Name: Cozamin mine.

Location: The Cozamin mine is located in the Morelos municipality of the Zacatecas mining district, near the south-eastern boundary of the Sierra Madre Occidental Physiographic province, in north-central Mexico.

Controlling Company: Capstone Mining owns the Cozamin operation and operates it through its wholly owned subsidiary, Capstone Gold SA de CV.

Brief History: Zacatecas has been an active mining region since the sixteenth century and the near-surface portions of the Cozamin mine have been exploited by past operators.

Minera Cozamin was established in 1982. The first stage of the mine’s operation lasted until October 1996. It was then sold to Argenta, a subsidiary of Bacis, which invested in mining infrastructure and continued operations for three more years. In 1999, owing to low metal prices and inadequate capitalisation, Bacis closed the mine.

Capstone acquired a 90% interest in the Cozamin mine in 2005. Commercial production at the mine started in September 2006 and Capstone completed exploration, development and initial production at 350 000 t/y on time and within budget, with an initial three-year mine life in reserves. Production at Cozamin was quickly expanded by 120% in the first 12 months, with all capital expenditure funded from cash flow generated by the mine. A further expansion in 2008 resulted in production rising to one-million tonnes a year.

Brief Description: The Cozamin mine comprises 35 mining concessions covering an estimated 3 388 ha. Production is primarily from the Mala Noche main zone, supplemented by ore from the Mala Noche footwall zone, which is higher in grade, but has narrower widths than the main zone.

Geology/Mineralisation: The dominant mineralised vein on the Cozamin property is the Mala Noche. This vein has been traced for 5.5 km, strikes about east-west and dips on average at 60º to the north.

The Mala Noche vein system occupies a system of anastomosing faults that principally comprise the Mala Noche and El Abra faults, along with other less significant faults. The mineralised bodies within the Mala Noche appear to be strongest where the disparate faults coalesce into a single fault zone.

Reserves: Total proven and probable reserves as at December 31, 2013, were estimated at 9.9-million tonnes grading 1.42% copper, 45.58 g/t silver, 1.08% zinc and 0.25% lead.

Products: Copper, zinc, silver and lead.

Mining Method: Long-hole stoping, or cut and fill.

Major Infrastructure and Equipment: The mine features a crushing circuit, with primary, secondary and tertiary crushers and two screens; a grinding circuit, with two primary ball mills and one regrind ball mill; flotation/thickening/filtration circuits for copper, zinc and lead concentrates; and fully equipped assay and metallurgical labs.

The mine also has tailings storage capacity until mid-2016, with engineering for two more stages until 2020 in progress.

The mining fleet comprises four haul trucks, eight loaders, two jumbos drills, two jumbo bolters, two long-hole jumbos, one stope mate, one long-hole cubex, two highway trucks, one anfo loader, one scissors lift, two telehandlers, one passenger bus and two utility trucks for diesel.

Prospects: A surface and underground exploration programme is under way to target new mineralised zones to increase the mine’s reserves.

Contact Person: VP investor relations and communications Cindy Burnett.

Contact Details:
Capstone Mining,
tel + 1 604 684 8894,
fax +1 604 688 2180,
email info@capstonemining.com, and
website http://capstonemining.com.