Capstone Reports Strong Production & Cash Operating Costs for the First Half of 2009

    49.2 million pounds of Copper in Concentrates with an Estimated Total
    Cash Cost(1) of US$0.93 per pound of payable copper

    VANCOUVER, July 15 /CNW/ - Capstone Mining Corp. (CS: TSX) today
announced its operating results for the three and six months ended June 30,
2009, with strong production and operating costs from its two operations, the
Cozamin and Minto mines. Combined production totalled 23.1 and 49.2 million
pounds of copper in concentrates in the second quarter and first six months,
respectively, with additional significant by-products of lead, zinc, silver
and gold. The total cash costs(1), net of estimated by-product credits and
selling costs, were US$0.97 and US$0.93 per pound of payable copper produced,
respectively.
    "Capstone's two operations, the Cozamin and Minto mines, turned in
another strong quarter, bringing first half production to 49.2 million pounds
of copper in concentrates at a total cash cost of just US$0.93 per pound of
payable copper," said Stephen Quin, President & COO of Capstone Mining Corp.
"These results are a reflection of the quality of our operating teams and our
assets."

    -------------------------------------------------------------------------
                                              Q1 2009    Q2 2009    YTD 2009
    -------------------------------------------------------------------------
    Copper in concentrates
    (millions of pounds)
    -------------------------------------------------------------------------
      - Cozamin                                    9.8        9.9       19.7
    -------------------------------------------------------------------------
      - Minto                                     16.3       13.2       29.5
    -------------------------------------------------------------------------
    Total                                         26.1       23.1       49.2
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Total Cash Costs(1)
    (US$/lb)
    -------------------------------------------------------------------------
      - Cozamin                                  $1.00      $0.81      $0.90
    -------------------------------------------------------------------------
      - Minto((*))                               $0.86      $1.08      $0.96
    -------------------------------------------------------------------------
    Average                                      $0.91      $0.97      $0.93
    -------------------------------------------------------------------------
    ((*))  Minto's operating costs are adjusted to exclude mining of ore and
           waste not related to concentrate produced in the period, these
           costs are capitalized or inventoried in the financial statements,
           then expensed when the associated ore is processed.

    Operational Highlights for the three and six months ended June 30, 2009

    The following is a summary of operational highlights for Capstone during
the second quarter and six months, respectively, ended June 30, 2009:

    -   Production of 23.1 and 49.2 million pounds of contained copper,
        respectively, which is within previously reported guidance of
        95-105 million pounds of copper in concentrates for 2009.

    -   By-product production of 3.3 and 5.7 million pounds of zinc, 2.3 and
        3.5 million pounds of lead and 455,566 and 875,520 ounces of silver
        in concentrates, for the second quarter and first six months,
        respectively. Final gold production is not available since assaying
        is done off site, but is estimated at 7,564 and 16,091 ounces.

    -   Production of 22.2 and 47.4 million pounds of payable copper in
        concentrate for the second quarter and first six months of 2009,
        respectively.

    -   Total cash cost per pound of payable copper produced(1) of US$0.97
        and US$0.93 in the second quarter and first six months, respectively,
        versus previously published guidance of approximately US$1.00 per
        pound, which represents good progress in cost reductions since year
        end 2008 as the expansions at both operations ramped up to design
        capacity (and more). Readers should note that some stripping in
        excess of that needed to sustain operations at the Minto Mine was
        inadvertently not capitalized in accordance with Capstone's (and
        formerly Sherwood's) policy in the first quarter of 2009 and costs
        for this period have been adjusted to make the first quarter
        comparable to all prior reporting periods.

    -   Cozamin Mine results for the three and six months ended
        June 30, 2009, respectively, were:

        -  Produced 9.9 and 19.7 million pounds of copper contained in
           concentrates, along with by-products of 3.3 and 5.7 million pounds
           of zinc, 2.3 and 3.5 million pounds of lead and 390,639 and
           708,602 ounces of silver, respectively, for the second quarter and
           first six months of 2009;

        -  Processed 249,975 tonnes (2,741 tpd) and 498,300 tonnes
           (2,753 tpd) of ore averaging 1.92% and 1.94% copper, 1.01% and
           0.91% zinc, 0.61% and 0.47% lead, with 66 and 61 grams per tonne
           ("g/t") silver respectively, for the second quarter and first six
           months;

        -  Total tonnes processed was below potential capacity of the mine
           because of (1) the five day shutdown related to Mexican government
           order aimed to slow the spread of the H1N1 flu virus and (2)
           slower than anticipated timing for bringing the high grade, large
           scale stopes on line, which resulted in the plant running out of
           feed on some days. When feed was available, the plant typically
           averaged 3,200 to 3,500tpd and achieved a single day throughput
           record of 4,088 tonnes processed in June.

        -  Produced 17,595 and 36,056 dry metric tonnes ("dmt") of copper
           concentrate averaging 25.5% and 24.8%, 3,312 and 5,727 dmt of zinc
           concentrate averaging 45.5% and 45.2% and 1,500 and 2,282 dmt of
           lead concentrate averaging 70.5% and 69.4%;

        -  Estimated total cash cost(1), net of estimated by-product credits
           and estimated selling costs, was US$0.81 and $0.90 per pound of
           payable copper produced; and

        -  Announced a new life-of-mine plan and mineral reserve estimate for
           the Cozamin Mine on June 1, 2009. However, the process plant has
           demonstrated sustained ability to exceed the assumptions used in
           the life of mine plan for throughput, copper recoveries and copper
           concentrate grades, suggesting potential for sustained higher than
           planned copper production, once the larger stopes discussed above
           are brought on line.

    -   Minto Mine results for second quarter and the six months ended
        June 30, 2009, respectively, were:

        -  Produced 13.2 and 29.4 million pounds of copper contained in
           concentrates, along with by-product 64,927 and 166,918 ounces of
           silver and gold estimated at 7,564 and 16,091 ounces,
           respectively, for the second quarter and first six months;

        -  Processed 267,254 tonnes (2,937 tpd) and 500,783 tonnes
           (2,767 tpd) of ore averaging 2.41% and 2.86% copper, an estimated
           1.0g/t and 1.3g/t gold and 9.6g/t and 12.7g/t silver;

        -  Plant throughput exceeded budget during the second quarter, and
           continued to trend upwards during the three month period,
           typically averaging 3,200 to 3,500 tonnes per operating day
           (excluding maintenance days) and reaching up to 3,700 tonnes
           processed on individual days;

        -  Produced 14,667 and 31,950 dmt of copper concentrate averaging
           40.8% and 41.6%;

        -  Produced 12.7 and 28.5 million pounds of payable copper at an
           estimated total cash cost(1) of US$1.08 and $0.96 per pound of
           payable copper;

        -  Copper production in Q2/09 was somewhat reduced as compared to
           Q1/09 as a result of excess spring run-off waters being diverted
           into the open pit to ensure no non-compliant discharges occurred,
           thereby restricting access to higher grade ore in the pit. This
           was anticipated in the budget for 2009 and milling operations
           continued uninterrupted from stockpiled material, albeit of
           somewhat lower grade than in prior months. However, freshet began
           a few days earlier than budgeted and more water than was
           anticipated was diverted into the pit. The latter will delay re-
           entry (see 'Outlook' below) to the pit and result in the operation
           continuing to rely on lower grade stockpiles until access to the
           pit is regained;

        -  Announced updated mineral resource estimate for Minto on
           June 9, 2009, which demonstrated a 32% increase in contained
           copper over the prior estimate reported in early 2007, and a 163%
           increase since the acquisition of the Minto property in 2005.

    -   Kutcho Project:

        -  Completed evaluation of options for the development of a smaller
           tonnage, higher grade operation with robust project economics,
           with the optimal scenario for an entirely underground mine to be
           detailed in a preliminary economic assessment to be released in
           Q3/09.

    Operating Details - Cozamin Mine

    Key operating statistics for the Cozamin Mine for the first and second
quarter and year-to-date for 2009 are presented below:

    -------------------------------------------------------------------------
                                              Q1 2009    Q2 2009    YTD 2009
    -------------------------------------------------------------------------
    Production(2)
    (contained in concentrates)
    -------------------------------------------------------------------------
      - Copper (000s pounds)                     9,812      9,881     19,693
    -------------------------------------------------------------------------
      - Lead (000s pounds)                       1,155      2,331      3,486
    -------------------------------------------------------------------------
      - Zinc (000s pounds)                       2,388      3,325      5,713
    -------------------------------------------------------------------------
      - Silver (ounces)                        317,963    390,639    708,602
    -------------------------------------------------------------------------
    Mine
    -------------------------------------------------------------------------
      - Tonnes of ore mined                    248,507    243,494    492,001
    -------------------------------------------------------------------------
    Mill
    -------------------------------------------------------------------------
      - Tonnes processed                       248,325    249,975    498,300
    -------------------------------------------------------------------------
      - Tonnes processed per day                 2,759      2,741      2,753
    -------------------------------------------------------------------------
      - Copper grade (%)                          1.96       1.92       1.94
    -------------------------------------------------------------------------
      - Lead grade (%)                            0.33       0.61       0.47
    -------------------------------------------------------------------------
      - Zinc grade (%)                            0.81       1.01       0.91
    -------------------------------------------------------------------------
      - Silver grade (g/t)                          56         66         61
    -------------------------------------------------------------------------
    Recoveries
    -------------------------------------------------------------------------
      - Copper (%)                                91.4       93.4       92.4
    -------------------------------------------------------------------------
      - Lead (%)                                  64.8       69.4       67.5
    -------------------------------------------------------------------------
      - Zinc (%)                                  53.9       59.5       56.5
    -------------------------------------------------------------------------
      - Silver (%)                                71.0       73.6       72.5
    -------------------------------------------------------------------------
    Concentrate(2)
    -------------------------------------------------------------------------
      - Copper (dmt)                            18,461     17,595     36,056
    -------------------------------------------------------------------------
      - Copper (%)                                24.1       25.5       24.8
    -------------------------------------------------------------------------
      - Silver (g/t)                               463        561        511
    -------------------------------------------------------------------------
      - Lead (dmt)                                 782      1,500      2,282
    -------------------------------------------------------------------------
      - Lead (%)                                  67.1       70.5       69.4
    -------------------------------------------------------------------------
      - Silver (g/t)                             1,738      1,511      1,589
    -------------------------------------------------------------------------
      - Zinc (dmt)                               2,415      3,312      5,727
    -------------------------------------------------------------------------
      - Zinc (%)                                  44.8       45.5       45.2
    -------------------------------------------------------------------------
    On site Operating Costs (US$/t milled)(1) US$34.97   US$34.03   US$34.50
    -------------------------------------------------------------------------
    Total cash cost per pound of payable
     copper(1)                                 US$1.00    US$0.81    US$0.90
    -------------------------------------------------------------------------
    (2)    Adjustments based on final settlements will be made in future
           periods.

    Overall, the Cozamin Mine performed well, despite the Mexican Government
ordered 5-day production interruption related to the H1N1 flu virus and
shortages of feed related to delays in bringing the new, higher grade stopes
on line. Development of very wide (20-30m) high grade areas of the Cozamin
deposit were delayed because the wide mineralization extended deeper than
anticipated from drilling and this mineralization needs to be extracted from
the bottom up in order to ensure geotechnical stability. As a result,
development had to be pushed deeper to get to the bottom of the high grade
and, in the interim, production had to come from shallower areas with lower
copper but higher lead content.
    Development of the wider ore zones should be completed in Q3/09 and
production is then expected to ramp up very quickly. In addition, access to
mining areas to the west and to the east of the present zone will provide
additional mining zones in Q3/09. Improved metallurgical performance since
March, resulting from some improved reagents and regrinding of the copper-lead
concentrate, has resulted in sustained higher copper recoveries (93.4% in
Q2/09 vs. 91.4% in Q1/09) and concentrate grade (25.5% in Q2/09 vs. 24.1% in
Q1/09), which performance is expected to be sustainable over the longer term
but is not factored into the recently announced life-of-mine plan.
    During the three months ended June 30, 2009, the Cozamin Mine shipped and
recorded as revenue 17,139 dmt of copper, 1,487 dmt of lead and 8,810 dmt of
zinc concentrates. During the first six months of 2009, a total of 36,620 dmt
of copper, 2,913 dmt of lead and 9,812 dmt of zinc concentrates were shipped
and recorded as revenue.

    Operating Details - Minto Mine

    Key operating statistics for the Minto Mine for the first and second
quarter and year-to-date for 2009 are presented below:

    -------------------------------------------------------------------------
                                               Q1 2009    Q2 2009   YTD 2009
    -------------------------------------------------------------------------
    Production(3)
    (contained in concentrates)
    -------------------------------------------------------------------------
      - Copper (000s lbs)                       16,230     13,178     29,408
    -------------------------------------------------------------------------
      - Gold (oz)(2)                             8,527      7,564     16,091
    -------------------------------------------------------------------------
      - Silver (oz)                            101,991     64,927    166,918
    -------------------------------------------------------------------------
    Mining
    -------------------------------------------------------------------------
      - Waste (tonnes)                       2,196,728  2,845,300  5,042,028
    -------------------------------------------------------------------------
      - Ore (tonnes)                           292,593    289,010    581,603
    -------------------------------------------------------------------------
      - Total material mined (tonnes)        2,489,321  3,134,310  5,623,631
    -------------------------------------------------------------------------
    Milling
    -------------------------------------------------------------------------
      - Tonnes processed                       233,529    267,254    500,783
    -------------------------------------------------------------------------
      - Tonnes processed per day                 2,595      2,937      2,767
    -------------------------------------------------------------------------
      - Copper grade (%)                          3.39       2.41       2.86
    -------------------------------------------------------------------------
      - Gold grade (g/t)(2),(3)                   1.57       0.97       1.28
    -------------------------------------------------------------------------
      - Silver grade (g/t)                        16.0        9.6       12.7
    -------------------------------------------------------------------------
    Recoveries
    -------------------------------------------------------------------------
      - Copper (%)                                93.0       92.6       93.0
    -------------------------------------------------------------------------
      - Gold (%)(2),(3),                          72.8       71.9       72.0
    -------------------------------------------------------------------------
      - Silver (%)                                83.5       79.6       81.7
    -------------------------------------------------------------------------
    Concentrate
    -------------------------------------------------------------------------
      - Dry tonnes produced                     17,283     14,667     31,950
    -------------------------------------------------------------------------
      - Copper grade (%)                          42.6       40.8       41.6
    -------------------------------------------------------------------------
      - Gold grade (g/t)(2),(3)                  15.53       12.5       13.9
    -------------------------------------------------------------------------
      - Silver grade (g/t)                         183        139        162
    -------------------------------------------------------------------------
    On site Operating Costs(1)
     (US$/t milled)(4)                        US$47.85   US$44.52   US$46.01
    -------------------------------------------------------------------------
    Total cash cost per pound(1) of payable
     copper(4)                                 US$0.86    US$1.08    US$0.96
    -------------------------------------------------------------------------
    (2)    Gold is not assayed on site, resulting in a significant lag in
           receiving this data.

    (3)    Adjustments based on final settlements will be made in future
           periods.

    (4)    Minto's operating costs are adjusted to exclude mining of ore and
           waste not related to concentrate produced in the period, these
           costs are capitalized or inventoried in the financial statements,
           then expensed when the associated ore is processed.

    The Minto Mine exceeded budgeted Phase III throughput capacity in Q2/09,
which budget factors in maintenance and availability versus the nominal design
capacity of 3,200tpd. The Phase 3 North pit pushback was completed in March
and attention was focused on stripping the Phase 3 South pushback and
commencing the Phase 4 pit pushback, with mill production coming entirely from
stockpiles throughout the quarter. As with prior pushbacks, the Minto Mine
depletes stockpiles in grade order, from highest to lowest, until the high
grade from the Phase 3 South pit pushback is accessed later in 2009. As noted
above, excess water, over and above what could be contained in the water
storage pond, was diverted into the open pit during freshet in order to
prevent a non-compliant discharge. This diversion was anticipated in the
budget for 2009. However, the snowpack was greater than usual, resulting in
more water being diverted into the open pit than planned. The Minto Mine has
received approvals from regulators to discharge approximately half of the
excess water, and is doing so, and is working on the appropriate measures for
the treatment and discharge of the remainder of the excess water. The timing
of the discharge will affect the timing of re-entry into the open pit and
therefore access to higher grade ore in the pit bottom. In the meantime,
milling operations continue uninterrupted from available stockpiles and
stripping of the Phase 4 pushback is well advanced and continuing. See
'Outlook' below.
    During the three months ended June 30, 2009, the Minto Mine shipped and
recorded as revenue 9,741 dmt of copper concentrate. For the six months a
total of 29,385 dmt were shipped and recorded as revenue. The ice bridge
across the Yukon River closed in early April due to the spring break up and,
as expected, the barging season commenced in early June 2009, limiting the
amount of concentrate that could be trucked from the mine during the second
quarter. A minimum of two 10,000 dmt shipments are expected during the third
quarter. During the period, final pricing on concentrates shipped in prior
periods, settled positively, as a result of higher copper prices. For 2009,
Minto's concentrate off-taker has elected to settle on the basis of shipment
date plus one month, as opposed to plus three months in 2008, reducing the
time lag between provisional payment and final settlement, and likely thereby
reducing the volatility of provisional pricing adjustments.

    Outlook

    As a result of the timing of a number of events at the Cozamin and Minto
mines, Capstone anticipates that the third quarter 2009 will be a below
average production quarter and the fourth quarter 2009 will be above average.
These events include:

    1.  Completing access to the higher grade, very wide mining areas at the
        Cozamin Mine during Q3/09, which will result in mine production
        coming from slightly lower copper (but higher lead and zinc) grade
        areas until this highly productive area is fully developed. This
        could limit mill throughput to around design capacity, which is well
        below recently achieved throughput, but then should ramp up
        significantly in Q4/09.

    2.  Until the water is removed from the open pit, the Minto Mine will be
        restricted to processing stockpiled ore, of which there is sufficient
        to sustain operations for several months. As noted above, the Minto
        Mine is already discharging some of the excess water captured in
        the pit and is working on measures for the discharge of the
        remainder. High grade ore stripped in the Phase 3 south pit pushback
        was already exposed, drilled and blasted prior to the freshet inflow,
        but not removed from the pit, which ore will be readily available as
        soon as the water level is reduced to the level of the ore.

    3.  The Minto Mine has been working on a new water management plan for
        the site for the past two plus years to address higher quantities of
        water within the Minto Mine site than were anticipated in the
        original 1990's permitting process. This plan should be submitted to
        regulators during July 2009 and is intended to eliminate the need for
        one off discharge approvals.

    4.  Waste stripping for the Phase 4 north pit pushback is proceeding on
        plan, which should expose ore in late 2009. As a result of both the
        Phase 3 south and Phase 4 north pushbacks nearing completion, the
        Minto Mine will have considerable high and medium grade ore available
        for processing in the latter part of 2009 and in 2010.

    Overall, taking into the account the above items, combined with their
anticipated resolution and the proven capacity of both the Cozamin and Minto
mines to exceed design mill throughput, Capstone anticipates it will meet its
production guidance for 2009.

    Second Quarter Financial Results Timing

    Capstone will report its second quarter 2009 financial results on
Thursday, August 13, 2009 and will host a conference call and webcast to
discuss these results as noted below.
    Conference call and webcast details are as follows:

    Date:     Friday August 14, 2009
    Time:     8:00 AM PST (11:00 AM EST)
    Dial in:  North America - 1.800.595.8550, International - 1.416.644.3422
    Webcast:
    www.newswire.ca/en/webcast/viewEvent.cgi?eventID=2740540
    Replay:   North America - 1.877.289.8525, International - 1.416.640.1917
              Replay Pass code: 21311141 followed by number sign.

    The TSX does not accept any responsibility for the adequacy or accuracy
    of this press release.

    (1)    These are non-GAAP performance measures and readers should refer
           to Non-GAAP Performance Measures note at the end of this news
           release for further details.

    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
Capstone Mining Corp. (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 Company management's expectations or beliefs regarding future
events and include, but are not limited to, statements with respect to the
estimation of mineral reserves and resources, the realization of mineral
reserve estimates, the timing and amount of estimated future production, costs
of production, capital expenditures, success of mining operations,
environmental risks, unanticipated reclamation expenses, title disputes or
claims and limitations on insurance coverage. In certain cases,
forward-looking statements can be identified by the use of words such as
"plans", "expects" or "does not expect", "is expected", "budget", "scheduled",
"estimates", "forecasts", "intends", "anticipates" or "does not anticipate",
or "believes", or variations of such words and phrases or statements that
certain actions, events or results "may", "could", "would", "might" or "will
be taken", "occur" or "be achieved" or the negative of these terms or
comparable terminology. By their very nature forward-looking statements
involve known and unknown risks, uncertainties and other factors which may
cause the actual results, performance or achievements of the Company to be
materially different from any future results, performance or achievements
expressed or implied by the forward-looking statements. Such factors include,
among others, risks related to actual results of current exploration
activities; changes in project parameters as plans continue to be refined;
future prices of resources; possible variations in ore reserves, grade or
recovery rates; accidents, labour disputes and other risks of the mining
industry; delays in obtaining governmental approvals or financing or in the
completion of development or construction activities; as well as those factors
detailed from time to time in the Company's interim and annual financial
statements and management's discussion and analysis of those statements, all
of which are filed and available for review on SEDAR at www.sedar.com.
Although the Company has attempted to identify important factors that could
cause actual actions, events or results to differ materially from those
described in forward-looking statements, there may be other factors that cause
actions, events or results not to be as anticipated, estimated or intended.
There can be no assurance that forward-looking statements will prove to be
accurate, as actual results and future events could differ materially from
those anticipated in such statements.
    Accordingly, readers should not place undue reliance on forward looking
statements.

    43-101 Compliance

    Unless otherwise indicated, Capstone has prepared the technical
information in this news release ("Technical Information") based on
information contained in the technical reports and news releases (collectively
the "Disclosure Documents") available under Capstone Mining Corp.'s and
Sherwood Copper Corp.'s company profile on SEDAR at www.sedar.com. Each
Disclosure Document was prepared by or under the supervision of a qualified
person (a "Qualified Person") as defined in National Instrument 43-101 -
Standards of Disclosure for Mineral Projects of the Canadian Securities
Administrators ("NI 43-101"). Readers are encouraged to review the full text
of the Disclosure Documents which qualifies the Technical Information. Readers
are advised that mineral resources that are not mineral reserves do not have
demonstrated economic viability. The Disclosure Documents are each intended to
be read as a whole, and sections should not be read or relied upon out of
context. The Technical Information is subject to the assumptions and
qualifications contained in the Disclosure Documents.
    The following employees of Capstone, each a Qualified Person, reviewed
Technical Information contained in this news release: Robert Barnes,
Professional Engineer reviewed Technical Information related to the Cozamin
Mine and Stephen Quin, Professional Geologist reviewed all Technical
Information in this news release. In addition, Randall Thompson, General
Manager, reviewed Technical Information related to the Minto Mine.

    (1)    Non-GAAP Performance Measures

    "Total Cash Cost per Pound of Payable Copper" and "On site operating
costs per tonne milled" are Non-GAAP Performance Measures. These performance
measures are included because these statistics are key performance measures
that management uses to monitor performance. Management uses these statistics
to assess how the Company is performing to plan and to assess the overall
effectiveness and efficiency of mining operations. These performance measures
do not have a meaning within GAAP and, therefore, amounts presented may not be
comparable to similar data presented by other mining companies. These
performance measures should not be considered in isolation as a substitute for
measures of performance in accordance with GAAP.

For further information: about Capstone, please contact: Darren Pylot,
Vice Chairman & CEO or Stephen Quin, President & COO Or Mark Patchett,
Investor Relations, at (604) 684-8894 or toll free at (866) 684-8894;
info@capstonemining.com