Capstone Acquires Pinto Valley Mining Operations

VANCOUVER, BC - Capstone Mining Corp. has completed the previously announced acquisition of the Pinto Valley copper mine and the associated San Manuel Arizona Railroad Company from BHP Copper Inc., a subsidiary of BHP Billiton Ltd.

"The closing of the Pinto Valley acquisition advances us as one of the leading intermediate copper producers, with a focus in the Americas," said Darren Pylot, President and CEO of Capstone. "Following the closing of the transaction, we have retained considerable financial flexibility with a very conservative capital structure."

The purchase price of US$650 million was funded from cash and Capstone's credit facilities.

The restart of the Pinto Valley Mine, which commenced in December 2012, is continuing with a targeted run-rate of 50,800 tones per day by the end of 2013 with annualized production of 130 million to 150 million pounds of copper per year.

Capstone will commence reporting full operating and production information for Pinto Valley with its fourth quarter report.

An experienced workforce remains in place, with 98% of Pinto Valley's 650 employees accepting Capstone's offer of employment, including all key positions. Steve Winkelmann, formerly Capstone's VP of North American Operations, has been appointed Pinto Valley's Mine General Manager and has been on site shadowing his BHP Billiton counterpart since early September. Steve has 40 years of mining experience including large mining operations, primarily in the US and most recently in Arizona.

The Capstone Pinto Valley team will initially focus on continuing to ramp up production levels and the integration of the operations to achieve our targets. At the same time leadership will identify opportunities for cost reduction, reliability enhancement and throughput maximization.

Capstone believes that considerable potential exists to upgrade the existing 968 million tones of Measured and Indicated ("M&I") Mineral Resources (grading 0.35% copper at a 0.25% cut-off grade) into reserves, potentially extending the operation beyond the current reserve life as reported by BHP Billiton. A Preliminary Feasibility Study ("PFS") is underway that will target the M&I Mineral Resources for potential conversion to reserves, with expected completion in late 2013 or early 2014. The PFS will consider the potential to extend operations within the currently permitted boundaries. In addition, Capstone plans to commission engineering and economic studies to consider all remaining current mineral resources and their potential for development.