Capstone extends Mala Noche mineralization

Vancouver – Capstone Gold’s (CSG-T) latest drill results show the mesothermal nature of the Mala Noche vein at its Cozamin copper-silver-zinc project in Zacatecas, Mexico.

Capstone has been drilling from surface at the past producing mine since March 2004 and is in the midst of an 8,000-metre Phase II drill program.

Capstone’s latest set of assay results from surface drilling along the Mala Noche vein system shows that copper, silver and zinc mineralization extends more than 5.5 km along strike and at least 650 metres down dip. The vein is still open in all directions.

Holes 21 and 22 hit an area of complex faulting in the 2,150-metre level which is 400 metres below surface.

• Hole-04-21 – 8.5 metres grading 0.2% copper, 11.1 grams silver and 5.9% zinc;
• Hole-04-22 – 1.4 metres grading 1.7% copper, 30.2 grams silver and 0.1% zinc.

Step out holes, CG-04-23 to 25, 1.5 km east of the San Roberto sector of the Mala Noche vein system also yielded higher zinc grades and lower copper grades. Capstone believes higher copper and silver may occur at depth.

• Hole-04-23 – 0.6 metres grading 0.0% copper, 30.5 grams silver and 3.8% zinc;
• Hole-04-24 – 0.8 metres grading 0.1% copper, 18.2 grams silver and 9.4% zinc.

Holes CG-04-26 to 29 which are spaced at 200 metres, intersected the Mala Noche vein system some 250 metres below the earlier drilling at the 1,900-metre which is 650 metres below surface. Here copper and silver are found to dominate the mineralization. The increasing copper grades, combined with decreasing zinc grades at depth are significant because zinc was hard to recover in the past and had a high iron content making it less amenable to smelting.

• Hole-04-26 – 4.6 metres grading 2% copper, 32 grams silver and 0.1% zinc;
• Hole-04-27 – 5.9 metres grading 1.8% copper, 62.1 grams silver and 0.8% zinc;
• Hole-04-28 – 3.8 metres grading 2% copper, 40.8 grams silver and 0.1% zinc;
• Hole-04-29 – 3.2 metres grading 5.5% copper, 158.9 grams silver 1.1% zinc.

Cozamin, which last saw production in 1997, has a 750-tonne-per-day flotation plant on site. Capstone has completed reconditioning of the San Roberto hoist, headrame and shaft. With dewatering of the workings completed, underground development is now under way.

The San Roberto sector, near the mill, is where underground production occurred.

Underground sampling and diamond drilling by previous operators yielded potential sulphide resources at San Roberto. Measured and indicated resources included 2.7 million tonnes grading 85 grams silver and half a gram of gold per tonne, plus 0.95% copper, 3.16% zinc and 0.88% lead. There are also, in the inferred category, 3.1 million tonnes grading 103 grams silver, 0.5 gram gold, 1.41% copper, 3.21% zinc and 0.85% lead.

Capstone’s first phase of 19 holes (7,500 metres) indicated an average width of 6.6 metres and grades of 2.61% copper, 91.2 grams silver and 1.38% zinc.

The second phase of drilling is trying to define at least three years’ worth or some 6 million tonnes of minable material to justify restarting the Cozamin mill.

The company recently selected a team of Canadian advisors and consultants to take on development, pre-production, environmental and mining operation responsibilities at Cozamin. The consultants will be headed by engineering and environmental professionals with various levels of experience including two from TeckCominco (TEK-T). The team includes three consultants that worked at Pan American Silver’s (PAA-T) La Colorada underground silver mine in Zacatecas.

Capstone intends to carry out metallurgical studies and underground definition drilling as part of a scoping study, which is due by June.

Plans at Cozamin call for underground mining to begin in the first half of 2006 at a capital cost of US$15-20 million.

The property is one of five that were optioned to the junior for a 90% interest from Mexican mining conglomerate Grupo Bacis late in 2003. Bacis retains a 1.5% net smelter royalty and a 10% interest in the properties.