Pre-Feasibility Study Results For Santo Domingo Project  

VANCOUVER - Capstone Mining Corp. reported results of the Pre-feasibility Study ("PFS") for its Santo Domingo Iron Oxide-Copper-Gold project in Region III, Chile. The Project is owned 70% by Capstone and 30% by Korea Resources Corporation.

"The positive Santo Domingo PFS has met our economic expectations," said Darren Pylot, President and CEO. "With the buoyancy in the copper market and strong demand for the by-product iron production, we intend to advance this Project towards production. With our $507 million cash balance at June 30, 2011, and the commitment by KORES to arrange debt financing for 65% of the capital costs of the Project, we have the means to move forward rapidly."

The PFS builds on the Preliminary Assessment completed in 2008. The mineral resource has been increased from 240 to 486 million tonnes, the metallurgical performance, using seawater for copper and iron recovery, has been proven, and a large data set to support grinding characteristics/throughput estimates has been gathered.

The Santo Domingo Project will be an open pit operation, using conventional drilling, blasting, loading with diesel hydraulic shovels, and truck haulage. The process plant will have an annual average throughput of 63,500 tonnes per day using SAG and ball milling, with conventional flotation utilizing seawater to produce a copper concentrate. Magnetite iron will be recovered from the copper rougher tailings using Low Intensity Magnetic Separation (LIMS).  A pipeline will bring seawater from the coast, approximately 74 kilometres from the project, and both copper and iron concentrate will be transported to the coast in a slurry pipeline for export. The company's address is Suite 900, 999 West Hastings Street, Vancouver, BC V6C 2W2, 604.684.8894, fax: 604.688.2180, email: [email protected].