Capstone Copper Corp T.CS

Updated Resource Report

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Just shy of 6M tons M&I makes for a nice mine life at 1000 or 2000 tpd. Capstone Mining Corp.: Updated Resource Estimate at the Cozamin Copper-Silver-Zinc Mine, Zacatecas State, Mexico VANCOUVER, BRITISH COLUMBIA, Jul 5, 2006 (CCNMatthews via COMTEX News Network) -- Capstone Mining Corp. (TSX:CS) - HIGHLIGHTS - An updated resource estimate has been completed for the Cozamin copper-silver-zinc mine. - Cozamin mine resource estimate at a 1% cut-off grade: - The measured and indicated categories increases to 2.76 million tonnes containing 152.15 million pounds of copper and 7.58 million ounces of silver; - The Inferred category increases to 3.09 million tonnes containing 151.26 million pounds of copper and 7.86 million ounces of silver; COZAMIN RESOURCE UPDATED YIELDING INCREASED GRADE AND TONNAGE A new independent resource estimate has been completed for the Cozamin copper-silver-zinc mine located in Zacatecas State, Mexico. This new resource estimate significantly increases the contained metal within the Measured and Indicated Resource categories. Table 1: TOTAL MEASURED RESOURCES - COZAMIN MINE, JUNE 2006-------------------------------------------------------------------- Cu AgCut Tonnes (Mill- (Mill-Off greater ion ionGrade than Ag Cu Zn Pb Au lbs) oz)% Cu Cut Off (g/t) (%) (%) (%) (g/t) (i) (i)--------------------------------------------------------------------0.25 780,000 72.06 2.01 1.08 0.56 0.06 34.57 1.81--------------------------------------------------------------------0.50 700,000 77.38 2.20 1.06 0.55 0.06 33.96 1.74--------------------------------------------------------------------1.00 550,000 86.56 2.58 1.07 0.48 0.05 31.29 1.53--------------------------------------------------------------------1.25 500,000 88.83 2.74 1.08 0.47 0.05 30.21 1.43--------------------------------------------------------------------1.40 460,000 89.54 2.86 1.08 0.43 0.05 29.01 1.32--------------------------------------------------------------------Table 2: TOTAL INDICATED RESOURCES - COZAMIN MINE, JUNE 2006-------------------------------------------------------------------- Cu AgCut Tonnes (Mill- (Mill-Off greater ion ionGrade than Ag Cu Zn Pb Au lbs) oz)% Cu Cut Off (g/t) (%) (%) (%) (g/t) (i) (i)--------------------------------------------------------------------0.25 2,690,000 76.96 2.14 1.16 0.52 0.06 126.93 6.66--------------------------------------------------------------------0.50 2,480,000 81.18 2.29 1.14 0.51 0.06 125.23 6.47--------------------------------------------------------------------1.00 2,210,000 85.13 2.48 1.14 0.47 0.05 120.85 6.05--------------------------------------------------------------------1.25 2,010,000 86.52 2.61 1.12 0.44 0.05 115.68 5.59--------------------------------------------------------------------1.40 1,880,000 87.32 2.70 1.12 0.41 0.05 111.93 5.28--------------------------------------------------------------------Table 3: TOTAL MEASURED & INDICATED RESOURCES - COZAMIN MINE,JUNE 2006-------------------------------------------------------------------- Cu AgCut Tonnes (Mill- (Mill-Off greater ion ionGrade than Ag Cu Zn Pb Au lbs) oz)% Cu Cut Off (g/t) (%) (%) (%) (g/t) (i) (i)--------------------------------------------------------------------0.25 3,470,000 75.87 2.11 1.15 0.53 0.06 161.44 8.46--------------------------------------------------------------------0.50 3,170,000 80.34 2.27 1.12 0.52 0.06 158.67 8.19--------------------------------------------------------------------1.00 2,760,000 85.42 2.50 1.12 0.47 0.05 152.15 7.58--------------------------------------------------------------------1.25 2,510,000 86.98 2.63 1.11 0.44 0.05 145.56 7.02--------------------------------------------------------------------1.40 2,340,000 87.75 2.73 1.11 0.41 0.05 140.86 6.60--------------------------------------------------------------------Table 4: TOTAL INFERRED RESOURCES - COZAMIN MINE, JUNE 2006-------------------------------------------------------------------- Cu AgCut Tonnes (Mill- (Mill-Off greater ion ionGrade than Ag Cu Zn Pb Au lbs) oz)% Cu Cut Off (g/t) (%) (%) (%) (g/t) (i) (i)--------------------------------------------------------------------0.25 3,860,000 71.10 1.89 1.33 0.30 0.07 160.86 8.82--------------------------------------------------------------------0.50 3,520,000 75.28 2.04 1.30 0.29 0.06 158.34 8.52--------------------------------------------------------------------1.00 3,090,000 79.07 2.22 1.29 0.27 0.06 151.26 7.86--------------------------------------------------------------------1.25 2,770,000 80.52 2.34 1.27 0.26 0.06 142.92 7.17--------------------------------------------------------------------1.40 2,620,000 81.09 2.40 1.27 0.27 0.06 138.65 6.83--------------------------------------------------------------------Note: (i) 1 kilogram equals 2.2 lbs.; 31.103 grams equals 1 oz. Troy This new resource estimate has been completed by independent qualified person Gary H. Giroux, P.Eng., MASc., of Giroux Consultants Ltd. in Vancouver, B.C. This estimate is based on an updated 3D geologic model integrating an additional 10,320.97 meters of diamond drilling and 2,706 assays from 47 underground NQ-core drill holes and 768 channel samples collected in 2006. These data augmented the 25,325.44 meters of drilling in 37 surface and 66 underground core holes and 48 underground channel samples used in the prior resource estimate. Grades for the model were estimated using ordinary kriging procedures from 2 meter composited intervals within the copper sulphide zone. High-grade samples were capped on the basis of lognormal probability plots of each contained metal. Full resource tables and drill intercept locations related to the above totals for the Cozamin resource estimate are available on the Company's website www.capstonemining.com. Table 5 below summarizes the final 5 underground definition drill intercepts from the Phase III definition drill program. These drill intercepts were included in the new resource estimate. Table 5: COZAMIN PHASE III DRILL RESULTS - COZAMIN MINE-------------------------------------------------------------------- (i) Inter- TrueNQ Core From To val Width Ag Cu Zn PbHole No. (m) (m) (m) (m) (g/t) (%) (%) (%)--------------------------------------------------------------------CG-06-U109 358.00 364.00 6.00 2.07 60.6 2.6 1.8 0.03--------------------------------------------------------------------CG-06-U111 135.50 147.00 11.50 4.66 71.2 2.7 0.2 0.01-------------------------------------------------------------------- Including 139.75 147.00 7.25 2.94 85.0 3.8 0.3 0.20--------------------------------------------------------------------CG-06-U112 319.50 323.00 3.50 1.90 118.9 5.5 0.6 0.10--------------------------------------------------------------------CG-06-U113 343.30 349.00 5.70 1.89 78.9 4.0 1.1 0.02--------------------------------------------------------------------CG-06-U114 282.00 294.00 12.00 7.44 34.7 1.7 0.2 0.01-------------------------------------------------------------------- Including 291.00 294.00 3.00 1.86 101.3 4.7 0.2 0.03--------------------------------------------------------------------(i) True widths are estimated by correcting for the strike and dip of the vein with regard to the bearing and inclination of the drill hole. Capstone has now completed the Phase III underground definition drilling program which consisted of 114 NQ diameter diamond drill holes. This program has defined resources in approximately 65% of the area indicated as prospective by surface exploration drilling in 2004 and early 2005. This prospective area remains open along strike and down dip and will be the target of a 10,000 meter, Phase IV, surface exploration program planned to commence in September 2006. In addition, Capstone anticipates starting a 20,000 meter Phase V underground definition drill program in the fourth quarter of 2006. Capstone expects that these drill programs will continue to increase the resources at Cozamin. The Phase I, II and III drill programs and sampling protocol were supervised by qualified person Hugh Willson, Vice President of Exploration for Capstone. A quality control and assurance protocol was utilized on the project including blank and reference samples with each batch of assays. Capstone's drill samples were assayed by SGS Mineral Services in Toronto, Ont., ALS Chemex Labs in Vancouver, B.C., and BSI Inspectorate Labs in Reno, Nevada. The independent resource estimation was done by qualified person Gary H. Giroux, P.Eng., MASc., of Giroux Consultants Ltd. ABOUT CAPSTONE Capstone Mining is a Canadian based mining company currently commissioning its 100% owned 1,000 tonne-per-day Cozamin copper-silver-zinc mine located in Zacatecas State, Mexico. Capstone has approximately 80 million shares outstanding and is well financed with no debt. More information is available online at: www.capstonemining.com. SOURCE: Capstone Mining Corp. Capstone Mining Corp. Chris Tomanik [phone] [phone] (FAX) [e-mail] www.capstonemining.com