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Cozamin Mineral Reserves & Resources

Cozamin Mineral Reserve Estimate as at October 24, 2018 at a US$50 Net Smelter Return Cut-off

Category

Tonnes

(kt)

Cu

(%)

Ag

(g/t)

Zn

(%)

Pb

(%)

Copper

Metal

(kt)

Silver

Metal

Troy (koz)

Zinc

Metal

(kt)

Lead

Metal

(kt)

Proven

-

-

-

-

-

-

-

-

-

Probable

6,195

1.60

43

0.71

0.14

99

8,543

44

8

Proven + Probable

6,195

1.60

43

0.71

0.14

99

8,543

44

8

(1) Tucker Jensen, P.Eng., Senior Mining Engineer at Capstone Mining Corp., is the Qualified Person for this Cozamin Mineral Reserve update. Disclosure of the Cozamin Mine Mineral Reserves as of October 24, 2018 was completed using fully diluted mineable stope shapes generated by the Maptek Vulcan Mine Stope Optimizer software and estimated using the 2016 MNV resource block model created by J. Vincent, P.Geo., formerly of Capstone Mining Corp and the 2018 MNFWZ resource block model created by Garth Kirkham, P.Geo., FGC. (2) Mineral Reserves are reported at a US$50/t net smelter return ("NSR") cut-off using the NSR275 formula: ($50.707*%Cu + 0.366*Ag ppm + 7.276*Zn%)*(1-NSRRoyalty%) based on metal price assumptions (in US$) of Cu = $2.75/lb, Ag = $16.00/oz, Zn = $1.10/lb and metal recoveries of 96.5% Cu, 81% Ag, 44% Zn. Note that zero value was attributed to Pb due to low concentrations. Tonnage and grade estimates include dilution and recovery allowances. The NSR royalty rate applied varies between 1% and 3% depending on the mining concession. All metals are reported as contained. Figures may not sum exactly due to rounding.

Cozamin Mineral Resource Estimate as at October 24, 2018 at a US$50 Net Smelter Return Cut-off

Category

Tonnes

(kt)

NSR

(US$)

Cu

(%)

Ag

(g/t)

Zn

(%)

Pb

(%)

Copper

Metal

(kt)

Silver

Metal

Troy (koz)

Zinc

Metal

(kt)

Lead

Metal

(kt)

Measured (M)

407

120

1.24

53

1.23

0.40

5

694

5

2

Indicated (I)

16,881

133

1.50

45

1.25

0.28

254

24,162

210

46

Total M + I

17,288

132

1.50

45

1.25

0.28

259

24,855

215

48

Inferred

16,951

111

1.11

44

1.65

0.29

188

23,939

279

49

(1) Garth Kirkham, P.Geo., FGC, is the independent Qualified Person responsible for the disclosure of Cozamin Mineral Resources.
Mineral Resources are reported at a US$50/t NSR cut-off using the NSR350 formula: Cu*65.024 + Ag*0.438 + Zn*10.755 + Pb*6.981 based on metal price assumptions (in US$) of Cu = $3.50/lb, Ag = $18.00/oz, Zn = $1.20/lb, Pb = $1.00/lb and metal recoveries of 95% Cu, 78% Ag, 58% Zn, 40% Pb. Cozamin Mineral Resources include copper zones (MNFWZ and San Roberto-Cu) and zinc zones (San Rafael-Zn and San Roberto-Zn). All contained metals are reported at 100%. Totals may not sum exactly due to rounding. (2) The cut-off date for mining activities and drillhole sample results is October 24, 2018. (3) Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. (4) Mineral Resources are reported inclusive of the Mineral Reserves.

Mineral Resource Estimate Methodology
The Mineral Resource estimate reported herein was prepared by Garth Kirkham, P.Geo., FGC, of Kirkham Geosystems Ltd. of Burnaby, BC, Canada, an Independent Qualified Person under Canadian Securities Administrators' National Instrument 43-101 ("NI 43-101"). 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 NI 43-101. The estimate was completed using MineSightâ„¢ software using a three-dimensional block model (12 metre by 2 metre by 10 metre block size with 4 metre by 0.5 metre by 2 metre sub-blocks). The MNFWZ model is comprised of eight interpreted three-dimensional wireframes which were the primary estimation domain and hard boundaries were used to constrain the interpolation of grades into the block model. Interpolation parameters have been derived based on geostatistical analysis conducted on one metre composited drill hole. Block grades have been estimated using Ordinary Kriging ("OK") methodology and the Mineral Resources have been classified based on proximity to sample data and the continuity of mineralization in accordance with CIM Definition Standards and Estimation Best Practices. The MNFWZ resource has been estimated using a total of 931 diamond drill holes with 3,221 sample composites.

Mala Noche Vein ("MNV") Resources were updated with the same NSR formula used for MNFWZ and depleted for mining activities until October 24, 2018. No drilling was completed at MNV since 2017. Capstone believes the parameters and methodology are sufficient to consider the MNV Mineral Resources as current for reporting purposes.