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Capstone Consolidated Mineral Reserves & Resources

Capstone’s Estimated Mineral Reserves as at December 31, 20171

MINERAL RESERVES CONTAINED METAL
Category kt

Cu

%

Zn

%

Pb

%

Mo

%

Ag

g/t

Au

g/t

Fe

%

Cu

kt

Zn

kt

Pb

kt

Mo

kt

Ag

koz

Au

koz

Fe 4

Mt

Pinto Valley 1 Proven 266,946   0.33 -       0.006      -      880      - 17 - - -
31-Dec-2017 Probable  162,760 0.28      - 0.006      -      456      -  9 - - -
Total 429,706 0.31 - - 0.006 - - - 1,335 - - 26 - - -
Cozamin 2 Proven 247 1.62  0.73 0.18      45      - 4 2 0      356 - -
31-Dec-2017 Probable 3,030 1.70 0.71 0.17 45 52 22 5 4,418 - -
Total 3,277 1.69 0.72 0.17      45      - 56 23 5      4,774 - -
Minto 3 Proven 469 1.02      -      3 0.25      5      -      46 4 -
31-Dec--2017 Probable 2,975 1.69      -          5 0.63      50      -      507 61     
     3,444 1.60      -      5 0.58      55      -      553 64 -
Santo Domingo 4 Proven 65,300 0.61 - - - - 0.08 30.9 398 - - - - 170 8
02-May-2014 Probable 326,400 0.24 - - - - 0.03 27.6 777 - - - - 336 67
Total 391,700 0.30 - - - - 0.04 28.2 1,175 - - - - 506 75
TOTAL CAPSTONE MINERAL RESERVES 2,621 23 5 26 5,327 571 75

Capstone's Estimated Mineral Resources as at December 31, 20172

MINERAL RESOURCES – Inclusive of Mineral Reserves CONTAINED METAL
Category kt

Cu

%

Zn

%

Pb

%

Mo

%

Ag

g/t

Au

g/t

Fe

%

Cu

kt

Zn

kt

Pb

kt

Mo

kt

Ag

koz

Au

koz

Fe 4

kt

Pinto Valley 1 Measured 574,358 0.33       -  0.006      -      1,900      - 34      -     
31-Dec-2017 Indicated 771,072 0.27         -  0.005      -      2,096      - 39 - - -
M&I 1,345,430 0.30      - 0.005      -      3,995      - 74 - - -
Inferred 166,125 0.23      - 0.005 -      - 389      - 9 - - -
Cozamin 2 Measured 572 1.58 1.09 0.29      50      - 9 6 2      923 - -
31-Dec-2017 Indicated 8,080 1.25 1.90 0.34      47      - 101 154 27      12,131 - -
M&I 8,652 1.27 1.85 0.33      47      - 110 160 29      13,055 - -
Inferred 13,169 0.92 1.69 0.16      36      - 122 223 21      15,116 - -
Minto 3 Measured 3,904 1.19      -      3 0.38      46      -      422 48 -
31-Dec-2017 Indicated 12,644 1.48      -      5 0.60      188      -      2,080 242 -
M&I 16,548 1.42      -      5 0.55      234      -      2,502 290 -
Inferred 6,147 1.42      -      5 0.51      87      -      962 100 -
Santo Domingo 4 Measured 64,840 0.62 - - - - 0.08 31.2 402 - - - - 171 -
31-Aug-2012 Indicated 449,000 0.27 - - - - 0.03 25.0 1,212 - - - - 491 -
M&I 513,840 0.31 - - - - 0.04 25.8 1,593 - - - - 660 -
Inferred 58,100 0.20 - - - - 0.03 24.3 116 - - - - 49 -
TOTAL CAPSTONE MEASURED & INDICATED MINERAL RESOURCES 5,932 160 29 74 15,557 951 0
TOTAL CAPSTONE ADDITIONAL INFERRED MINERAL RESOURCES 715 223 21 9 16,078 149 0

1NOTES:  Mineral Reserves take into account mining activities (where applicable) until January 1, 2018. Gregg Bush, P.Eng., Senior Vice President and Chief Operating Officer at Capstone, is the Qualified Person for the disclosure of Capstone's consolidated Mineral Reserves table. Rounding as required by reporting guidelines may result in apparent summation differences between tonnes, grade and contained metal content. All Mineral Reserve estimates are inclusive of dilution and mining recovery factors. Contained ounces (oz) are troy ounces. COG is cut-off grade. NSR is net smelter return. All amounts in US$ unless otherwise specified. Stockpiled material is treated as Proven Mineral Reserves. All mineral reserves are fully diluted and factor mining recovery. See Technical Reports filed under Capstone’s profile on SEDAR for further information. Reserves take into account mining activities (where applicable) until January 1, 2017. Gregg Bush, P.Eng., Senior Vice President and Chief Operating Officer at Capstone, is the Qualified Person for the disclosure of Capstone's consolidated Mineral Reserves table. Rounding as required by reporting guidelines may result in apparent summation differences between tonnes, grade and contained metal content. All Mineral Reserve estimates are inclusive of dilution and mining recovery factors. Contained ounces (oz) are troy ounces. COG is cut-off grade. NSR is net smelter return. All amounts in US$ unless otherwise specified. Stockpiled material is treated as Proven Mineral Reserves. See Technical Reports filed under Capstone’s profile on SEDAR for further information.

1. Claydon Craig, P.Eng., Superintendent of Mine Technical Services at Pinto Valley, is the Qualified Person responsible for the Pinto Valley mineral reserves estimate. Economic inputs to the block model were USD$2.50/lb per pound copper, USD$12.50/lb molybdenum. For the purposes of reporting mineral reserves going forward from January 1, 2017, an average cut-off grade of 0.175% Cu has been used, as it closely approximates the variable 0.17-0.18% Cu cut-off presented in the PV3 Pre-Feasibility NI 43-101 Technical Report. Proven mineral reserves include 400 kt of stockpiled material.

2. Pooya Mohseni, P.Eng., MBA, Director of Technical Services at Capstone, is the Qualified Person for the Cozamin mineral reserve estimates. Disclosure of the Cozamin Mine mineral reserves as of December 31, 2017 was completed using fully diluted mineable stope shapes generated by the Maptek Vulcan Mine Stope Optimizer software and calculated estimated using on the 2016 MNFW and 2017 MNV resource block models created by J. Vincent, P.Geo., of Capstone Mining Corp. Mineral reserves are reported above a  US$ 42/t NSR cut-off. The NSR formula used for the reserves uses the following metal prices: $2.50/lb Cu, $20.00/oz Ag, $1.00/lb Zn, MEX 18.5 to USD 1.0, and metallurgical recoveries of 94.5% Cu, 72% Ag, 70% Zn. The resulting NSR formula is $42.425*%Cu + 0.364*Agppm + 8.123*Zn%. Note that zero value is attributed to Pb because the circuit is expected to be used minimally due to low Pb concentrations. There are no mineral reserves declared in the Zinc Zone (San Rafael and San Roberto Zinc zones).

3.  Pooya Mohseni, P.Eng., MBA, Director of Technical Services at Capstone, is the Qualified Person supervised the preparation of the Mineral Reserves estimate of the Minto deposits. The Mineral Reserves estimates for MSD underground deposits (Area 2/118 underground and Copper Keel underground) and Minto East underground have an effective date of December 31, 2016. The Area 2 open pit mineral reserves have an effective date of December 31, 2015. Metal Price assumptions used to calculate the COG for all deposits are: Cu=$2.50, Au=$300, Ag=$3.90. Processing recoveries for all deposits are: Cu=91%, Au=70%, Ag=78%. Open pit mineral reserves are reported above 0.5% Cu COG. Underground mineral reserves are reported above a 1.2% Cu COG. Calculation of mine depletion during 2017 was overseen by Kevin Cymbalisty, P.Eng., Mine Manager at Minto, and a Qualified Person as defined by NI 43-101.

4. Santo Domingo Project Mineral Reserves shown on 100% basis (Capstone’s share is 70%). Carlos Guzman, FAusIMM, CMC, of NCL Ingeniería y Construcción SpA, is the independent Qualified Person responsible for the preparation of the Mineral Reserves estimate with an effective date of May 2, 2014. Mineral Reserves are reported as constrained within Measured and Indicated pit designs, and supported by a mine plan featuring variable throughput rates and cut-off optimization. The pit designs and mine plan were optimized using the following economic and technical parameters: metal prices of $2.75/lb Cu, $1,275/oz Au and $80/dmt of Fe concentrate; recovery to concentrate assumptions of a maximum of 93.6% for Cu and 75% for Au, with magnetite concentrate recovery varying on a block-by-block basis; copper concentrate treatment charges of $70/dmt, $0.07/lb of Cu refining charges, $5/oz of Au refining charges, $48/wmt and $3/wmt for shipping Cu and Fe concentrates respectively; waste mining cost of $1.53/t, mining cost of $1.53/t ore, and process and G&A costs of $7.84/t processed; average pit slope angles that range from 37.6º to 43.6º; a 2% royalty rate assumption, and an assumption of 100% mining recovery. Fe metal in the table denotes magnetite. There have been no mining activities at Santo Domingo since the release of the NI 43-101 Technical Report.

2NOTES: Mineral Resources take into account mining activities (where applicable) until January 1, 2018. Jeremy Vincent, P.Geo., Manager of Production and Development Geology at Capstone, is the Qualified Person responsible for the disclosure of Capstone's consolidated Mineral Resources table. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. Mineral Resources are reported inclusive of the Mineral Reserves. All Mineral Resources are exclusive to dilution and mining recovery factors. Rounding as required by reporting guidelines may result in apparent summation differences between tonnes, grade and contained metal content. Contained ounces (oz) are troy ounces. COG is cut-off grade. NSR is net smelter return. M&I = Measured & Indicated. All amounts in US$ unless otherwise specified. Stockpiled material is treated as Measured Mineral Resources. See Technical Reports filed under Capstone’s profile on SEDAR for further information.

1. Claydon Craig, P.Eng., Superintendent of Mine Technical Services at Pinto Valley, is the Qualified Person responsible for the Pinto Valley mineral reserves estimate. Mineral resources are presented above a 0.17% Cu cut-off. Measured Mineral Resources include 400 kt of stockpiled material.

2. Jeremy Vincent, P.Geo., Manager of Production and Development Geology at Capstone, is the Qualified Person responsible for the preparation of the mineral resource estimates for the San Roberto and San Rafael zones (effective date of July 31, 2017) and the MNFW zone (effective date of March 31, 2016). All mineral resources are reported above a NSR of $35/t. The Mineral Resources of the Copper Zones (San Roberto and MNFW zones) are reported using the following NSR formula: Cu*42.426 + Ag*0.364 + Zn*8.123 + Pb*0. The following metal prices for copper, silver, zinc, and lead are used: $2.50/lb, $20.00/oz, $1.00/lb, and $0.90/lb. Processing recoveries used to calculate the NSR COG are based on historical operational performance and are the following: Cu=94%; Ag=72%; Zn=70%; Pb=0%. No value is attributed to lead at present in the copper zones as grades are insuffient to operate the lead circuit in the mill. The Zinc Zone mineral resources (San Rafael and San Roberto Zinc zones) are reported using a NSR formula that assumes a blend of 65% ore from the San Roberto/MNFW zones and 35% ore from the San Rafael/San Roberto Zinc zones: NSR = Cu*40.376 + Ag*0.363 + Zn*8.811 + Pb*9.452. The following metal prices for copper, silver, zinc, and lead are used: $2.50/lb, $20.00/oz, $1.00/lb, and $0.90/lb. Processing recoveries used to calculate the NSR COG were Cu=90%; Ag=74%; Zn=79%; Pb=76%.  Exchange rate assumed in the Copper and Zinc Zone NSR formulae is MEX18.5 to US$1.00.

3. Douglas McIlveen, P.Geo., Chief Geologist at Minto, is the Qualified Person responsible for the disclosure of the Minto Mine Mineral Resources taking into account ongoing mine production. Garth Kirkham, P.Geo., FGC, of Kirkham Geosystems Ltd., is an independent Qualified Person responsible for the preparation of the Mineral Resources estimates for the Minto North and Minto East 2 areas. The Minto East 2 area was re-esimated with an effective date of May 31, 2015. Jeremy Vincent, P.Geo., is the Qualified Person responsible for the Minto East resource estimate with an effective date of June 30, 2016. Dr. Wayne Barnett, Ph.D., P.Geo., of SRK Consulting (Canada) Inc., is an independent Qualified Person responsible for the preparation of the Mineral Resources estimate at Ridgetop that takes into account drillhole data until August 2010, and the MSD deposit, which includes the Area 2/118, Wildfire, and Copper Keel areas. The MSD Mineral Resource estimate has an effective date of May 31, 2015; the Copper Keel zone was updated in 2017. Ridgetop is amenable to open pit extraction. Area 2/118 and Wildfire areas are amenable to open pit and underground mining, while Minto East, Minto East 2, and Copper Keel areas are suitable for underground mining. Mineral Resources are reported above a 0.5% Cu COG for open pit resources and above a 1.0% Cu cut-off for underground resources. Measured resources contain 489 kt of stockpiled material.

4. Santo Domingo Project Mineral Resources shown on 100% basis (Capstone’s share is 70%). David Rennie, P.Eng., of Rosco Postle Associates Inc. and an independent Qualified Person responsible for the preparation of the Mineral Resources estimates for the Santo Domingo Sur, Iris, and Iris Norte deposits, which have an effective date of August 31, 2012. Mineral Resource estimates for the Estrellita deposit have an effective date of October 30, 2007. Mineral Resources for the Santo Domingo Sur, Iris, and Iris Norte deposits are reported using a COG of 0.25% copper equivalent (CuEq). CuEq grades are calculated using average long term prices of US$3.50/lb Cu, US$1,500/oz Au and US$1.94/dmtu Fe (US$120/dmt conc. at 62% Fe). The CuEq equation is: Metal Value = Grade*Cm*R%/100*(Price-TCRC-Freight)*(100-Royalty)/100, where Cm is a constant to convert grade of metal to metal price units; R is metallurgical recovery and %Cu Equivalent = (Cu Value + Au Value + Fe Value)/(Cu Value per 1%Cu). An assessment of reasonable prospects for economic extraction for the Santo Domingo Sur, Iris, and Iris Norte deposits was performed using a Lerchs–Grossman pit shell that has the following assumptions: pit slopes averaging 45°; mining cost of US$1.19/t, processing cost of US$ 4.49/t; processing recovery of 85%; selling price of US$2.25/lb, and a selling cost of US$0.247/lb. At the 0.25% CuEq cut-off, all but 5% of the Mineral Resources were captured by the pit shell. On the basis of this result, it was concluded that there was little merit in restricting the Mineral Resources to those blocks contained only within the pit shell. Fe in the table denotes magnetite. Accordingly, the Mineral Resource inventory was reported in its entirety. Mineral Resources for the Estrellita deposit are reported using a 0.3% Cu COG.