Mr. Darren Pylot reports

CAPSTONE MINING 2016 SECOND QUARTER PRODUCTION RESULTS

Capstone Mining Corp. has released its production results for the three and six months ended June 30, 2016. Combined production totalled 28,100 and 52,700 tonnes of copper in the second quarter and year-to-date periods, respectively, with additional byproducts of zinc, molybdenum, lead, silver and gold.

               Q2 2016 COPPER PRODUCTION 
                       (In tonnes)
  
                                Q1      Q2  YTD 2016

Pinto Valley                16,400  18,800    35,200
Cozamin                      3,700   3,300     7,000
Minto                        4,500   6,000    10,500
Total copper production(1)  24,600  28,100    52,700

(1) Total production includes copper in concentrate 
and cathode production.

"Consolidated copper production for the second quarter continued very strong, setting an all-time production record for Capstone. Pinto Valley exceeded expectations, achieving a third consecutive quarterly throughput record," said Darren Pylot, president and chief executive officer of Capstone. "The stability and reliability of operations at Pinto Valley has provided a solid foundation for us to devote our full attention to advancing further productivity improvements."

Operational highlights:

• At Pinto Valley, throughput continued above plan, setting a third straight quarterly throughput record of 55,700 tonnes per day and a quarterly production record. Better-than-planned copper grade and recovery also contributed to higher-than-planned production for the quarter.
• At Cozamin, production continued to be challenged by a shortfall in development. The mine underwent a reorganization in the quarter, and a number of additional process improvement and training resources were implemented. Development rates have consistently improved; however, Cozamin is not expected to reach its production guidance for 2016.
• At Minto, production was better than planned, led by strong throughput and recoveries resulting from continued lower-than-expected oxide content in the Minto North ore. Mining continues to advance in the Minto North pit, with copper grades above 2 per cent reaching the mill by early June, resulting in significantly higher production planned for the second half of the year. Underground mining continued through the second quarter and is planned to extend into the third quarter to take advantage of high-grade underground ore.

Operating outlook:

• Capstone's 2016 production guidance for 108,000 tonnes (plus or minus 5 per cent) of copper remains unchanged; however, the distribution by mine is expected to be different than originally guided, with outperformance at Pinto Valley and Minto expected to make up most of the anticipated shortfall at Cozamin for the year.

                                       Q2 2016 OPERATING DETAILS
    
                                              Pinto Valley            Cozamin             Minto

                                                Q2     YTD 2016        Q2 YTD 2016        Q2  YTD 2016
Contained production(1)  
Copper (tonnes)                             18,776       35,141     3,288    6,948     6,093    10,615
Zinc (tonnes)                                    -            -       928    1,740         -         -
Molybdenum (Mo tonnes)                          43           49         -        -         -         -
Lead (tonnes)                                    -            -        35       69         -         -
Silver (ounces)                            100,466      192,753   233,525  500,067    59,647   102,408
Gold (ounces)(2)                               264          705         -        -     4,881     7,995
Payable copper production(1) (tonnes)
(in concentrate and cathode)                18,150       33,966     3,156    6,659     5,895    10,270
Mine
Ore (tonnes) -- open pit                 5,714,618   11,229,147         -        -   470,650   799,551
Waste (tonnes)                           5,060,151    9,167,144         -        - 2,147,575 4,718,345
Ore (tonnes) -- underground                      -            -   240,747  482,910    21,101   132,066
Mill
Tonnes processed                         5,065,665   10,068,238   243,658  487,559   378,805   741,413
Tonnes processed per day                    55,667       55,320     2,678    2,679     4,163     4,074
Copper grade (%)                              0.40(3)      0.38(3)   1.42     1.51      1.68      1.51
Zinc grade (%)                                   -            -      0.63     0.63         -         -
Molybdenum grade (%)                         0.007        0.007         -        -         -         -
Lead grade (%)                                   -            -      0.08     0.08         -         -
Silver grade (g/t)                               *            *        41       44         6         5
Gold grade (g/t)                                 *            *         -        -      0.61      0.51
Recoveries
Copper (%)                                    89.7(3)      87.4(3)   94.8     94.6      95.5      95.1
Zinc (%)                                         -            -      60.3     56.8         -         -
Lead (%)                                         -            -      18.9     18.9         -         -
Silver (%)                                       *            *      72.8     71.8      82.6      80.4
Gold (%)                                         *            *         -        -      66.1      66.4
Concentrates
Copper concentrate (dmt)                    62,528      119,969    12,368   26,900    14,884    27,045
Copper (%)                                    29.2         28.4      26.6     25.8      40.9      39.3
Silver (g/t)                                     *            *       572      565       125       118
Gold (g/t)                                       *            *         -        -     10.20      9.20
Zinc concentrate (dmt)                           -            -     1,959    3,767         -         -
Zinc (%)                                         -            -      47.4     46.2         -         -
Molybdenum concentrate (dmt)                    93          105         -        -         -         -
Lead concentrate (dmt)                           -            -        64      122         -         -
Lead (%)                                         -            -      55.3     56.9         -         -
Silver (g/t)                                     -            -     2,897    2,967         -         -
Payable copper shipped (tonnes)             16,694       33,442     3,236    7,416     2,620     9,676

(1) Adjustments based on final settlements will be made in future periods. 
(2) Pinto Valley gold production reaches payable levels from time to time. Any payable gold production 
will be reported in the period revenue is received. At Minto, final gold production is not available 
since assaying is conducted off-site, but is estimated above. 
(3) Grade and recoveries were estimated based on concentrate production.  
* Silver and gold have not been estimated in the Pinto Valley resource model. Only recovered silver 
and payable gold are reported for this mine.

Financial results timing

Capstone will report Q2 2016 financial results on Tuesday, July 26, 2016, after market close, followed by a conference call and webcast for investors and analysts on Wednesday, July 27, 2016, at 11:30 a.m. ET (8:30 a.m. PT).

Conference call and webcast details:

Date:  Wednesday, July 27, 2016

Time:  11:30 a.m. ET (8:30 a.m. PT)

Dial-in numbers:  North America: 1-888-390-0546/international: 416-764-8688

Webcast:  available on-line

Replay numbers:  North America: 1-888-390-0541/international: 416-764-8677

Replay passcode:  301819 followed by the pound key

The conference call replay will be available until Wednesday, Aug. 3, 2016. The conference call audio and transcript will be available on Capstone's website within 48 hours of the call at the company's website.

National Instrument 43-101 compliance

The technical information in this news release was prepared by, or under the supervision of, a qualified person as defined in National Instrument 43-101. The disclosure of the technical information contained in this news release has been reviewed and approved by Gregg Bush, PEng, Capstone senior vice-president and chief operating officer, a qualified person under NI 43-101.

We seek Safe Harbor.