Capstone Mining Corp Operational Highlights for the three and six months ended June 30, 2011

The following is a summary of operational highlights for Capstone during the three and six months, respectively, ended June 30, 2011:

Production of 21.2 and 37.9 million pounds of copper contained in concentrates, respectively.
By-product production of 4.5 and 8.7 million pounds of zinc, 1.0 and 1.7 million pounds of lead and 479,690 and 847,396 ounces of silver in concentrates, respectively. Final gold production is not available since assaying is done off site, but is estimated at 6,842 and 9,437 ounces for the respective periods.

At Cozamin, remediation activities in the mine were completed in March, allowing production from the Avoca and 11E stopes to proceed at planned levels. This contributed to higher mined and processed tonnages for the second quarter relative to the first quarter.
At Minto, production exceeded expectations due to the successful implementation of pre-crushing for the SAG mill feed.
The implementation of contract pre-crushing starting in mid-April allowed mill throughput to exceed expectations. May mill throughput set a monthly record of 115,913 tonnes, or 3,739 tonnes/day, and June throughput has continued above plan.
Mill grades were higher than planned in the second quarter due to the delayed entry into the final stage of the Main Pit (Stage 5). Mining of Stage 5, originally planned for the first quarter, was completed in late-April with ore production slightly exceeding expectations. As a result, less lower grade stockpile material was processed in the second quarter.
Higher mill throughput and grade was partially offset by reduced mill recovery. The reduced recovery is partly due to higher throughput and attendant reduced retention time in the floatation circuit. However, issues with the efficiency of the scavenger flotation circuit have been identified and are being corrected, with measurable improvement seen by late-June.
Minto received the amended Quartz Mining License in April and Area 2 pre-stripping and development of the underground portal is proceeding.