Mr. John MacKenzie reports

CAPSTONE COPPER REPORTS FIRST QUARTER 2022 RESULTS AND PROVIDES CONSOLIDATED PRODUCTION AND COST GUIDANCE FOR THE REMAINDER OF 2022

Capstone Copper Corp. has released its production and financial results for the quarter ended March 31, 2022 (Q1 2022), and has provided production and cost guidance for the remainder of 2022. Quarterly consolidated copper production totalled 22,500 tonnes at C1 cash costs of $2.31 per payable pound of copper produced.

"It is with great pleasure that I report the inaugural first quarter's results of the new Capstone Copper, and I would particularly like to take this opportunity to thank everybody in our organization for their tremendous support as we integrate our business. Despite inflationary pressures facing the entire mining industry, Capstone delivered strong financial results, highlighted by adjusted EBITDA of $123-million that included only a nine-day contribution from our Mantoverde and Mantos Blancos mines since the combination took effect on March 23, 2022," said John MacKenzie, chief executive officer. "This is a transformational year for Capstone as we ramp up our new Mantos Blancos mill, construct the Mantoverde sulphides project and deliver a district integration plan for Santo Domingo with Mantoverde. These are critical steps toward achieving over 40-per-cent copper production growth by 2024 and a further 45 per cent when Santo Domingo goes into production. In the context of the current macro environment we have critically evaluated our business to provide guidance for the remaining nine months of 2022, and expect to produce 136,000 to 150,000 tonnes of copper at C1 cash costs of $2.55 to $2.70 per pound."

Q1 2022 operational and financial highlights

• The transaction to combine with Mantos to create Capstone Copper Corp. was completed on March 23, 2022. The transaction establishes Capstone Copper as a premier copper producer with a diversified portfolio of high-quality, long-life operating assets focused in the Americas with an extensive pipeline of near-term fully permitted organic growth opportunities.
• Net income of $35.1-million, or eight cents per share. Adjusted net income of $61.1-million or 14 cents per share for Q1 2022, with the main reconciling item for Q1 2022 being $19.9-million of transaction and integration costs related to the transaction. Operating results include nine days of earnings from operations of the Mantos Blancos and Mantoverde mines.
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $123.4-million compared with $118.7-million in Q1 2021.
• Operating cash flow before changes in working capital of $70.4-million in Q1 2022 compared with $245.0-million in Q1 2021, which includes a $150-million precious metal stream deposit. The variance is related to increased operating cash flow of $21.5-million on copper sales and prices offset by transaction costs of $19.9-million and $22.9-million higher annual tax payment in Mexico related to 2021 income.
• The company is in a net cash position of $64.9-million and total available liquidity is $638.1-million. The balance sheet was further expanded with the acquisition of cash and debt on the transaction. The net cash position of $64.9-million as at March 31, 2022, consists of cash and short-term investments of $413.1-million netted against long-term debt of $348.2-million.
• Consolidated copper production of 22,500 tonnes at C1 cash costs of $2.31/pound of copper produced for Q1 2022 which consisted of 14,400 tonnes at Pinto Valley, 5,900 tonnes at Cozamin and the balance for the Chilean mines for the nine-day stub period. Mantos Blancos and Mantoverde contributed an additional 14 cents per pound to the consolidated C1 cash costs; excluding the stub period reporting, Capstone Copper's consolidated C1 cash costs were $2.17 per pound.
• Mantos Blancos Concentrator Debottlenecking project (MB-CDP) ramp up to 20,000 tonnes per day (tpd) is progressing well. Throughput averaged over 18,000 tpd during the last week of April. The focus is on ramping up to name plate capacity, optimization and achieving targeted recoveries in Q3 2022.
• Mantoverde development project (MVDP) construction is progressing well with earthworks mostly completed and major construction commenced in late-March, 2022. Numerous marine cargo shipments of major plant equipment are now en route to site. The total project capital budget is now estimated to be $825-million compared with previously $787-million. The increase relates to diesel prices impacting prestripping costs by $23-million plus additional contingency of $15-million. The majority of the capital costs are fixed due to the nature of the lump sum turn-key contract with Ausenco of $525-million and the purchase of major mining equipment was price fixed prior to the current inflationary environment for approximately $140-million.
• The Mantoverde-Santo Domingo district integration plan will outline the approach Capstone Copper is taking to maximize value creation (including synergies) across the district. The integration plan will outline the optimized flowsheet to create a world-class district which is targeted for early Q4 2022 ahead of the Chile analyst tour and investor day during the week of Nov. 14. The company expects the integration plan to contribute to the feasibility studies for Santo Domingo (H1 2023), Mantoverde phase II (H2 2023), and Mantoverde and Santo Domingo cobalt and oxides (H2 2023).
• Financial flexibility enhanced with amendment of revolving credit facility (RCF) to $500-million plus $100-million accordion. Subsequent to quarter-end, the RCF was amended and will become available after all the security is in place and other customary conditions are met, which is expected to occur before July, 2022.

Mantos and Capstone Mining transaction

On Nov. 30, 2021, Capstone Mining announced it had entered into a definitive agreement with Mantos to combine, pursuant to a plan of arrangement.

The transaction was completed on March 23, 2022, and the combined company was renamed Capstone Copper. Capstone Copper is headquartered in Vancouver, B.C., and listed on the Toronto Stock Exchange. Pursuant to the agreement, each Capstone Mining shareholder received one newly issued Capstone Copper share per Capstone Mining share and the existing Mantos shareholders maintained their Capstone Copper shares. At completion of the transaction, former Capstone Mining and Mantos shareholders collectively owned approximately 60.75 per cent and 39.25 per cent of Capstone Copper, respectively, on a fully diluted basis. Refer to the business combination note in the condensed interim consolidated financial statements.

Following completion of the transaction, Capstone Copper operates four mines, including two mines run by Mantos Copper in Chile since 2015: the Mantos Blancos (100-per-cent owned) open pit copper mine is located 45 kilometres northeast of Antofagasta in the Antofagasta region and produces copper concentrate and copper cathodes. The Mantoverde (70-per-cent owned) open pit mine is located 50 kilometres southeast of Chanaral, in the region of Atacama and produces copper cathodes. Mantoverde is the site of the MVDP sulphide expansion, currently in construction.

The new Capstone Copper has a broad portfolio of (largely permitted) brownfield projects located at the company's sites that facilitate disciplined capital allocation and a phased approach to growth.

Consolidated

Q1 2022 consolidated production of 22,500 tonnes of copper is higher than the 21,700 tonnes in Q1 2021 and primarily relates to addition of nine-day production at the Mantos Blancos and Mantoverde mines.

The main driver for the 61 cents/lb increase in C1 cash costs in Q1 2022, compared with Q1 2021, is higher unit costs at Pinto Valley plus the inclusion of the Mantos Blancos and Mantoverde mines which impacted consolidated C1 cash costs by 14 cents/lb. Prior to the inclusion of the Mantos Blancos and Mantoverde results for the stub period, the Capstone Mining results would have been $2.17/lb. C1 cash costs increased from $1.70 to $2.17/lb due to 12 cents/lb on lower production of 1,400 tonnes, nine cents/lb due to higher TCRC's, five cents due to lower byproduct revenue and stockpile drawdown, and the balance of 20 cents/lb due to inflationary pressures.

Capital and exploration guidance

The company's capital and exploration guidance is as shown in the attached table.

Financial overview

Please refer to Capstone's Q1 2022 MD&A (management's discussion and analysis) and financial statements for detailed financial results.

Conference call and webcast details

Capstone will host a conference call and webcast on Friday, May 13, 2022, at 08 a.m. PT/11 a.m. ET.

Dial-in numbers for the audio-only portion of the conference call are included herein. Due to an increase in call volume, please dial in at least five minutes prior to the call to ensure placement into the conference line on time.

Toronto:   1-416-764-8650

Vancouver:  1-778-383-7413

North America toll-free:  888-664-6383

Confirmation No.:  51309954

A replay of the conference call will be available until May 20, 2022. Dial-in numbers for Toronto: 1-416-764-8677 and North American toll-free: 888-390-0541. The replay code is 309954 followed by the pound key. Following the replay, an audio file will be available on Capstone's website.

This release is not suitable on a stand-alone basis for readers unfamiliar with Capstone and should be read in conjunction with the company's MD&A and financial statements for the three months ended March 31, 2022, which are available on Capstone's website and on SEDAR, all of which have been reviewed and approved by Capstone's board of directors.

We seek Safe Harbor.