Cozamin Mine Tour April 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; 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 Cozamin operation; 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
Location & History 3
Historical Mining District Concepción Del Oro Juan ALdama El Paso N Río Grande Sombrerete Cos Fresnillo Hermosillo 1 Zacatecas Chihuahua 2 3 4 5 6 13 Durango Cozamin Mine 7 9 Au-Ag Mine Districts and 8 Zacatecas City Projects along the Sierra Madre Mazatlán 4 1. Dolores 2. Mulatos 10 12 3. Morís 11 México City 4. El Sauzal 5. Topia Guadalajara 6. La Cienega 7. Guadalupe de Los Reyes 8. Bacis 9. Tayoltita 10.Bolaños 11.Guanajuato 12.Pachuca 13.San Sebastián 4
Location Defiance Silver Corp. Goldcorp Capstone San Acacio Cozamin Source: Defiance Silver Corp. and Wikipedia 5 5
Close Proximity to Zacatecas City Cozamin Downtown Zacatecas Source: Google Earth maps. 6
History of Cozamin Mine January 2004 Capstone options Cozamin Mine May 2004 Confirms high grade copper and silver values October 2004 Phase 1 drill results increase grade and tonnage and underground development begins December 2005 Capstone acquires 90% interest in Cozamin March 2006 Results of feasibility study reported August 2006 Updated Mineral Resource Estimate September 2006 Cozamin mine achieves commercial production on time and under budget October 2007 Increased Mineral Resources and mill expanded from 1,000tpd to 2,200tpd September 2008 Cozamin expansion completed from 2,200tpd to 3,000tpd February 2009 Updated Mineral Resource Estimate June 2009 New life-of-mine plan and Mineral Reserves September 2009 Additional mineral claims March 2010 Increased Mineral Resource Estimate April 2010 Exploration drilling commences September 2010 Announcement of discovery of Mala Noche Footwall Zone (MNFWZ) February 2012 Updated Mineral Resource for MNFWZ March 2013 Updated Mineral Resource for MNFWZ December 2013 Updated Mineral Resource for MNFWZ 7 7
Geology and Exploration 8
Regional Geology 9
Structures, Mineral Concession, Exploration Areas 10
Cozamin Mining Areas San Roberto Shaft 11 11
Cozamin Mine Exploration Potential Current Mineral Resource/Reserve over length of 1.5 km 2014 Exploration Budget $3 million (10,000 m) Mala Noche Vein (MNV) extends for 5.5 km - still open Surface drilling testing of splays that have not to West previously been tested, targeting new mineralized zones Mala Noche Footwall Zone (MNFWZ) 0.7 km - slightly open to East, West, and down dip 12 12
2012-2013 Drilling Level 10, Different Elevation 13
Crosscut 10E-MNFWZ Section B-B 14
San Roberto Mine Resource Classification San Ernesto Ramp Section Guadalupana Ramp Section 747 920 E 746 826 E San Roberto Virginias Shaft San Rafael San Tiburcio Shaft Shaft Shaft Mining Blocks 15 15
MNFWZ Resource Classification San Roberto Shaft 16 16
Cozamin Mineral Resources 1 MINERAL RESOURCES – Inclusive of Mineral Reserves CONTAINED METAL 000’s Cu Zn Pb Ag Cu Zn Pb Ag Category Tonnes % % % g/t Mlbs Mlbs Mlbs kozs San Roberto Measured 3,290 1.57 1.44 0.53 65 114 104 38 6,869 & MNFWZ Indicated 8,530 1.43 0.98 0.16 43 269 184 30 11,720 (Mala Noche Footwall Zone) M&I 11,970 1.45 1.16 0.27 49 383 307 72 18,772 Inferred 3,340 1.39 0.91 0.10 36 103 67 7 3,853 San Rafael Measured 0 0 0 0 0 0 0 0 0 Zinc Deposit Indicated 1,150 0.33 3.64 0.49 49.28 8.4 92.4 12.5 1,822 M&I 1,150 0.33 3.64 0.49 49.28 8.4 92.4 12.5 1,822 Inferred 750 0.13 3.62 0.77 37.83 2.1 59.9 12.7 912 Cozamin Total Measured 3,290 1.57 1.44 0.53 65 114 104 38 6,875 Indicated 9,680 1.30 1.30 0.20 44 277 277 43 13,615 M&I 13,120 1.35 1.38 0.29 49 391 398 84 20,679 Inferred 4,090 1.16 1.41 0.22 36 105 127 20 4,778 (1) As of December 31, 2013. Totals may not add due to rounding. Metal price assumption (in USD) used to calculate the $35 NSR COG for all deposits are Cu=$2.50/lb, Zn=$0.80/lb, Pb=$0.85/lb, and Ag=$20.00/oz. Processing recoveries used to calculate the NSR COG for the MNFWZ Resource are based historical site operating experience reflecting recoveries of: Cu=92%; Zn=69%; Ag=72%; Pb=64%. Processing recoveries used to calculate the NSR COG for the San Rafael Resource are based historical site operating experience reflecting recoveries of: Cu=57%; Zn=79%; Ag=61%; Pb=56%. All Mineral Reserve Estimates are inclusive of dilution and mining recovery factors. Mineral Reserves are presented inclusive of Mineral Resources. See Technical Reports filed under Capstone’s profile on SEDAR for further information. 17 17
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