2022 Guidance For Pinto Valley, Cozamin, And Santo Domingo

VANCOUVER - Capstone Mining Corp. announced the 2022 production, cost and capital guidance, project and exploration work and an update on the combination with Mantos Copper to form Capstone Copper Corp. An update to the 2022 guidance will be provided shortly after completion of the combination with Mantos Copper. In 2021, Capstone’s consolidated copper production was 85,000 tonnes which finished at the upper end of the 79,000 to 86,000 tonnes guidance range.

In 2022, Capstone expects to produce between 82,000 and 90,000 tonnes of copper produced at its Cozamin and Pinto Valley mines.

Darren Pylot, CEO, said, “2021 was another challenging pandemic year and added to this was extreme weather events in Arizona. I’m incredibly proud of our employees for delivering strong operational results despite tough conditions and this speaks to our culture of excellence”.

The Pinto Valley PV4 Study is planned for release in Q4 2022 and is expected to maximize the conversion of approximately one billion tonnes of mineral resources to mineral reserves by extending Pinto Valley’s mine life into the 2050s and to increase the mine’s copper production profile. The application of the following new technologies and innovation is being considered: 1) Expansion of the use of Jetti Catalytic Leach Technology which has the potential to increase higher mill cut-off-grades and increase tonnage available for leaching. Column leach testing is ongoing through H1 2022 and results will be included in the PV4 Study. 2) Enhanced Coarse Particle Flotation was pilot plant tested at Pinto Valley in 2020 and has the potential to increase copper recovery by ~6% while enabling potential to increase mill throughput from the current ~60,000 tonnes per day. A low capital strategy is currently under review to improve coarse particle recovery with some modest investment in the current conventional flotation circuit. 3) Pyrite Agglomeration has strong ESG implications as it will divert acid-generating minerals including pyrite and chalcopyrite from tailings to the dump leach operation. Additional copper recovery and lower costs via self–generation of free acid are also key economic drivers for this project. The project’s implementation is targeted for H2 2022 subject to board approval. The project is expected to require a low capex of less than $10M with a fast payback of approximately 1.3 years.

Higher Mill Throughput will be considered targeting up to 65,000 to 70,000 tonnes per day. Key areas of investment include upgrades to ball mill motors, grinding circuit cyclones, and to the rougher flotation circuit. Coarse particle flotation technology will also be studied. An expanded dump leach strategy would translate to higher grades sent to the mill for processing and increased copper cathode production by expanding dump leach tonnage.

Construction of the new paste backfill plant and dry stack tailings facility at Cozamin started in Q4 2021 and completion is expected at year-end 2022. Approximately half of the filtered tailings will be combined with cement to form a paste and pumped underground to be used as mine backfill, allowing for increased copper ore extraction. This project has contributed to the extension of the mine life through 2031 and may give the optionality to extract ore pillars from historic areas of the mine.

At Santo Domingo, a tailings stream containing pyrite laden with ~0.6% cobalt, will be recovered through flotation. The concentrate will be sent to a conventional process of roasting and solvent extraction followed by crystallization to produce battery grade cobalt sulphate heptahydrate. At an expected 10.4 million pounds of cobalt production per year, this will be one of the largest and lowest cost cobalt producers in the world at C1 cash costs1,2 of -$4 per pound. Additional benefits of this project include the production of by-product sulphuric acid from a pyrite roasting process, which can be used for heap or dump leaching to produce low-cost copper cathodes at Santo Domingo, Mantoverde, and elsewhere in the district.