Mr. Darren Pylot reports

CAPSTONE PROVIDES UPDATE ON COVID-19; NO IMPACT TO OPERATIONS TO DATE

Capstone Mining Corp. has taken a strong stance with regard to the coronavirus (COVID-19) and is following the requirements and advice of government authorities and the World Health Organization. Capstone's priority is to ensure the health and safety of its people and the communities in which it operates. The company has a dedicated response team in place and is assessing any potential health and business impacts across all its operations. In addition, due to current copper prices, the company has updated its 2020 guidance on discretionary capital and exploration expenditures, reducing the total by $32-million.

To date, COVID-19 has not impacted production or concentrate shipments at Pinto Valley or Cozamin, nor has there been any significant impact on, or disruption of, the company's supply chain.

2020 capital and exploration expenditure guidance update

Due to the recent drop in copper prices, Capstone has taken prudent financial measures to defer discretionary capital and exploration expenditures of $32-million in 2020, as shown in the attached table. Importantly, the company does not expect this will impact production and operating cost guidance for 2020, nor will it materially impact its growth plans for 2021 and beyond. The first of two secondary crushers and screen decks have arrived at Pinto Valley and are now scheduled to be installed in July. The Cozamin one-way ramp project, expected to result in 50-per-cent production growth of copper and silver in 2021, remains on schedule.

                                   2020 EXPENDITURE GUIDANCE

                                            Original guidance                 Revised guidance
Pinto Valley                                                                                                 
Sustaining                                                $28                              $18               
Capitalized stripping                                      $8                               $3               
Expansionary                                              $19                              $12               
Total Pinto Valley capital                                $55                              $33               
Cozamin                                                   $26                              $24               
Santo Domingo                                              $9 (1)                           $6 (2)               
Total capital                                             $90                              $63               
Total exploration                                         $10                               $5               

1. On a 100-per-cent basis, the figure is $12-million; ownership is 70 per cent Capstone and 
   30 per cent Korea Resources Corp.

2. On a 100-per-cent basis, the figure is $9-million; ownership is 70 per cent Capstone and 
   30 per cent Korea Resources Corp.

In terms of operating costs, the recent drop in oil prices and the depreciation of the Mexican peso will be material on an annualized basis. Diesel costs are currently about 40 per cent lower than budget at Pinto Valley at spot prices, which could translate to about $8-million in annual savings, while the current Mexican peso would yield about $8-million in lower costs at Cozamin. Other input costs at both operations, like grinding media, mill liners and reagents, are also expected to track lower than budget.

"Capstone is in a solid position to weather the storm presented by the COVID-19 crisis. Over the past two years, we have cut nearly $30-million of costs from our business and our debt is manageable," said Darren Pylot, president and chief executive officer. "We have the flexibility to defer over $30-million of capital and exploration expenditures without impacting our future company-wide growth of 20 per cent higher production and 10 per cent lower costs by 2021, while preserving the optionality of our fully permitted Santo Domingo project in Chile.

"Above all, the health and safety of our employees and the communities in which we operate is our principal focus, as well as focusing on the health and long-term sustainability of our exceptional copper business," added Mr. Pylot.

The company has focused its actions within four key principles aimed at supporting the health of its employees and the health of its business:

• Prevent the workplace from becoming a vector for the COVID-19 virus to spread;
• Support employees who are ill or who are tending to family members affected by COVID-19;
• Enable full value chain capacity by enlisting the support of vendors and employees;
• Stop all non-essential spending and focus on cash today without jeopardizing future growth.

Capstone has implemented rigorous control and prevention measures in order to ensure the health of its workers. Following are some examples:

• Those who do not need to be on site to support copper production are working from home.
• On-site clinic staff are using a thermal scanner to assess the body temperature of everyone coming to the company's sites, as a way to be more accurate in the company's monitoring of flu-like symptoms. Anyone displaying flu-like symptoms or having an elevated temperature is sent home. The company will follow CDC guidelines as they evolve for personnel who have elevated risk.
• Medical checks for any employee who has been absent from work due to displaying flu-like symptoms or because of a self-initiated request for sick leave.
• All visits to any of the company's mine sites are cancelled. Only direct employees and preapproved contractors have permission to access the company's operations.
• Janitorial services have expanded to focus on common areas and at the company's operations, sanitation duties have been incorporated into routine safety checks prior to each shift commencing. Sanitizing supplies are provided to mobile equipment operators so they can perform a full wipe down of the cab environment at the beginning of each shift.
• At the operations, the company has implemented an outdoor crew lineout process to allow for maximum space between people.
• Strong focus on education for social distancing outside of the workplace, to keep employees, their families and communities safe.

About Capstone Mining Corp.

Capstone Mining is a Canadian base metals mining company, focused on copper. Its two producing mines are the Pinto Valley copper mine located in Arizona, United States, and the Cozamin copper-silver mine in Zacatecas state, Mexico. In addition, Capstone has the large-scale 70-per-cent-owned copper-iron Santo Domingo development project in Region III, Chile, in partnership with Korea Resources Corp., as well as a portfolio of exploration properties.

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