Vancouver - Capitan Mining Inc. (TSXV: CAPT) ('Capitan' or the 'Company') is pleased to report results for six reverse-circulation (RC) drill holes from the Capitan Hill oxide-gold deposit, at its 100%-owned Penoles project in Durango, Mexico.

In addition, management is also pleased to report that after several months of negotiation they have entered into a purchase agreement to acquire a portfolio of royalties including a 2% royalty on the Capitan Gold oxide deposit from Exploraciones Altiplano.

Highlights

Drillhole CARC 21-48: returned 35.1m of 0.42 g/t Aueq including 4.6m of 1.1 g/t Aueq

Extends mineralization 170m down-dip from hole 21-CARC-25 on cross section -100

Royalty Buyback: Total purchase price of royalty portfolio is US $1.0M over two years, payable in cash and shares

The Altiplano royalty portfolio included a 2% net smelter royalty (NSR) on the Capitan Hill oxide-gold deposit

Any shares issued to Altiplano are subject to right of first refusal (ROFR) allowing Capitan to market and place shares with investors if Altiplano elects to sell

This transaction with Altiplano in combination with Capitan's contractual option to retire Riverside Resources 1% royalty for C$250,000 will leave the Penoles project royalty free and will enhance overall project economics for investors

Drilling to resume in late January following holiday break

Assays for 11 drill holes are pending

Royalty Purchase Agreement

Capitan Mining has entered into a purchase agreement to acquire all outstanding net smelter royalties (NSR's) on mining claims in the Penoles project from Exploraciones del Altiplano, a private Mexican exploration company. The royalties covered a number of targets including the current gold-silver resource areas of Capitan and Jesus Maria. This included a 2% NSR on the Capitan Hill claims, 0.75% on claims covering the Jesus Maria, San Rafael, Pinchazo and Capitan 2 targets and 0.5% on third-party claims surrounding these targets. The total consideration for the transaction is US$1.0M, which will be paid 50% in cash and 50% in Capitan shares over a staged 2-year payment schedule. Capitan will also retain a right of first refusal (ROFR) on any shares distributed to Altiplano as consideration for the royalty purchase; allowing the company the opportunity to place Altiplano's shares, upon written notice from Altiplano of their intentions to sell.

In addition to the royalties held by Altiplano, the Penoles project has a 1% royalty owned by Riverside Resources which was created as part of the asset spinout in 2020. Capitan has the contractual option to purchase and retire the Riverside royalty for C$250,000 at any time.

Capitan's CEO, Alberto Orozco, stated: 'We are very happy to have completed the purchase of the Penoles project royalty portfolio from Exploraciones Altiplano. This agreement paves the way for the project to be royalty-free and will benefit all shareholders going forward, as we evaluate the economics of the Capitan Hill oxide-gold deposit.'

Exploration update: Capitan Hill Oxide-Gold Deposit

The results for the final 6 holes of the 2021 Phase 2 drill program at the Capitan Hill oxide-gold deposit are presented below. These drillholes consisted of both step-out drill holes located in the central and southeastern portion of the deposit as well as one infill hole located in the western portion of the deposit.

Central and Southeast Step-out Holes

Holes 21-CARC-44, 46, 47, 48 and 49 tested the down-dip extension of the Capitan zone in the central and southeast portion of the deposit, to extend both the Capitan main and Hanging wall zones to the south.

Hole-21-CARC 48, was a 170m step-out on section -100, and was successful in extending mineralization on that respective section. The hole returned several, narrow, low-grade intervals over the first 200m of the hole, similar to adjacent holes that are on-strike and up-dip. Of particular significance, the hole returned the highest-grade interval to date in the southeastern portion of the Capitan deposit returning 35.1m of 0.42 g/t Aueq, including 4.6m of 1.1g/t Aueq. This interval occurred just before the hole terminated and is the deepest intersection of higher-grade mineralization to date at Capitan Hill. This intersection also supports the hypothesis that the holes above, may not have been drilled deep enough (zone was displaced to depth), given the position of mineralized interval in hole 21-CARC-48.

Holes 21-CARC-44, 46, 47, and 49 were large step-out holes located on sections 100, -250, 200, and 000 respectively. These step-out holes were drilled between 75 and 175m down-dip from the previous holes on their respective sections. In general, these holes returned relatively narrow, low-grade intercepts that did not correlate well with mineralization returned in previous drilling located up-dip. Given that the holes above were all drilled in the same vicinity as one another, it is interpreted that there may be some displacement of the main zone down-dip, possibly related to the Santa Theresa fault, which the holes crossed before they reached their target depth. Of note: the above holes were terminated due to the depth capacity of the rig, and ground conditions.

Strategic Infill

Hole 21-CARC-45 is located on section 350 and was designed to twin a historic diamond drill hole that was not sampled adequately. The hole intersected both the Hanging Wall and Capitan Main zone and returned width and grades typical of the mineralization in that area. In total, 74.7m of gold mineralization was encountered at the Capitan Main Zone in two separate intervals, with the best interval returning 44.2m at 0.28 g/t Aueq.

Summary of Phase 2 Program

The 2021 Phase 2 drill program was focused on testing and expanding the continuity of oxide gold mineralization at the Capitan Hill deposit, to better define the boundaries of both the Capitan Main Zone, and the more poorly defined Hanging Wall Zone.

Step-out drilling during the 2021 Phase 2 program, has significantly expanded the footprint of both the Hanging Wall and Capitan Main zone compared to the 2020 envelope. Additionally, infill drilling has helped to define higher-grade shoots within the lower grade envelope in the central and western portions of the deposit.

The Phase 2 program totals include 6,036m of drilling completed in 21 RC drillholes, bringing the total amount of drilling by Capitan to 12,208m. Drilling continues at Capitan's Penoles project and management will provide guidance in a separate press release in the coming week.

About Capitan Mining Inc.

Capitan Mining is a well-funded junior exploration company focused on its 100% owned gold and silver Penoles Project in Durango, Mexico. The company is led by a management team that has successfully advanced and developed several heap leach operations in Mexico over the past 16 years.

Contact:

Alberto Orozco

Tel: (778) 327-6671

Fax: (778) 327-6675

Email: info@capitanmining.com

Web: www.capitanmining.com

Certain statements in this press release may be considered forward-looking information. These statements can be identified by the use of forward-looking terminology (e.g., 'expect',' estimates', 'intends', 'anticipates', 'believes', 'plans'). Such information involves known and unknown risks-including the availability of funds, the results of financing and exploration activities, the interpretation of exploration results and other geological data, or unanticipated costs and expenses and other risks identified by Capitan in its public securities filings that may cause actual events to differ materially from current expectations. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release.

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