are the Pinto Valley copper mine located in Arizona, US, the Cozamin copper-silver mine in Zacatecas State, Mexico and the Minto copper mine in Yukon, Canada. In addition, Capstone has two copper development projects; the large scale 70% owned copper-iron Santo Domingo project in Region III, Chile, in partnership with Korea Resources Corporation, and the 100% owned copper-zinc Kutcho project in British Columbia, Canada, as well as exploration properties in Chile. Using our cash flow and strong balance sheet as a platform, Capstone’s strategy is to continue to grow with mineral resource and reserve expansions and exploration, and through acquisitions in politically stable, mining-friendly regions. We will pace our growth with our financial capacity, ensuring we retain, as a priority, sufficient financial flexibility to meet the requirements of our existing operations and our committed development projects, while maintaining an adequate cushion to deal with market volatility and operating risks inherent in the mining industry. Our headquarters are in Vancouver, Canada and we are listed on the Toronto Stock Exchange (TSX). Further information is available at www.capstonemining.com.

For further information please contact:

Cindy Burnett, VP, Investor Relations and Communications
604-637-8157
cburnett@capstonemining.com

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