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1 SUITE WEST HASTINGS STREET VANCOUVER, BC V6C 2W2 CANADA TEL: FAX: March 14, 2011 #11-06 Capstone Completes Prefeasibility Study on Phase V Expansion of Minto Copper-Gold Mine Study extends mine life to 2020 with yearly average copper production of 43 million pounds at an average cash cost of $1.34/lb of payable copper VANCOUVER, BRITISH COLUMBIA - Capstone Mining Corp. (CS: TSX) today reported the results of a Prefeasibility Study for the Phase V expansion ( Phase V PFS ) of its high grade Minto copper-gold mine in the Yukon. This study recommends a ramp up in mill throughput to an average production rate of 3,750 tonnes per day ( tpd ) throughput or 1.37 million tonnes per year processed in an optimized mill, with ore to be extracted from new mineralized areas discovered in 2009 to 2010 not considered in previous studies. The Phase V PFS targets 400 million pounds of copper in concentrate to be produced over a 10 year mine life, commencing January New deposits not considered in the Phase IV study, issued in December 2009, provided the basis to initiate the Phase V PFS. This Phase V PFS represents another significant milestone in the development of the Minto Mine, said Darren Pylot, President & CEO of Capstone. The Phase V PFS at the Minto Mine has successfully translated recent new mineral discoveries into increases in mineral reserves that are shown to be amenable to a combination of open pit and underground mining that will increase life of mine copper production. Furthermore, as a result of the successful exploration in 2009 and 2010, the Phase V PFS outlines an attractive option for yet more increases in the future. We are already in the planning stage to crystallize this potential additional value, with a significant exploration campaign underway focused on recent discoveries at Wildfire and Inferno and extensions to Copper Keel. We anticipate new mineral resource models in 2011 that we expect to drive further feasibility work needed to evaluate future expansion scenarios or additional mine life. The commencement of underground mining in the second quarter of 2011 will result in an extended mine life, processing of higher grade ore earlier in the mine life, and continued improvement with respect to environmental considerations. Highlights (All amounts in Canadian dollars unless otherwise stated) Net present value, at a constant US$2.75/lb copper price for un-hedged production and a 7.5% discount rate, of $284 million before tax and $206 million after tax; Proven and probable Open Pit and Underground mineral reserves have increased to 12.9 million tonnes grading 1.53% copper, 0.60 g/t gold, and 5.2 g/t silver, for a contained 435 million lbs of copper, 247,000 oz of gold, and 2.2 million oz of silver; Mine life extended to 2020 with an average of 43 million pounds of copper production per year, with additional upside opportunities identified, as discussed below; Life-of-mine capital cost of $76.0 million (excluding a closure cost allowance of $16 million), primarily based on an assumption of conversion to self-mining, which decision will be subject to a cost-benefit analysis vs. remaining with contract mining; and Life-of-mine cash costs of US$1.34/lb* of payable copper, after by-product credits (with gold at US$300/oz and silver at US$3.90/oz, as per the agreement with Silver Wheaton). * This is a non-gaap performance measure and readers should refer to Non-GAAP Performance Measures note at the end of this news release for further details.

2 Phase V PFS The Phase V PFS was completed by SRK Consulting (Canada) Inc. ( SRK ) who were engaged by Capstone s wholly owned subsidiary, Minto Explorations Ltd. ( MintoEx ) to detail new mineral resource and mineral reserve estimates for the Minto Mine property, explore plant capacity improvements based upon mineral reserve increases, design the new-life-of mine plan ( LOMP ) with open pit as well as underground mining and update operating and capital cost estimates. The details of this PFS are provided in a technical report that will be filed on SEDAR within 45 days. New mineral resource estimates were completed for Area 2/118, Minto East and Ridgetop based on exploration drilling results from 2009 and The Minto Main mineral resource estimate was updated to reflect changes due to mining, while the Minto North estimate remains unchanged. A new LOMP was generated using mineral reserves generated from the above mineral resource estimates after appropriate economic and technical considerations were applied. This new PFS incorporates underground mineral reserves and incorporates in-pit tailings disposal methodology. The Phase V PFS supersedes and replaces prior development studies, which should no longer be relied upon. Mineral Resource Estimation The combined mineral resource estimate generated for this Phase V PFS is shown in the table below. For additional information, including the contribution of each deposit to the overall mineral resource, the mineral resource estimates at different cut-off grades, the parameters used to conduct the estimate, and the appropriate National Instrument ( NI ) disclosure, readers should refer to the technical report. Combined Mineral Resource Statement at 0.5% Cu Cut-off for Area 2/118, Ridgetop, Minto Main, Minto North and Minto East Deposits. (1) Class Tonnes (000 s) Copper (%) (1) Numbers may not total due to rounding Gold (g/t) Silver (g/t) Copper (thousands lb) Gold (000s oz) Silver (000s oz) Measured (M) 13, , ,989 Indicated (I) 24, , ,604 M & I 37, , ,592 Inferred 5, , In the opinion of SRK, the block model mineral resource estimate and mineral resource classification reported herein are a reasonable representation of the mineral resources at Area2/118, Ridgetop, Minto North and Minto East deposits at the current level of sampling. The mineral resources presented herein have been estimated in conformity with generally accepted CIM Estimation of Mineral Resource and Mineral Reserves Best Practices guidelines and are reported in accordance with Canadian Securities Administrators NI Mineral resources are not mineral reserves and do not have demonstrated economic viability. Only Measured and Indicated mineral resources have been used in the preliminary feasibility study described in this report. The database used to estimate the Area 2/118 and Ridgetop deposits was audited by SRK and the mineralization boundaries were modelled by SRK based on lithological and structural interpretations. NI Qualified Person Garth Kirkham, P.Geo., estimated resources for Minto North and Minto East deposits and audited the Minto North and Minto East database and modelled mineralization boundaries. SRK is of the opinion that the current drilling information is sufficiently reliable to interpret with confidence the boundaries of the mineralized domains and that the assaying data is sufficiently reliable to support estimating mineral resources. Page 2 of 9

3 In order to demonstrate a reasonable expectation of economic extraction, SRK constrained the overall mineral resource with a Whittle pit optimization software shell using the factors shown in the table below. Only the mineral resources within the shell that met the cut-off grade were considered as resources. Whittle Optimization Parameters for Mineral Resource Estimate Constraint Constraining Parameter Unit Value Copper Price Gold Price Silver Price Mineral Reserves US$/lb 2.85 C$/lb 3.17 US$/oz 900 C$/oz 1000 US$/oz 12 C$/oz Exchange Rate C$: US$ 1.11 Mining Cost C$/t mined 1.50 Processing and G&A Cost C$/t milled 5.00 Royalty % 0.5 Slope angles degrees (overall) 50 The mine plan for the study assumes a start date of January 1, Open pit mining on the Main deposit is projected to be finished with the completion of Stage V in the second quarter of The Ridgetop and Minto North deposits are proposed to be developed exclusively as open pits following completion of mining in the Minto Main deposit. The Area 2/118 deposit is proposed to be mined using a combination of open pit and underground mining methods. The Minto East deposit is to be developed as an underground mine with access coming from an extension of the Area 2/118 decline. Based on a start date of January 2011, the Minto Phase V open pit and underground mines will produce a total of 12.9 million tonnes ( Mt ) of ore (includes the Main pit stockpile balance at the end of 2010) and 58.5 Mt of waste to be placed in dumps or back-filled into open pits. Mining takes place over 7.5 years ending in mid Mill operations will continue processing stockpiled ore for an additional two years to mid In order to attain the proposed LOMP schedule, amendments to the current mining permits and water licence are required in the third quarter of Mineral reserves by deposit are detailed below. Detailed mine design, planning and scheduling was then conducted on the optimal pit shells to produce the current pit designs. The Whittle parameters for open pit mine design are shown in the following table. Metal Prices and Exchange Rate Summary of Whittle Parameters Used for Pit Design Item Unit Value Copper US$/lb 2.25 Gold* US$/oz Silver* US$/oz 3.90 Exchange rate US$/C$ 0.86 Processing Copper recovery to concentrate max 92% Gold recovery to concentrate max 70% Silver recovery to concentrate max 80% *Based on terms of royalty stream agreement with Silver Wheaton. Page 3 of 9

4 Underground mine planning also started with the Net Smelter Return ( NSR ) block model and then assumed a 1.2% Cu equivalent cut-off grade ( COG ). Datamine MRO software was utilized to determine economic mining shapes for underground extraction. Small mineralized zones distant from any proposed access were excluded from the mine plan. Mineral Reserves by Class for Phase V Deposit Main* North Ridgetop Area Underground Total Mineral Diluted grade Contained Metal Tonnes Reserve (Mt) Cu Au Ag Cu Au Ag Class (%) (g/t) (g/t) (Mlb) (koz) (koz) Proven Probable Sub-total Proven Probable Sub-total Proven Probable Sub-total Proven Probable Sub-total Proven Probable Sub-total Proven Probable Sub-total Proven ,343 Probable Total ,146 *includes stockpile balance of 1,631 kt at beginning of 2011 for Main pit but excludes approximately 0.25Mt of partially oxidized material from stockpile. Life of Mine Production Schedule The mining sequence was divided into various stages. The first stage sees the completion of mining in the Main Pit (Stage 5) followed by the first stage of Area 2 (contractor mined), followed by mining of Minto North, Area 118, second stage of Area 2, then two stages in Ridgetop, and finally the last two stages in Area 2. As noted in the table below, underground production supplements the open pit mine ore feed. The stages were designed to provide the required mill feed per period, to process higher grade ore sooner, to defer stripping of waste as long as possible and to accommodate in-pit tailings storage. Page 4 of 9

5 Life-Of-Mine Production Schedule (excluding existing stockpiles) Area Unit Main Stage 5 Kt 618 UG Kt Minto North Kt 281 1,248 Ridgetop Kt A2 Stage 1&2 Kt 188 1, , Kt 491 A2 Stage 3&4 Kt Total Kt 819 1,968 1,011 2,534 1,555 1,515 1, Processing The mill processing profile used in the Phase V PFS is based upon a combination of three years of operating experience of the Minto Mill, combined with new metallurgical and comminution test work undertaken on each of the deposits comprising the Phase V PFS mineral reserves. Metal recoveries were averaged over all deposits but concentrate grades were individually determined for each deposit. The LOM processing schedule is shown below: Parameter Mill Feed Rate Mill Feed Total Feed Grade Recovery to Conc. UNIT Total Life-Of-Mine Mill Processing Schedule Y E A R tpd 3,718 3,442 3,750 3,750 3,750 3,750 3,750 3,750 3,750 3,750 3,750 Mt Cu % Au g/t Ag g/t % Cu % Au % Ag Conc. Grade % Cu Conc. Production Conc. Metal dmt 470,478 44,633 61,728 54,846 94,937 53,519 55,956 36,066 31,201 25,449 12,134 Mlb Cu oz Au 173,146 16,807 22,531 22,259 45,118 19,488 20,538 9,375 8,246 5,948 2,836 oz Ag 1,673, , , , , , , , ,290 73,897 35,234 Page 5 of 9

6 Capital Cost Estimate Life-of-mine capital costs are estimated at $76.0 million, of which $32.0 million is primarily related to the conversion to self-mining in 2012 and $34.1 million is related to the commencement of underground mining; the balance is contingency and sustaining capital incurred over the remaining mine life. An additional closure cost allowance of $16M was used in the cash flow analysis, as per an estimation completed in The earlier 2009 PFS closure cost allowance was $20M, but was considered to be a preliminary estimate. The 2010 estimate was done in more detail with increased accuracy. Phase V PFS Capital Cost Estimate Area Unit C$ Cost Estimate Open Pit Mining Equipment Fleet M$ 32.0 Underground Equipment (fixed and mobile) M$ 18.3 Underground Development M$ 15.8 Process Plant M$ 5.0 Contingency M$ 3.1 Sustaining Capital M$ 1.8 TOTAL CAPITAL COST M$ 76.0 The method of funding the possible acquisition of open pit mining equipment, which could be by cash, capital lease or other method, will be evaluated once a decision on self-mining has been made. Alternatively, contract mining could continue, if contractors can achieve the objectives set out under Operating Cost Estimate section below, eliminating the need for the open pit mining capital noted above. Operating Cost Estimate The direct operating costs for the Phase V PFS were estimated using actual operating data from the Minto Mine using contract mining and from various planned optimizations related to the Phase V expansion and Underground Mining. Phase V PFS Operating Cost Estimate Area Unit C$ Cost Estimate Open Pit Mining* $/t milled Underground Mining* $/t milled Total Mining $/t milled Processing $/t milled General, administration, camp, royalties $/t milled Total $/t milled *Of the M tonnes in reserves, 2.44 M tonnes are extracted with underground mining methods The operating cost estimate equates to a life-of-mine average total cash cost, after selling costs and net of byproduct credits, of US$1.34 per pound of payable copper. Actual annual average reported costs in Capstone s financial statements could vary from this amount due to treatment of inventory, deferred stripping costs and stockpiles on an annual basis. Page 6 of 9

7 Economics SRK reports that the estimated economic benefit of mining the Minto Phase V deposits is sufficient to proceed with further work such as underground development and, in particular securing the required licence and permit amendments from the various regulatory agencies. The Phase V mine expansion adds economic benefit to the mine, yielding a Base Case A (US$2.75 / lb for non-hedged copper production) pre-tax Net Present Value at a 7.5% discount rate ( NPV7.5% ) of $284M. NPV s and copper price assumptions for all three cases used in the study are: Pre-tax NPV 7.5% After-tax NPV 7.5% Case A (Base Case) (US$2.75/lb Cu): $284M $206M Case B (US$2.25/lb Cu): $180M $142M Case C (variable US$3.60/lb Cu to US$2.25/lb Cu): $266M $194M Case B represents the metal price used in the latest mineral reserve estimate. The following table summarizes the three economic scenarios: Comparison of Phase V PFS Base and Alternate Cases Item Unit Case A Case B Case C Waste mined Mt 58.5 Ore mined Mt 11.2 Total mined Mt 69.7 Mill Feed* Kt 12.9 Copper millhead grade % Cu 1.53 Gold millhead grade g/t Au 0.60 Silver millhead grade g/t Ag 5.2 Copper in cons Mlb 400 Gold in cons Koz 173 Silver in cons Koz 1,674 Concentrate Grade % Cu 39 Base Copper Price (ex. hedging) US$/lb to 2.25 Ave. Copper Price (inc. hedging) US$/lb Gold price (inc. hedging) US$/oz Silver price (inc. hedging) US$/oz Exchange rate (LOM average) C$/US$ NSR (inc. royalties) C$/t milled Unit Total OPEX $/t milled Unit On-site OPEX US$/lb Cu payable 1.50 Unit Off-site OPEX US$/lb Cu payable Unit By-product Credit US$/lb Cu payable Unit OPEX net by-product credits US$/lb Cu payable Total Capital (initial & sustaining) C$M 76 Allowance for closure cost C$M 16 NPV 7.5% pre-tax C$M *Mill Feed includes ore stockpile. Page 7 of 9

8 Permitting & Reclamation In the Yukon, mining projects require an environmental assessment prior to the issuance or amendment of significant operating permits for mining, including a Type A Water Use Licence and a Quartz Mining Licence ( QML ). Elements of the Minto Project have undergone environmental assessment previously. A milling and mining rate increase (2008) and the Phase IV expansion (2010) have recently been assessed by the Yukon Environmental and Socioeconomic Assessment Board ( YESAB ). The major instruments permitting and governing operations for the project include Type A and B Water Use Licences, issued by the Yukon Water Board, and a QML issued by Yukon Government, Energy Mines and Resources. Water management planning, as expected, is of particular interest to the stakeholders. The amendment to the Type A Water Use Licence is expected to be issued in the first quarter of The expansion of the Minto Mine in the Phase IV development received an environmental assessment under the Yukon Environmental and Socioeconomic Assessment Act ( YESAA ) and will require QML amendments. The first such QML amendment is anticipated to be issued in the first quarter of 2011, with the remaining necessary QML amendments expected during the second quarter of Certain components of Phase IV will require another amendment to the Type A Water Use Licence, which may be issued by the end of the third quarter of The project is about to enter the YESAA process again for the Phase V expansion project with the assumption that the applicable licence amendments will be issued by the end of Risks & Opportunities The major risk areas identified in this study are: 1. Timing and approval of Phase IV and Phase V mine permit revisions; 2. Exchange rates, metal prices and external influences; 3. The ability to develop the underground mine as per the mining schedule; 4. The ability to transform open pit mining operations to an owner-operated fleet; and 5. The ability to maintain minimum dilution through effective grade control practices. The most important opportunities to improve the project are: 1. Optimization of mine plan; 2. Discovering new mineral resources and converting them to mineral reserves; and 3. Plant capacity expansion potential. Looking Forward With the Phase V PFS in hand, MintoEx can now proceed towards submission of the Phase V permit, developing an underground access decline and constructing supporting infrastructure such as surface ventilation systems. Technical Report The full Phase V PFS, prepared as a NI compliant Technical Report, will be filed under Capstone s profile on SEDAR at within 45 days. Page 8 of 9

9 For further information please contact: Capstone Mining Corp. Cindy Burnett, VP Investor Relations Telephone: Website: Quality Assurance The technical information in this news release has been prepared in accordance with Canadian regulatory requirements set out in National Instrument and reviewed by John Sagman, P. Eng, Manager of Projects, Capstone Mining Corp. Gordon Doerksen, P.Eng. of SRK has reviewed this news release for accuracy to the Phase V PFS report. Exploration activities at the Minto Mine are carried out under the supervision of Brad Mercer, P. Geol., VP, Exploration of Capstone Mining Corp. Forward-Looking Statements 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 forwardlooking statements. 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 mineral 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 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. The Company provides 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. * Non-GAAP Performance Measures Total Cash Costs and Unit Total Operating Costs 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. Page 9 of 9