Mr. Darren Pylot reports
CAPSTONE MINING ANNOUNCES SIGNIFICANT INCREASE TO COZAMIN RESOURCE ESTIMATE
Capstone Mining Corp. has released the results of an updated National Instrument 43-101-compliant mineral resource estimate for the Cozamin mine in Zacatecas, Mexico. Compared with the mineral resources as at Dec. 31, 2017, this latest estimate converted or added an additional 115,000 tonnes of copper in the indicated category in the Mala Noche footwall zone (MNFWZ), reflecting all drilling for which assays have been received up to March 19, 2018. At a $42-(U.S.)-net-smelter-return (NSR) cut-off grade (COG), the Cozamin mine's total measured and indicated (M&I) copper mineral resources, including adjustments for mining to March 31, 2018, were 217,000 tonnes of contained copper.
"We are extremely pleased with our recent drilling success in the MNFWZ at Cozamin," said Brad Mercer, senior vice-president of exploration at Capstone. "This new resource estimate, the culmination of over a year of intensive drilling, nearly triples the ore tonnes and doubles the contained copper in the MNFWZ M&I classification."
"We remain optimistic about the extension of operations at Cozamin well into the future," said Darren Pylot, president and chief executive officer of Capstone. "The increasing copper resource creates the potential for a mine expansion and utilization of surplus mill capacity that is currently being partially filled using ore from the San Rafael zinc zone (resource estimate in [the associated table]). The additional 115,000 tonnes of contained copper added to the M&I class in the MNFWZ will be targeted by mine engineering for potential conversion into mineral reserves in 2018, and inferred resources will be targeted in 2018 and 2019 for a potential classification upgrade to M&I. All resources in [the associated table] will provide the basis for a materials handling study, kicking off in mid-2018, to evaluate potential infrastructure needs to leverage upon our drilling success."
Subsequent to this resource estimate a further 31 holes have been drilled in the MNFWZ and the zone remains open updip and to the southeast, where the company is continuing 40,000 metres of stepout and infill drilling this year on the inferred class resource, part of the company's $7-million (U.S.) 2018 exploration program. Further drilling is anticipated in 2019.
ESTIMATE OF ALL MNFWZ MINERAL RESOURCES BY CLASS AND COG AS AT MARCH 31, 2018
Copper Silver Zinc Lead
NSR Tonnes NSR Copper Silver Zinc Lead metal metal metal metal
COG (kt) (US$) (%) (g/t) (%) (%) (kt) (koz) (kt) (kt)
Indicated classification
56 8,741 148.05 2.02 45 0.54 0.06 177 12,561 47 6
49 9,112 144.14 1.97 44 0.53 0.07 179 12,769 49 6
42 9,350 141.62 1.93 43 0.54 0.07 180 12,896 50 6
35 9,485 140.15 1.91 43 0.54 0.07 181 12,963 51 6
28 9,594 138.91 1.89 42 0.53 0.07 181 13,008 51 7
Inferred classification
56 4,883 135.52 1.7 46 1.02 0.43 83 7,156 50 21
49 5,127 131.54 1.64 45 1.03 0.42 84 7,357 53 22
42 5,354 127.88 1.59 44 1.03 0.41 85 7,584 55 22
35 5,506 125.4 1.56 44 1.03 0.4 86 7,742 57 22
28 5,621 123.47 1.53 44 1.04 0.39 86 7,861 58 22
Mineral resources reported using NSR 2018 formula: copper times 61.676 plus silver times
0.354 plus zinc times 14.521 plus lead times 11.208. Metal price assumptions (in U.S.
dollars) used to calculate the NSR for all deposits are: Cu equals $3.50/pound, Ag equals
$18/ounce, Zn equals $1.20/pound and Pb equals $1/pound. An exchange rate of 18.50
Mexican pesos per $1 (U.S.) is assumed. The following metal recoveries are used: 90 per
cent Cu, 74 per cent Ag, 79 per cent Zn abnd 76 per cent Pb. Resources are reported above
$42 (U.S.)/t NSR cut-off. Totals may not sum exactly due to rounding.
The current mineral reserves at the MNFWZ are primarily located in two subdomains called vein 10 and vein 20 that are actively being mined. These two veins, of the five MNFWZ veins, are best suited to the current mining method and are the target of the upcoming reserve evaluation. The potential of the remaining three veins will be examined in the future by looking at possible changes in mining method and the possibility of introducing ore sorting technology underground.
TARGETED MNFWZ MINERAL RESOURCE ESTIMATE BY CLASS AS AT MARCH 31, 2018, AT A $42 (U.S.) NSR COG*
Copper Silver Zinc Lead
Domain Tonnes NSR Copper Silver Zinc Lead metal metal metal metal
(kt) (US$) (%) (g/t) (%) (%) (kt) (koz) (kt) (kt)
MNFWZ resources targeted for conversion to reserve in 2018
Vein 10 indicated 1,517 123.33 1.68 34 0.67 0.04 25 1,651 10 1
Vein 20 indicated 5,368 168.79 2.42 52 0.44 0.04 130 8,947 24 2
Vein 10 and vein 20
indicated 6,885 158.77 2.26 48 0.49 0.04 155 10,599 34 3
MNFWZ resources targeted for infill drilling in 2018/2019
Vein 10 inferred 771 120.49 1.61 34 0.74 0.05 12 848 6 0
Vein 20 inferred 3,347 138.85 1.90 48 0.57 0.04 64 5,176 19 1
Vein 10 and vein 20
inferred 4,119 135.42 1.84 45 0.6 0.05 76 6,024 25 2
Mineral resources reported using NSR 2018 formula: copper times 61.676 plus silver times
0.354 plus zinc times 14.521 plus lead times 11.208. Metal price assumptions (in U.S.
dollars) used to calculate the NSR for all deposits are: Cu equals $3.50/pound, Ag equals
$18/ounce, Zn equals $1.20/pound and Pb equals $1/pound. An exchange rate of 18.50
Mexican pesos per $1 (U.S.) is assumed. The following metal recoveries are used: 90 per
cent Cu, 74 per cent Ag, 79 per cent Zn abnd 76 per cent Pb. Resources are reported above
$42 (U.S.)/t NSR cut-off. Totals may not sum exactly due to rounding.
MINERAL RESOURCE ESTIMATE BY CLASS FOR ALL COPPER ZONES AS AT MARCH 31, 2018, AT A $42 (U.S.) NSR COG*
Classification Tonnes Copper Silver Zinc Lead Copper metal Silver metal Zinc metal Lead metal
(kt) (%) (g/t) (%) (%) (kt) (koz) (kt) (kt)
Copper zone -- MNV San Roberto
Measured (M) 409 1.23 53 1.23 0.40 5 696 5 2
Indicated (I) 3,233 0.99 43 1.60 0.38 32 4,478 52 12
Total M+I 3,642 1.02 44 1.56 0.38 37 5,174 57 14
Inferred 4,534 0.63 36 1.49 0.14 29 5,178 68 6
MNFWZ
Measured (M) - - - - - - - - -
Indicated (I) 9,350 1.93 43 0.54 0.07 180 12,896 50 6
Total M+I 9,350 1.93 43 0.54 0.07 180 12,896 50 6
Inferred 5,354 1.59 44 1.03 0.41 85 7,584 55 22
Total -- copper zones
Measured (M) 409 1.23 53 1.23 0.40 5 696 5 2
Indicated (I) 12,583 1.69 43 0.81 0.15 212 17,374 102 18
Total M+I 12,992 1.67 43 0.83 0.16 217 18,070 107 20
Inferred 9,888 1.15 40 1.24 0.29 114 12,762 123 28
Mineral resources reported using NSR 2018 formula: copper times 61.676 plus silver times
0.354 plus zinc times 14.521 plus lead times 11.208. Metal price assumptions (in U.S.
dollars) used to calculate the NSR for all deposits are: Cu equals $3.50/pound, Ag equals
$18/ounce, Zn equals $1.20/pound and Pb equals $1/pound. An exchange rate of 18.50
Mexican pesos per $1 (U.S.) is assumed. The following metal recoveries are used: 90 per
cent Cu, 74 per cent Ag, 79 per cent Zn abnd 76 per cent Pb. Resources are reported above
$42 (U.S.)/t NSR cut-off. Totals may not sum exactly due to rounding.
The zinc mineral resources of the Mala Noche vein (MNV), updated with the NSR formula used for MNFWZ, are reported in the associated table. No additional drilling for zinc resources was performed in 2018.
MINERAL RESOURCE ESTIMATE BY CLASS FOR MNV ZINC ZONES AS AT MARCH 31, 2018, AT A $42 (U.S.) NSR COG*
Classification Tonnes Copper Silver Zinc Lead Copper metal Silver metal Zinc metal Lead metal
(kt) (%) (g/t) (%) (%) (kt) (koz) (kt) (kt)
Total -- MNV zinc zones (San Rafael and San Roberto zinc)
Measured (M) - - - - - - - - -
Indicated (I) 2,676 0.26 42 3.56 0.55 7 3,608 95 15
Total M+I 2,676 0.26 42 3.56 0.55 7 3,608 95 15
Inferred 4,681 0.20 32 3.06 0.33 9 4,817 143 15
Mineral resources reported using NSR 2018 formula: copper times 61.676 plus silver times
0.354 plus zinc times 14.521 plus lead times 11.208. Metal price assumptions (in U.S.
dollars) used to calculate the NSR for all deposits are: Cu equals $3.50/pound, Ag equals
$18/ounce, Zn equals $1.20/pound and Pb equals $1/pound. An exchange rate of 18.50
Mexican pesos per $1 (U.S.) is assumed. The following metal recoveries are used: 90 per
cent Cu, 74 per cent Ag, 79 per cent Zn abnd 76 per cent Pb. Resources are reported above
$42 (U.S.)/t NSR cut-off. Totals may not sum exactly due to rounding.
Mineral resources that are not mineral reserves do not have demonstrated economic viability. Mineral resource estimates do not account for minability, selectivity, mining loss and dilution. These mineral resource estimates include inferred mineral resources considered too speculative geologically to apply economic considerations for categorization as mineral reserves. Even though mining has been undertaken in areas of the MNFWZ with proven and probable class mineral reserves 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 reported herein was prepared by Garth Kirkham of Kirkham Geosystems Ltd. of Burnaby, B.C., Canada, an independent qualified person under Canadian Securities Administrators' National Instrument 43-101. The mineral resources presented herein have been estimated in conformity with generally accepted CIM (Canadian Institute of Mining, Metallurgy and Petroleum) Estimation of Mineral Resource and Mineral Reserves Best Practices guidelines and are reported in accordance with National Instrument 43-101. Mineral resources are not mineral reserves and do not have demonstrated economic viability. The estimate was completed using MineSight software using a three-dimensional block model (12 m by five m by 10 m block size with four m by 0.5 m by five m subblocks). The MNFWZ model comprises seven interpreted three-dimensional wireframes which were the primary estimation domain and hard boundaries were used to constrain the interpolation of grades into the block model. Interpolation parameters have been derived based on geostatistical analysis conducted on one m composited drill hole. Block grades have been estimated using ordinary kriging (OK) methodology and the mineral resources have been classified based on proximity to sample data and the continuity of mineralization in accordance with CIM Definition Standards and Estimation Best Practices. The MNFWZ resource has been estimated using a total of 833 diamond drill holes with 2,382 sample composites.
About Capstone Mining Corp.
Capstone is a Canadian base metals mining company, focused on copper. It is committed to the responsible development of its assets and the environments in which it operates. Its three producing mines are the Pinto Valley copper mine located in Arizona in the United States, the Cozamin polymetallic mine in Zacatecas state, Mexico, and the Minto copper mine in Yukon, Canada.
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 Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators and supervised and reviewed by Brad Mercer, PGeol, Capstone's senior vice-president, exploration, a qualified person as defined in National Instrument 43-101 and the person who oversees exploration activities on the Cozamin mine property. In addition, Gregg Bush, Capstone's senior vice-president and chief operating officer, reviewed and approved this news release.
Analyses for copper, zinc, lead and silver were completed by ALS Minerals laboratory using the following method. The entire sample is crushed to a minimum of 70 per cent passing a two-millimetre screen. A 250-gram subsample of the crushed material is then pulverized to 85 per cent passing 75 microns. Copper, zinc, lead and silver are determined by ICP (inductively coupled plasma) analysis after four-acid digestion of a 0.25 g subsample of the pulverized material. Cozamin mine laboratory analyzed 7.5 per cent of the samples since 2012. The entire sample was crushed to a minimum of 80 per cent passing 9.5 mm. A 200 g subsample is then pulverized to 100 per cent passing 74 microns. Copper, zinc, lead and silver are determined by ICP analysis after three-acid digestion of a 0.2 g subsample of pulverized material. Blank, standard and duplicate samples are used for quality assurance and quality control at both laboratories.
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