A Leading Intermediate Copper Producer September 2014 1 Cautionary - PowerPoint PPT Presentation

A Leading Intermediate Copper Producer September 2014 1

Cautionary Note Forward Looking Information This presentation, and the documents incorporated by reference herein, 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 -loo king statements”). These forward-looking statements are made as of the date of this document and Capstone 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 our expectations or beliefs regarding future events. Forward-looking statements include, but are not limited to, statements with respect to the estimation of mineral resources and mineral reserves, the realization of mineral reserve estimates, the timing and amount of estimated future production, costs of production and capital expenditures, the success of our mining operations, environmental risks, unanticipated reclamation expenses and title disputes. In certain cases, forward-looking statements can be identified by the use of words such as “plans”, “expects”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, “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 that may cause our actual results, performance or achievements 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 inherent hazards associated with mining operations; future prices of copper and other metals; counterparty risks associated with sales of our metals; our ability to raise capital; foreign currency exchange rate fluctuations; accuracy of mineral resource and mineral reserve estimates; changes in general economic conditions; uncertainties and risks related to the potential development of the Santo Domingo Project; increased operating and capital costs; challenges to title to our mineral properties; operating in foreign jurisdictions with risk of changes to governmental regulation; compliance with governmental regulations; dependence on key management personnel; compliance with environmental laws and regulations; reliance on approvals, licenses and permits from governmental authorities; impact of climatic conditions on our Pinto Valley, Cozamin and Minto operations; potential conflicts of interest involving our directors and officers; aboriginal title claims and rights to consultation and accommodation; limitations inherent in our insurance coverage; land reclamation and mine closure obligations; labour relations; increasing energy prices; competition in the mining industry; risks associated with joint venture partners; and our ability to integrate new acquisitions into our operations. Although we have attempted to identify important factors that could cause our actual results, performance or achievements to differ materially from those described in our forward-looking statements, there may be other factors that cause our results, performance or achievements not to be as anticipated, estimated or intended. There can be no assurance that our forward-looking statements will prove to be accurate, as our actual results, performance or achievements could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on our forward-looking statements. Alternative Performance Measures “C 1 Cash Cost”, “Cash Cost” and “Adjusted Net Earnings” are Alternative Performance Measures. Alternative performance measures are furnished to provide additional information. These performance measures are used by management to monitor performance, to plan and to assess the overall effectiveness and efficiency of mining operations. These performance measures may not be comparable to similar data presented by other mining companies. These performance measures should not be considered in isolation as a substitute for measures of performance included in the Company’s unaudited condensed interim consolidated financial statements prepared in accordance with IFRS. Currency All amounts are in US$ unless otherwise specified. 2 2

About Capstone Low-risk copper producer focused on the Americas Minto Yukon, Canada Kutcho BC, Canada Head Office Stable cash flow generation from three mines BC, Canada Pinto Valley Arizona, US Financial flexibility to fund growth Cozamin Zacatecas, Mexico Proven track record of sustainable growth Santo Domingo Region III, Chile A leading intermediate copper producer 3

Portfolio PRODUCTION DEVELOPMENT EXPLORATION Growth Projects Portfolio Three operating mines Short term Long term Disciplined approach to Early-stage base metals Production assets located in construction, offering significant stable geographies in the exploration properties growth in planned copper Americas producing production over next five years >100 k tonnes of copper annually  Pinto Valley  Santo Domingo  Chile Arizona, US Region III, Chile  SQM - option to earn up 66.3 k tonnes copper 1 CS 70%; KORES 30% to 70% of Project Providencia  Cozamin  Kutcho (3,500 sq km) Zacatecas State, Mexico British Columbia, Canada  CS 70%; KORES 30% 20 k tonnes copper 1 - 6 properties  Minto Yukon, Canada 18.5 k tonnes copper 1 1. ± 5%; see news release dated March 26, 2014. 4 4

Two-Tiered Growth Strategy 1. Robust organic growth potential  Increasing production at Cozamin and Minto  Potential increase at Pinto Valley - PV3 scoping study underway  Further exploration opportunities at operating mines  Advancing the Santo Domingo project  Building the exploration portfolio 2. Growth through strategic acquisition  Maintain disciplined approach with a conservative and flexible balance sheet  Low-risk, mining-friendly jurisdictions in the Americas Capstone is well-positioned for profitable growth, supported by considerable financial flexibility 5 5

Pinto Valley Mine Producing Copper Mine Acquired in October 2013  Operating copper mine in Globe-Miami district of Arizona: Asset diversification into one of the  world’s most favorable mining jurisdictions for tax, regulation and labour  Fully permitted with established infrastructure and skilled workforce 6 6

2012 Restart Capital Cost ($US M) 1 $194M restart capital incorporated lessons learned from previous restart Mine  Acquired new mining fleet $3.9 (2%) Contractors' Indirect (2)  Upgraded electrical and controls $8.9 (5%)  Significantly improved plant SMARRCO $11.4 (6%) EPCM conditions to HSEC standards $14.2 (7%) Mine Fleet $63.8 (33%)  In-sourced mining Infrastructure $21.2 (11%) Owner Cost $27.1 (14%) Processing $43.7 (22%) Pinto Valley operations have been elevated to world-class standards 1.Source BHP Copper. 2. The cost of employing contractors during project execution. 7 7

Pinto Valley Mine Open Pit Mine in Arizona, US Mine life (years) 12.3 Production – 2014 Guidance (k tonnes Cu ±5%) 66.3 Production 3 – Six Months 2014 YTD (k tonnes) 34.7 C1 cash cost 1 – Six Months 2014 YTD ($/payable lb Cu) $2.10 C1 cash cost 1 – 2014 guidance ($/payable lb Cu) $1.90 - $2.00 Measured & Indicated resources 2 (M tonnes) 1,563 Copper grade (%) 0.30 Measured & Indicated contained copper 2 (k tonnes) 4,765 By-products Mo, Ag Key Points  PV2 mine plan represents only 16% of the total M&I resource  Work underway to evaluate possible mine life extension beyond 2026 and potential increase in throughput  Potential for meaningful impact on production and growth  PV2 PFS does not include all the projected impact of process improvements Pinto Valley adds 57 thousand tonnes of copper annually for over 12 years 1. C1 Cash Cost is an Alternative Performance Measure, which is net of by-product credits as well as treatment and selling costs. See Forward-Looking 8 8 Statements slide for 43-101 information. 2. Measured and Indicated Mineral Resource Estimate, March 2014, at 0.18% Cu Cut-off Grade. 3. Includes concentrate and cathode.

PV2 Pre-Feasibility Summary – March 2014 Summary of March 2014 PV2 PFS Mine Life (years) 12.3 1,563mt@0.30% (1) Mineral Resources Mineral Reserves 232mt@0.33% Planned Throughput (ktpd) 50 - 52 Avg. Annual Production 119.5 – Contained in Concentrate (M lbs) Avg. Annual Production 6.3 – Cathode (M lbs) Est. LOM Avg. C1 Cash Costs $2.00 LOM Sustaining Capital ($ millions) $187.9 After-tax NPV, 8% ($M) $738 1. Measured and Indicated Mineral Resource Estimate, March 2014, at 0.18% Cu Cut-off Grade. 9 9

PV2 Mine Plan Total Material Moved 50 0.40% M aterial Mined (M t/year ) 45 0.35% 40 0.30% Copper Grade % 35 0.25% 30 25 0.20% 20 0.15% 15 0.10% 10 0.05% 5 0 0.00% 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Capital Expenditure ($M) 47 62 12 12 9 11 14 6 5 5 3 2 0 Payable Copper (k tonnes) 64.1 54.8 65.1 55.8 56.2 54.1 57.0 56.1 54.7 52.3 59.7 41.0 12.0 10 10