Cozamin is a copper-silver underground mine with a surface milling facility, located 3.6 km north-northwest of Zacatecas City in the mineral-rich state of Zacatecas, Mexico.

In 2006, Capstone acquired Cozamin mine for ~$3.5 million and invested under $30 million to bring the mine into production, then two years later, invested an additional ~$20 million to expand the operation. Since then, Cozamin has generated free cash flow at all points of the copper cycle and has delivered over $450 million in cumulative free cash flow (up to December 31, 2019). In 2020, a capital investment of $5 million to debottleneck the underground operation by building a one-way ramp, will unlock 50% more metal output to over 50 million pounds copper and 1.5 million ounces of silver per year by early 2021. The project is currently on schedule for completion in December 2020 and on budget.

Total Measured & Indicated (Apr 30/20)

Total M&I Resource increased by 66%

Since the 2018 Technical Report, 108 km’s drilled within a budget of US$10 million

83% increase to contained copper metal

To 949 million pounds of contained copper metal at 1.63% Cu

71% increase to contained silver metal

To 38.7 million ounces of silver at 45 g/t Ag

Capstone’s Exploration team has delivered NAV creation at Cozamin with exploration excellence. Twice the mine was considered a sunset operation and subsequent exploration success resulted in significant mine life extensions with high grades. A 200-hole drill program 2019/2020 has shown the best is yet to come for Cozamin. The Exploration team drilled over 108,000 meters within a US$10 million budget aiming to double the mine life. In June 2020, an updated Mineral Resource estimate was released, increasing total Measured and Indicated tonnes by 66%, with an 83% increase to contained copper metal to 949 million pounds and a 71% increase to contained silver metal to 39 million ounces of silver. The Company is currently updating Mineral Reserves and an updated technical report is expected in Q3 2020.


Mexico Cozamin Location

Geology and Mining

Geological setting Epithermal and mesothermal vein deposit hosted in intercalated carbonaceous meta-sedimentary rocks and andesitic volcanic rocks ranging in age from Triassic to Cretaceous, and Tertiary rhyolite intrusive rocks and flows.
Economic Mineralization Chalcopyrite, Sphalerite, Galena, Argentite
Mining method Underground longhole stoping
Primary product mined Copper
By-products mined Silver, zinc, lead

Mineral Reserves & Resources

Cozamin Mine Estimated Mineral Reserves as at December 31, 2019

Classification Tonnes (kt) Copper (%) Silver (g/t) Zinc (%) Pb (%) Copper Metal (kt) Silver Metal (koz) Zinc Metal (kt) Lead Metal (kt)
Reserves Summary
Proven 0 0.00 0 0.00 0.00 0 0 0 0
Probable 5,166 1.50 40 0.64 0.13 78 6,710 33 7
Proven + Probable 5,166 1.50 40 0.64 0.13 78 6,710 33 7

NOTE: Tucker Jensen, P.Eng., Senior Mining Engineer at Capstone Mining Corp., is the Qualified Person for the Cozamin Mineral Reserve. Disclosure of the Cozamin Mine Mineral Reserves as of December 31, 2019 was completed using fully diluted mineable stope shapes generated by the Maptek Vulcan Mine Stope Optimizer software and estimated using the 2018 MNFW and MNV resource block models completed by Garth Kirkham, P.Geo., FGC, Kirkham Geosystems Ltd. The Reserves are based on a $50/t NSR cut-off. The NSR formula used for the Reserves was based $2.75/lb Cu, $16/oz Ag, $1.10/lb Zn, metallurgical recoveries of 96.5% Cu, 81% Ag, 44% Zn and confidential smelter contract terms. The resulting NSR275 formula is ($50.707*%Cu + 0.366*Ag ppm + 7.276*Zn%)*(1-NSRRoyalty%). Note that zero value is 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. Contained metals are reported as 100%. Figures may not sum due to rounding.

Cozamin Mine Estimated Mineral Resources as at April 30, 2020

Classification Tonnes (kt) Copper (%) Silver (g/t) Zinc (%) Pb (%) Copper Metal (kt) Silver Metal (koz) Zinc Metal (kt) Lead Metal (kt)
All Zones (Copper-Silver + Zinc-Lead-Silver)
Measured (M) 407 1.24 53 1.23 0.40 5 698 5 2
Indicated (I) 26,051 1.63 45 1.08 0.29 425 37,993 280 75
Total M + I 26,458 1.63 45 1.08 0.29 431 38,687 285 77
Inferred 14,594 0.71 38 2.23 0.62 104 17,928 326 91

NOTE: Mineral Resources are classified according to CIM (2014) definitions, estimated following CIM (2019) guidelines and have an effective date of April 30, 2020. Mineral Resources are reported inclusive of Mineral Reserves. Mineral Resources that were not converted to Mineral Reserves do not have demonstrated economic viability. The independent Qualified Person for the estimates is Mr. Garth D. Kirkham, P. Geo., FGC., of Kirkham Geosystems Ltd. Mineral Resources are reported using NSR350 formula: Cu*65.024 + Ag*0.438 + Zn*10.755 + Pb*6.981. Metal price assumptions (in US$) used to calculate the NSR for all deposits are: Cu = $3.50/lb, Ag = $18.00/oz, Zn = $1.20/lb, and Pb = $1.00/lb. An exchange rate of MX$18.50 per US$1 is assumed. The NSR350 formula used metal recoveries of 95% Cu, 78% Ag, 58% Zn, 40% Pb and incorporates confidential smelter contract terms. Totals may not sum exactly due to rounding. The NSR cut-off of US$50/tonne is based on historical mining and milling costs plus general and administrative costs. The Mineral Resources considers underground mining by longhole stoping and mineral processing by flotation. No dilution is incorporated in the Mineral Resource. All metals are reported as contained. However, it is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated Resources.