Slide 1: Q2 2020: Resilient Growth on Track
Q2 2020: RESILIENT GROWTH ON TRACK JULY 2020 PV3 Optimization Phase 1 work underway – July 2020
Slide 2: Participants On Today's Call
Participants On Today’s Call Darren Pylot Raman Randhawa Brad Mercer President and CEO SVP and CFO SVP, Exploration and Operations Jason Howe Mike Wickersham Jerrold Annett SVP, Corporate Development Mine GM, Pinto Valley VP, Strategy and Capital Markets CAPSTONE MINING (TSX:CS) • 2
Slide 3: Cautionary Notes
Cautionary Notes CAUTIONARY NOTE ON FORWARD LOOKING INFORMATION COMPLIANCE WITH NI 43-101 This document may contain “forward-looking information” within the meaning of Canadian securities legislation and “forward-looking Unless otherwise indicated, Capstone has prepared the technical information in
Slide 4: Q2 2020 Results
Q2 2020 Results Q2 2020 YTD 2020 2020 CONSOLIDATED C1 Cash C1 Cash Copper Copper Costs1 per Costs1 per Production Production GUIDANCE Pound Pound (million (million Payable Payable pounds) pounds) Produced Produced Pinto Valley 30.2 $2.12 57.0 $2.25 140 – 155 million pounds of copper production Cozam
Slide 5: COVID-19 Update
COVID-19 Update Employee Health & Safety • Continue to implemented rigorous control and prevention measures Our top priority at all our offices and operations. continues to be the Business Continuity • At the end of May, Cozamin ramped up to full capacity following a health of our temporary six-week
Slide 6: Pinto Valley's Daily Throughput: PV3 Optimization
Pinto Valley’s Daily Throughput PV3 OPTIMIZATION 75.0 PV3 Optimization 70.0 Phase 1 Potential** 65.0 ~56-57 ktpd Improve mill reliability to run rates 60.0 of 57 ktpd with a series of low 55.0 capex and quick payback initiatives ktpd 50.0 45.0 Phase 2 To push the processing bottleneck 40.0 to the gr
Slide 7: PV3 Optimization: Phase 1 Projects Underway – July 2020
PV3 Optimization: Phase 1 Projects Underway – July 2020 First of two secondary crushers installed, the second to be completed by year end. The new crushers are 50% more powerful. First of two ball mill shell replacements completed, the second to be done in Q1’21. Three secondary screen decks replace
Slide 8: Expanding Cathode Production at PV to 300-350 Mlbs
Expanding Cathode Production at PV to 300-350 Mlbs • 25 million pound per year SX-EW currently operating at under 20% capacity • Low cost cathode production from historic waste and future high-grade waste • All-in cost1 expected to be ~$2.00 per pound • Cathode expansion is extension to PV3 Optimiza
Slide 9: Pinto Valley: An Exciting Future
Pinto Valley: An Exciting Future A long-life, multi-generational asset. Currently focused on optimization 2039+ and evaluating long-term growth potential beyond current mine life. 2021 ~20 years mine life Current mine life to NI 43-101 Update 2039; total Reserve An updated NI 43-101 Estimate1 of 399
Slide 10: The Best Has Yet to Come at Cozamin
The Best Has Yet to Come at Cozamin December 31, 2019 • 108,000 meters of drilling within a budget of US$10 million since the 2018 Technical Report, has increased total Measured and Indicated tonnes by 66%1 • 83% increase to contained copper metal to 949 million pounds • 71% increase to contained si
Slide 11: Cozamin Metallurgy Is Excellent
Cozamin Metallurgy Is Excellent Recoveries at 4,000 tpd Actual mill results during 120 day period from February to June 2020 4,500 Cu-Ag-Zn Blend 94% copper 78% silver Cu-Ag Only 96% copper 85% silver 100.0% 97.5% 4,300 95.0% 4,100 Cu-Ag Only 92.5% 3,900 90.0% 87.5% Cu-Ag-Zn Blend Daily Milled Tonne
Slide 12: Exploration Excellence: Cozamin Steady Resource Growth
Exploration Excellence: Cozamin Steady Resource Growth Resource Growth - YE AIF Totals 45,000 2.00% 1.74% 1.80% 40,000 1.63% 1.63% 1.60% 35,000 1.49% 1.47% 14,594 kt Resource Tonnes (reported in AIF) 1.40% 30,000 1.27% 1.20% Cu Headgrade, % 25,000 16,922 kt 16,736 kt 1.00% 20,000 +67% Indicated 0.80
Slide 13: Drilling at Cozamin Resumes, Targeting Untested Territory
Drilling at Cozamin Resumes, Targeting Untested Territory San Roberto Shaft Three drills all One Way stepping out for Haulage Loop more tonnes OPEN OPEN OPEN MNFWZ OPEN Vein 10 OPEN MNFWZ Vein 20 OPEN Inferred Resources Indicated Resources Proposed Step-out Drillholes for 2020 STEP OUT TARGETS OPEN
Slide 14: Q2 2020 Financial Results and Balance Sheet Strength
Q2 2020 Financial Results and Balance Sheet Strength Strong Q2 Despite COVID-19 Restrictions Liquidity Improved From March 31, 2020 OPERATIONAL OVERVIEW Q2 2020 YTD 2020 • Maximized sales volumes and secured $27 million in Copper production (million pounds) 38.5 74.0 off-take arrangement and advance
Slide 15: Santo Domingo in the Middle of a Growing Mining District
Santo Domingo in the Middle of a Growing Mining District ~1,000m above sea level REGION III, CHILE 20 km (TSX:CS) • 15
Slide 16: Pipeline of Catalysts to Keep Capstone Outperforming Peers
Pipeline of Catalysts to Keep Capstone Outperforming Peers Pinto Valley Cathode • 300 to 350 million pounds of production from residual and high-grade waste over next two decades, adding 30 jobs • SX-EW plant currently only operating at 20% capacity, only $25 to $30 million expansionary capital requ
Slide 17: 2021 is Less Than Six Months Away!
2021 is Less Than Six Months Away! ~20% silver 75 to 125% EBITDA GROWTH ~20% copper ~10% equivalent production growth lower costs WITH RISING PRICES production growth $225 Million ~2.3 $1.85-$2.00 ~170-185 Moz per lb $175 Mlbs 140-155 ~1.9 Million Mlbs Moz ~$1.70-$1.80 $100 per lb Million 2020e 2021
Slide 18: Appendix
APPENDIX CAPSTONE MINING (TSX:CS) • 18
Slide 19: Company Structure
Company Structure TSX:CS Top Five Institutional Shareholders Shares Outstanding (as at Jun 30/20) 400 million Own ~50% of Capstone Market Cap (as at Jul 29/20) US$316 million Institution Name % of S/O Cash and Cash Equivalent (as at Jun 30/20) US$86.2 million GRM Investments Ltd. 23% Long Term Debt
Slide 20: The Right Management Team
The Right Management Team DARREN PYLOT JERROLD ANNETT, P.Eng. President & CEO VP, Strategy and Capital Markets Over 30 years in mining, founder of Capstone Over 25 years of global mining and capital Mining, acquired Cozamin for $3M, which has markets experience, previously in senior strategic delive
Slide 21: Board of Directors
Board of Directors GEORGE BRACK, MBA, CFA, BA Sc DALE PENIUK, CPA, CA, B.Comm Chairman of the Board Former Assurance Partner, Mining, KMPG LLP and is Over 30 years in mining focused on exploration, corporate currently Audit Committee Chair for Lundin Mining, Argonaugt development and investment bank
Slide 22: Total Global Copper Inventory is Near a 10 Year Low
Total Global Copper Inventory is Near a 10 Year Low Source: Bloomberg CAPSTONE MINING (TSX:CS) • 22
Slide 23: Pinto Valley: Only Operating Mine In This Historic District
Pinto Valley: Only Operating Mine In This Historic District • The Globe-Miami district is one of the oldest and most productive mining districts in the United States, with its first recorded production occurring in Pinto Copper Cities 1878. Since that time, more than 15 billion pounds Valley (BHP) o
Slide 24: Pinto Valley Reserves & Resources
Pinto Valley Reserves & Resources COPPER Total Proven & Probable Cu Mineral Reserve 1.24 Mt contained metal (399 Mt @ 0.31% Cu) Total Measured & Indicated Cu Mineral Resource 4.13 Mt contained metal (1,357 Mt @ 0.30% Cu) Measured Cu Mineral Resource 1.89 Mt contained metal (567 Mt @ 0.33% Cu) Indica
Slide 25: Cozamin: MNFWZ Vein 20 Indicated Resource Growth
Cozamin: MNFWZ Vein 20 Indicated Resource Growth Measured & Indicated As of April 30, 2020 Compared to as of December 31, 2019 December 31, 2019 Resource Estimate Copper-Silver Zones 13,086 kt 118% increase in tonnes 2.35% Cu 4% increase in copper grade Mala Noche Footwall Zone Vein 20 52 g/t Ag 3%
Slide 26: Cozamin Has Delivered Best In Class Returns
Cozamin Has Delivered Best In Class Returns Cumulative free cash flow of over $450M since 2007 Total invested between 2006-2008 = $52 million Expansion investments Acquisition Avg. Cu $/lb: $3.05 $3.19 $3.15 $2.34 $3.42 $3.84 $3.66 $3.30 $3.03 $2.35 $2.27 $2.86 $2.92 $2.76 NOTE: Tax cash flows estim
Slide 27: Cozamin Reserves & Resources
Cozamin Reserves & Resources COPPER Total Proven & Probable Cu Mineral Reserve 78 kt contained metal (5,166 kt @ 1.50% Cu) Total Measured & Indicated Cu Mineral Resource 431 kt contained metal (26,458 kt @ 1.63% Cu) Inferred Cu Mineral Resource 104 kt contained metal (14,594 kt @ 0.71% Cu) SILVER To
Slide 28: Santo Domingo: A Rare First Quartile Project
A Rare First Quartile Project SANTO DOMINGO • Received all critical permits to start construction including approved mine closure plan • Base Case1 Cu-Fe-Au US$1.51B capex; US$1.03B NPV8% • Payback period (after-tax): 2.8 years • PEA Cobalt1 Opportunity, incremental US$0.67B; potential to add additi
Slide 29: Santo Domingo: Opportunity to Build a Cobalt Business
Santo Domingo: Opportunity to Build a Cobalt Business Base Case – No Cobalt Processing Cobalt PEA Opportunity Cumulative FCF and CuEq Grade Over LOM Cumulative FCF and CuEq Grade Over LOM $4,000 1.20% $6,000 1.40% $5,293 $3,250 $5,000 1.20% $3,000 1.00% $4,000 1.00% $2,000 0.80% $3,000 0.80% US$ mil
Slide 30: Santo Domingo Boasts Robust Economic Metrics
Santo Domingo Boasts Robust Economic Metrics Profitability Index, After-Tax IRR and After-Tax NPV Benchmarking Bubble size denotes after-tax NPV (US$bn) $0.5 $1.5 $2.0 Feasibility Pre-Feasibility PEA Acquired Chart source: RBC Capital Markets (RBC Source: Wood Mackenzie, RBC database and company dis
Slide 31: Santo Domingo Reserves & Resources
Santo Domingo Reserves & Resources COPPER EQUIVALENT Total Measured & Indicated CuEq Mineral Resource 537 Mt @ 0.52% CuEq Inferred CuEq Mineral Resource 48 Mt @ 0.41% CuEq COPPER Total Proven & Probable Cu Mineral Reserve 1,167 kt contained metal (392.3 Mt @ 0.30% Cu) Total Measured & Indicated Cu M
Slide 32: Capstone History
Capstone History 2004 2005 2006 2007 2008 2009 2011 2013 2017 2019 2021+ January: June: February: October: May: May: June: October: December: June: 2021+ Acquired Sherwood Minto Minto began Sherwood Silverstone Formed a Acquired Sold Kutcho Sold Minto The best Cozamin Copper development commercial m
Slide 33: Contact Information
Contact Information GENERAL INQUIRIES MEDIA AND INVESTOR INQUIRIES Capstone Mining Corp. Jerrold Annett Suite 2100 – 510 West Georgia Street Vice President, Strategy & Capital Markets Vancouver, BC V6B 0M3 Suite 2700 – 161 Bay Street Toronto, ON M5J 2S1 www.capstonemining.com 1-416-572-2272 in