Capstone Announces Initial Mineral Resource Estimate for Footwall Zone at Cozamin Mine
VANCOUVER, June 20, 2011 /CNW/ --
Adds 74 million pounds of copper in the M&I Class and 163 million pounds in the Inferred Class
VANCOUVER, June 20, 2011 /CNW/ - Capstone Mining Corp. ('Capstone') (TSX: CS) today announced the result
of an initial mineral resource estimate for the Mala Noche Footwall
Zone ('MNFWZ') at the Cozamin Mine in Zacatecas, Mexico. This is a
preliminary resource and exploration is continuing.
'The size and grade of this new mineral resource estimate allows
Capstone to now consider production expansion scenarios as well as
extended mine life in an upcoming pre-feasibility study to begin in the
third quarter of 2011,' said Brad Mercer, Vice-President, Exploration
for Capstone. 'The copper grade of this new resource located in the
footwall to the main ore zone is higher than the current mineral
reserve grades for the mine. Our Cozamin team has successfully
undertaken test mining in the MNFWZ from two crosscuts driven from
active mine workings to levels 12.0 and 12.8 in the MNFWZ where they
have drifted both east and west using conventional cut and fill mining
methods and have already extracted approximately 18,000 tonnes grading
2.67% copper,' he added.
Cozamin Mine - Mineral Resources by Class for the MNFWZ at a US$35 NSR
Cut-off Grade ('COG')*
_______________________________________________________________________
|Classification|Tonnes |Copper|Silver|Zinc|Contained|Contained|Contained|
| |(000's)| |(g/t) | | Cu | Silver | Zn |
| | | (%) | |(%) | (M lbs) | (M oz) | (M lbs) |
|______________|_______|______|______|____|_________|_________|_________|
|Measured (M) | 329 | 2.25 | 32.3 |0.11| 16.3 | 0.342 | 0.8 |
|______________|_______|______|______|____|_________|_________|_________|
|Indicated (I) | 1,122 | 2.34 | 37.8 |0.19| 57.9 | 1.364 | 4.6 |
|______________|_______|______|______|____|_________|_________|_________|
|Total (M+I) | 1,451 | 2.32 | 36.6 |0.17| 74.2 | 1.706 | 5.4 |
|______________|_______|______|______|____|_________|_________|_________|
|Additional | 2,836 | 2.61 | 30.8 |0.28| 162.9 | 2.812 | 17.6 |
|Inferred | | | | | | | |
|______________|_______|______|______|____|_________|_________|_________|
* Metal Price assumptions (in USD) and recovery assumptions used to
calculate the NSR COG are exactly the same as for the Cozamin Mine's
Mineral Reserve. Prices: Cu=$2.50; Zn=$0.80; Ag=$4.00. Processing
recoveries: Cu=92%; Zn=70%; Ag=72%.
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. Even though test mining has been undertaken in areas with M&I
class mineral resources there is no certainty that inferred mineral
resources will be converted to measured and indicated categories
through further drilling, or into mineral reserves, once economic
considerations are applied.
Mineral Resource Estimate Methodology
The mineral resource estimate for the MNFWZ reported herein was prepared
by Capstone's geological team at the Cozamin Mine in Zacatecas, Mexico
and the methodology and results have been reviewed by independent
consultant Mr. Robert Sim, P.Geo. of SIM Geological Inc. of Delta, BC,
Canada. The estimate was completed using GEMS© software using a three
dimensional block model (3 m by 2 m by 2 m block size). The dyke that
hosts the MNFWZ mineralization was interpreted as a three dimensional
wireframe domain that was used as a hard boundary to constrain the
estimation. Interpolation parameters have been derived based on
geostatistical analysis conducted on 0.5 metre composited drill hole
and channel sample data. Block grades have been estimated using
ordinary kriging and the resource has been classified based on
proximity to sample data and the continuity of mineralization in
accordance with CIM best practices. The MNFWZ resource has been
estimated using a total of 73 diamond drill holes, variably spaced at
50 to 150 metre intervals, and 72 chip channels taken at approximately
3 metre intervals across the back of the test mining drifts.
Capstone's Future Exploration Plans Regarding the MNFWZ
In preparation for a pre-feasibility study to start in the third quarter
of 2011 that will examine the current mine and processing plant
capacities in light of this new discovery, two underground diamond
drills are actively infill drilling the MNFWZ mineral resource area.
The aim is to upgrade the classification of the current inferred
mineral resource to indicated class or better so that economic
considerations may be applied for the purpose of establishing a new
mineral reserve (see cautionary note above regarding conversion of
mineral resources to mineral reserves). In addition to exploration
drilling aimed at reclassification of mineral resources, a third drill
is scheduled to start in July to step out to the east and down-dip
beyond the extents of the current resource estimate to test for
extensions to the mineralization where drilling now clearly shows the
zone is still open in both directions. In preparation for the arrival
of that third underground drill rig Capstone is currently upgrading
mine ventilation and preparing new drill stations.
About Capstone Mining Corp.
Capstone Mining Corp. is a TSX listed Canadian mining company with two
producing copper mines in the Americas: the Cozamin
copper-silver-zinc-lead mine located in Zacatecas State, Mexico and the
Minto copper-gold-silver mine in Yukon, Canada.
Using its operations as a springboard, Capstone aims to grow organically
and through acquisitions in politically stable, mining-friendly
jurisdictions, with a focus in the Americas: organic growth through
continued mineral resource and reserve expansions as well as expanding
operations at its operating mines, development of its large 70% owned
Santo Domingo copper-iron-gold project in Chile in partnership with
Korea Resources Corporation, development of its Kutcho
copper-zinc-gold-silver project in British Columbia and exploration at
properties in Chile, British Columbia and Australia. Capstone's cash
flow and strong balance sheet provide the platform to enhance that
growth profile. Capstone is included in the S&P/TSX Composite Index
and S&P/TSX Global Mining Index. Additional information is available
at www.capstonemining.com.
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 ('NI 43-101') and reviewed by Brad Mercer, P. Geol.,
Vice President, Exploration for Capstone, the person who oversees
exploration activities on the Cozamin Mine property.
The mineral resource estimate reported herein has been produced by
Cozamin Mine Geologist Cesar Pena and has been reviewed by independent
consultant Robert Sim, P.Geo. of SIM Geological Inc. The mineral
resources presented herein have been estimated in conformity with
generally accepted CIM 'Estimation of Mineral Resource and Mineral
Reserves Best Practices' guidelines and are reported in accordance with
Canadian Securities Administrators' National Instrument 43-101. Mineral
resources are not mineral reserves and do not have demonstrated
economic viability.
Analyses for copper, zinc, lead, silver and gold were completed by ALS
Chemex using the following method. The entire sample is crushed to a
minimum of 70% minus 10 mesh. A 250g subsample of the crushed material
is then pulverized to 85% minus 200 mesh. Gold and silver grades are
determined by gravimetric fire assay using a 50g charge taken from the
pulverized material. Copper, zinc and lead are determined by ICP
analysis after 4 acid digestion of a 0.4g subsample of the pulverized
material. Blank, standard and duplicate samples are used for quality
assurance and quality control.
Cautionary Note Regarding Forward-Looking Information
This document 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. (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 Company management'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 mineral
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.
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Capstone Mining Corp.
Cindy Burnett, VP, Investor Relations
Telephone: 604-637-8157
Email: cburnett@capstonemining.com
Website: www.capstonemining.com