(All amounts in US$ unless otherwise stated)

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VANCOUVER, BRITISH COLUMBIA - Capstone Mining Corp. (CS-TSX) today provided its production guidance for 2011 for its Cozamin and Minto mines. Capstone expects to produce 80 million to 85 million pounds of copper in concentrates in 2011 at a total cash cost(*) of approximately US$1.30 to US$1.35 per pound of payable copper, net of by-product credits and selling costs, based on an exchange rate of C$1.05/US$1.00 and MXP$12.50/US$1.00. Of this production, approximately 48% is projected to come from the Minto Mine and 52% from the Cozamin Mine.

"Capstone's focus for 2011 is maintaining steady production from its Cozamin Mine in Mexico, and transitioning the Minto Mine to a second open pit and inaugurating underground mining," said Darren Pylot, Vice Chairman & CEO of Capstone. "Our capital investment is focused on facilitating the transition to new mining areas at the Minto Mine and building on the outstanding exploration results from 2010, which offer potential for significant organic growth."

Outlook for 2011

Forecast production and costs for the Cozamin and Minto mines in 2011 is as follows:

(*)These are non-GAAP performance measures and readers should refer to notes on non-GAAP performance measures in the Company's management discussion and analysis for the three and nine month periods ended September 30, 2010 as filed on Sedar for further details.

Cozamin: Copper production in 2011 is expected to be higher than 2010 when production is back underway from the wider, higher grade portions of the Cozamin deposit. Slightly higher throughput, similar grades and recoveries are forecast for 2011 as compared with 2010.

"The focus for the Cozamin Mine is to sustain production from the widest, high grade parts of the mine," said Gregg Bush, Chief Operating Officer for Capstone. "We are confident that this is achievable, with mining in these areas to commence in Q1/11, and working closely with our geotechnical consultants to ensure this is done without risking the health and safety of our workers."

Minto: Copper production is expected to be similar to 2010, with increased throughput offset by a lower grade forecast for 2011. The increased cash costs reflect lower overall grades. Minto will be in a transitional year as mining of the Minto Main Pit is completed towards the end of Q1/11 and operations move to the Phase IV areas, encompassing the Area 2/118 deposits, which will be extracted from both open pits and from underground. As a result of this transition, processing of higher grade ore from the Minto Main pit will continue through the first half of 2011, after which operations will be dependent on lower grade stockpiles until higher grade ore is accessed from the Area 2/118 pits and underground operations in the second quarter of 2012.

"During the first half of 2011 we will benefit from the last of the higher grade ore from the main pit, and in the second half we will benefit from a lower milling cost structure with the transition to in-pit tailings disposal from the current filtration/dry stacking system," said Mr. Bush. "We are looking forward to opening up new production areas in 2011."

The Phase IV project at Minto encompasses the Area 2/118 deposits, with both open pit and underground mining, and this will be followed by Phase V, which encompasses the high grade Minto North (open pit) and Minto East (underground) deposits and the more moderate grade Ridgetop (open pit) deposit. The scope of Phase V may be expanded to encompass the Wildfire, Inferno and Copper Keel deposits, where considerable exploration success has been encountered in 2010.

Production Optimization

With both the Minto and Cozamin mines having experienced production challenges in 2010 and, as a result, 2011 will be a year of optimizing the current operations by stressing efficiencies in operations and costs, the safety of our workers and the sustainability of our operations.

2011 Capital Expenditure Guidance

Cozamin and Minto capital expenditures for the year are estimated at $23.7 million (excluding exploration), which includes $6.6 million at Cozamin and $17.1 million at Minto. Included in these amounts is sustaining capital of $6.6 million at Cozamin and $2.0 million at Minto, $13.2 million for Minto Phase IV development and start-up, and $1.9 million for the permitting and engineering of Minto Phase V.

Exploration Activities

Cozamin and Minto exploration expenditures for the year are estimated at $10.6 million which includes $5.2 million at Minto and $5.4 million at Cozamin, however, such amounts could be increased based on success. The exploration focus for the Minto Mine in 2011 is the continued discovery and delineation of mineral resources, where four years of excellent results and significant resource increases show no sign of slowing. Maiden mineral resource estimates are planned for both the Wildfire and Copper Keel deposits in Q1/11. In addition, Capstone plans to continue step-out drilling on the recently announced Inferno discovery and expanding the Copper Keel deposit, as well as drill testing new Titan 24 targets generated in 2010. Exploration at Cozamin will focus on the recently discovered Mala Noche Footwall Zone, within the immediate area of the Cozamin mine mineral resources and reserves, as well as evaluating several of the other targets identified within Capstone's prospective land holdings. The discovery of the footwall zone has opened up potential for the discovery and definition of additional mineral reserves and production in close proximity to the existing mine workings.

Development Activities

Kutcho expenditures for 2011 are estimated at $4.5 million, which amount includes $2.3 million in exploration and $2.2 million in permitting and pre-production studies. The exploration activities will be focused on the discovery of additional high grade massive sulphide deposits, following the exceptional results from the definition drilling in the Esso deposit in 2010. Permitting will focus on preparing the formal application for the development of a high grade underground mine at Kutcho, and advancing the project through the regulatory process, including consultation with First Nations.

For further information about Capstone, please contact:

Darren Pylot, Vice Chairman & CEO, Gregg Bush, COO