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    CS   CA14068G1046

CAPSTONE MINING CORP.

(CS)
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Capstone Mining : Generated Record Operating Cash Flow of $110 Million in Q2 2021, Net Cash Grows to $172 Million with Zero Drawn Long-Term Debt

07/28/2021 | 10:35am EDT

VANCOUVER - Capstone Mining Corp. ('Capstone' or the 'Company') (TSX: CS) today announced production and financial results for the three ('Q2 2021') and six months ended June 30, 2021.

Copper production totaled 43.3 million pounds at consolidated C1 cash costs1 of $1.91 per payable pound of copper produced. Link HERE for Capstone's Q2 2021 management's discussion and analysis ('MD&A') and financial statements and HERE for the webcast presentation.

Darren Pylot, President and CEO of Capstone commented, 'This was a strong quarter with record copper production at Cozamin and completion of the majority of phase 2 PV3 Optimization work at Pinto Valley'. Mr. Pylot added, 'We also published our 2020 Sustainability Report, which details our ESG-related programs and reaffirms our long-standing commitment to responsible mining practices.'

Raman Randhawa, SVP & CFO added, 'Capstone has generated $205 million of operating cash flow2, so far in 2021 and with that, our net cash balance has increased to $172 million, plus we have an undrawn corporate revolver of $225 million. Cashing up at the forefront of our transformational growth phase will allow Capstone to execute on Santo Domingo and many other robust, high-impact projects'.

ABOUT CAPSTONE MINING CORP.

Capstone Mining Corp. is a Canadian base metals mining company, focused on copper. We are committed to the responsible development of our assets and the environments in which we operate. Our two producing mines are the Pinto Valley copper mine located in Arizona, US and the Cozamin copper-silver mine in Zacatecas State, Mexico. In addition, Capstone owns 100% of Santo Domingo, a large scale, fully permitted, copper-iron-gold project in Region III, Chile, as well as a portfolio of exploration properties. Capstone's strategy is to focus on the optimization of operations and assets in politically stable, mining-friendly regions, centred in the Americas. Our headquarters are in Vancouver, Canada and we are listed on the Toronto Stock Exchange (TSX) under the symbol CS.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION

This document may contain 'forward-looking information' within the meaning of Canadian securities legislation and 'forward-looking statements' within the meaning of the United States Private Securities Litigation Reform Act of 1995 (collectively, 'forward-looking statements'). These forward-looking statements are made as of the date of this document and the Company does not intend, and does not assume any obligation, to update these forward-looking statements, except as required under applicable securities legislation.

Forward-looking statements relate to future events or future performance and reflect our expectations or beliefs regarding future events and the impacts of the ongoing and evolving COVID-19 pandemic. Forward-looking statements include, but are not limited to, statements with respect to the estimation of Mineral Resources and Mineral Reserves, the expected timing, operations and success of the underground paste backfill system study and tailings filtration project at Cozamin, the success of the Pinto Valley HydroFloat project, the outcome and timing of the PV4 study, the timing and success of our use of the Jetti Technology, the successful completion of a port agreement with Puerto Ventanas and/or rail agreement with Sigdo Kopper's rail business, the success of our strategic process for the Santo Domingo project, the expected reduction in capital requirements for the Santo Domingo Project, the timing and success of the Cobalt Study for Santo Domingo, the timing and success of the PV3 Optimization project, the realization of Mineral Reserve estimates, the timing and amount of estimated future production, costs of production and capital expenditures and reclamation, the success of our mining operations, the success of mineral exploration, the estimations for potential quantities and grade of inferred resources and exploration targets, Capstone's ability to fund future exploration activities, Capstone's ability to finance the Santo Domingo project, environmental risks, unanticipated reclamation expenses and title disputes. The potential effects of the COVID-19 pandemic on our business and operations are unknown at this time, including Capstone's ability to manage challenges and restrictions arising from COVID-19 in the communities in which Capstone operates and our ability to continue to safely operate and to safely return our business to normal operations. The impact of COVID-19 to Capstone is dependent on a number of factors outside of our control and knowledge, including the effectiveness of the measures taken by public health and governmental authorities to combat the spread of the disease, global economic uncertainties and outlook due to the disease, and the evolving restrictions relating to mining activities and to travel in certain jurisdictions in which we operate.

In certain cases, forward-looking statements can be identified by the use of words such as 'anticipates', 'approximately', 'believes', 'budget', 'estimates', expects', 'forecasts', 'guidance', intends', 'plans', 'scheduled', 'target', or variations of such words and phrases, or statements that certain actions, events or results 'be achieved', 'could', 'may', 'might', 'occur', 'should', 'will be taken' or 'would' or the negative of these terms or comparable terminology. In this document certain forward-looking statements are identified by words including 'anticipated', 'expected', 'guidance' and 'plan'. By their very nature, forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, amongst others, risks related to inherent hazards associated with mining operations and closure of mining projects, future prices of copper and other metals, compliance with financial covenants, surety bonding, our ability to raise capital, Capstone's ability to acquire properties for growth, counterparty risks associated with sales of our metals, use of financial derivative instruments and associated counterparty risks, foreign currency exchange rate fluctuations, market access restrictions or tariffs, changes in general economic conditions, availability of water, accuracy of Mineral Resource and Mineral Reserve estimates, operating in foreign jurisdictions with risk of changes to governmental regulation, compliance with governmental regulations, compliance with environmental laws and regulations, reliance on approvals, licenses and permits from governmental authorities and potential legal challenges to permit applications, contractual risks including but not limited to, our ability to meet the completion test requirements under the Cozamin Silver Stream Agreement with Wheaton Precious metals, our ability to meet certain closing conditions under the Santo Domingo Gold Stream Agreement with Wheaton Precious Metals, acting as Indemnitor for Minto Exploration Ltd.'s surety bond obligations post divestiture, impact of climate change and changes to climatic conditions at our Pinto Valley and Cozamin operations and Santo Domingo project, changes in regulatory requirements and policy related to climate change and GHG emissions, land reclamation and mine closure obligations, risks relating to widespread epidemics or pandemic outbreak including the COVID-19 pandemic; the impact of COVID-19 on our workforce, suppliers and other essential resources and what effect those impacts, if they occur, would have on our business, including our ability to access goods and supplies, the ability to transport our products and impacts on employee productivity, the risks in connection with the operations, cash flow and results of Capstone relating to the unknown duration and impact of the COVID-19 pandemic, uncertainties and risks related to the potential development of the Santo Domingo Project, increased operating and capital costs, increased cost of reclamation, challenges to title to our mineral properties, increased taxes in jurisdictions the Company operates or is subject to tax, changes in tax regimes we are subject to and any changes in law or interpretation of law may be difficult to react to in an efficient manner, maintaining ongoing social license to operate, dependence on key management personnel, potential conflicts of interest involving our directors and officers, corruption and bribery, limitations inherent in our insurance coverage, labour relations, increasing energy prices, competition in the mining industry including but not limited to competition for skilled labour, risks associated with joint venture partners, our ability to integrate new acquisitions and new technology into our operations, cybersecurity threats, legal proceedings, the volatility of the price of the Common Shares, the uncertainty of maintaining a liquid trading market for the Common Shares, risks related to dilution to existing shareholders if stock options or other convertible securities are exercised, the history of Capstone with respect to not paying dividends and anticipation of not paying dividends in the foreseeable future, and sales of Common Shares by existing shareholders can reduce trading prices, and other risks of the mining industry as well as those factors detailed from time to time in the Company's interim and annual financial statements and MD&A of those statements and Annual Information Form, all of which are filed and available for review under the Company's profile on SEDAR at www.sedar.com. Although the Company has attempted to identify important factors that could cause our actual results, performance or achievements to differ materially from those described in our forward-looking statements, there may be other factors that cause our results, performance or achievements not to be as anticipated, estimated or intended. There can be no assurance that our forward-looking statements will prove to be accurate, as our actual results, performance or achievements could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on our forward-looking statements.

CAUTIONARY NOTE TO UNITED STATES INVESTORS REGARDING PRESENTATION OF MINERAL RESERVE AND MINERAL RESOURCE ESTIMATES

As a British Columbia corporation and a 'reporting issuer' under Canadian securities laws, we are required to provide disclosure regarding our mineral properties in accordance with Canadian National Instrument 43-101 - Standards of Disclosure for Mineral Projects ('NI 43-101'). NI 43-101 is a rule developed by the Canadian Securities Administrators that establishes standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects. In accordance with NI 43-101, we use the terms mineral reserves and resources as they are defined in accordance with the CIM Definition Standards on mineral reserves and resources (the 'CIM Definition Standards') adopted by the Canadian Institute of Mining, Metallurgy and Petroleum. In particular, the terms 'mineral reserve', 'proven mineral reserve', 'probable mineral reserve', 'mineral resource', 'measured mineral resource', 'indicated mineral resource' and 'inferred mineral resource' used in this news release and the documents incorporated by reference herein and therein, are Canadian mining terms defined in accordance with CIM Definition Standards. These definitions differ from the definitions in the disclosure requirements promulgated by the SEC. Accordingly, information contained in this news release and the documents incorporated by reference herein may not be comparable to similar information made public by U.S. companies reporting pursuant to SEC disclosure requirements.

United States investors are also cautioned that while the SEC will now recognize 'measured mineral resources', 'indicated mineral resources' and 'inferred mineral resources', investors should not assume that any part or all of the mineralization in these categories will ever be converted into a higher category of mineral resources or into mineral reserves. Mineralization described using these terms has a greater amount of uncertainty as to their existence and feasibility than mineralization that has been characterized as reserves. Accordingly, investors are cautioned not to assume that any 'measured mineral resources', 'indicated mineral resources', or 'inferred mineral resources' that we report are or will be economically or legally mineable. Further, 'inferred resources' have a greater amount of uncertainty as to their existence and as to whether they can be mined legally or economically. Therefore, United States investors are also cautioned not to assume that all or any part of the inferred resources exist. In accordance with Canadian rules, estimates of 'inferred mineral resources' cannot form the basis of feasibility or other economic studies, except in limited circumstances where permitted under NI 43-101.

Contact:

Jerrold Annett

Tel: 647-273-7351

Email: jannett@capstonemining.com

(C) 2021 Electronic News Publishing, source ENP Newswire

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Financials (USD)
Sales 2021 777 M - -
Net income 2021 229 M - -
Net cash 2021 249 M - -
P/E ratio 2021 7,42x
Yield 2021 -
Capitalization 1 747 M 1 752 M -
EV / Sales 2021 1,93x
EV / Sales 2022 1,78x
Nbr of Employees 1 049
Free-Float 64,9%
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Number of Analysts 10
Last Close Price 4,23 $
Average target price 5,71 $
Spread / Average Target 35,2%
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Managers and Directors
Darren Murvin Pylot President, Chief Executive Officer & Director
Raman Randhawa Chief Financial Officer & Senior Vice President
George Leslie Brack Non-Executive Chairman
Brad J. Mercer Chief Operating Officer & Senior Vice President
Dale Canfield Peniuk Independent Director
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