Scotiabank Conference November 2018 Cautionary Note On Forward - PowerPoint PPT Presentation

Scotiabank Conference November 2018

Cautionary Note On Forward Looking Information This presentation, and the documents incorporated by reference herein, may contain “forward-looking information” within the meaning of Canadian securities legislation and “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 (collectively, “forward-looking statements”). These forward-looking statements are made as of the date of this document and Capstone Mining Corp. (“Capstone” or the “Company”) does not intend, and does not assume any obligation, to update these forward-looking statements, except as required under applicable securities legislation. Forward-looking statements relate to future events or future performance and reflect our expectations or beliefs regarding future events. Forward-looking statements include, but are not limited to, statements with respect to the estimation of mineral resources and mineral reserves, the realization of mineral reserve estimates, the timing and amount of estimated future production, costs of production and capital expenditures, the success of our mining operations, environmental risks, unanticipated reclamation expenses and title disputes. In certain cases, forward-looking statements can be identified by the use of words such as “plans”, “expects”, “guidance”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, “believes” or variations of such words and phrases, or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved” or the negative of these terms or comparable terminology. In this document certain forward-looking statements are identified by words such as “targeting”, “guidance”, “potential”, “pending receipt”, “plan” and “expected”. By their very nature, forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, amongst others, risks related to inherent hazards associated with mining operations and closure of mining projects, future prices of copper and other metals, compliance with financial covenants, surety bonding, our ability to raise capital, Capstone’s ability to acquire properties for growth, counterparty risks associated with sales of our metals, foreign currency exchange rate fluctuations, changes in general economic conditions, accuracy of mineral resource and mineral reserve estimates, operating in foreign jurisdictions with risk of changes to governmental regulation, compliance with governmental regulations, compliance with environmental laws and regulations, reliance on approvals, licences and permits from governmental authorities, impact of climatic conditions on our operations, aboriginal title claims and rights to consultation and accommodation, land reclamation and mine closure obligations, uncertainties and risks related to the potential development of the Santo Domingo Project, increased operating and capital costs, challenges to title to our mineral properties, maintaining ongoing social license to operate, dependence on key management personnel, potential conflicts of interest involving our directors and officers, corruption and bribery, limitations inherent in our insurance coverage, labour relations, increasing energy prices, competition in the mining industry, risks associated with joint venture partners, our ability to integrate new acquisitions into our operations, cybersecurity threats, legal proceedings, and other risks of the mining industry as well as those factors detailed from time to time in the Company’s interim and annual financial statements and MD&A of those statements, all of which are filed and available for review under the Company’s profile on SEDAR at www.sedar.com. Although the Company has attempted to identify important factors that could cause our actual results, performance or achievements to differ materially from those described in our forward-looking statements, there may be other factors that cause our results, performance or achievements not to be as anticipated, estimated or intended. There can be no assurance that our forward-looking statements will prove to be accurate, as our actual results, performance or achievements could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on our forward-looking statements. Alternative Performance Measures “C1 cash cost”, “cash cost”, “all-in sustaining cost”, “all-in cost”, “fully-loaded all-in cost”, “adjusted net income/loss”, “adjusted EBITDA”, “operating cash flow before changes in working capital” and “net debt” are Alternative Performance Measures. Alternative performance measures are furnished to provide additional information. These non-GAAP performance measures are included in this presentation because these statistics are key performance measures that management uses to monitor performance, to assess how the Company is performing, to plan and to assess the overall effectiveness and efficiency of mining operations. These performance measures may not be comparable to similar data presented by other mining companies. These performance measures should not be considered in isolation as a substitute for measures of performance included in the Company’s unaudited condensed interim consolidated financial statements prepared in accordance with IFRS. Currency All amounts are in US$ unless otherwise specified. 2

Why Capstone Mining? Pinto Valley operations Pinto Valley Mine Low risk copper producer focused Arizona, USA stabilized, steady improvement in on the Americas performance Cozamin Mine Zacatecas, Mexico Cozamin mine expansion Organic growth opportunities targeted Santo Domingo Project Santo Domingo Technical Growing free cash flow and highly Region III, Chile Report update and path leveraged to copper forward 3

Diversified Operations in Low Risk Jurisdictions PRODUCTION GROWTH Operating mines Growth projects and base Short-term Long- term in the Americas metals exploration in stable geographies in the Americas 71,000 tonnes of copper in 2018 from continuing operations 1,2  Pinto Valley  Santo Domingo Arizona, US Region III, Chile 56,000 tonnes copper 1 CS 70%; KORES 30%  Cozamin  Portfolio of exploration Zacatecas State, Mexico 15,000 tonnes copper 1 properties 1. 2018 copper production guidance (±5%) for continuing operations, see news release dated April 24, 2018. 4 2. Minto mine placed on care and maintenance, see news release dated October 11, 2018.

Pinto Valley Mine Open Pit Mine in Arizona, US Mine life (years) 21 2018 Guidance 1 Production (tonnes) 56,000 C1 Cash Cost 2 ($/payable lb produced) $1.90 - $2.00 By-products Mo, Ag  Production planned to increase through 2018 on rising grade  2018 focus on overall plant stabilization and optimization to reduce costs Realizing results from optimization program 1. ± 5%; see news release dated April 24, 2018. 2. C1 Cash Cost is an Alternative Performance Measure. See Forward-Looking Statements and Cautionary Note for NI 43-101 5 information. C1 cash cost/lb of payable copper produced is net of by-product credits and selling costs.

Pinto Valley Mine Plan  PV3 mine plan more than doubles mine life, increases throughput and lowers operating costs without significant capital investment or operational changes  Planning further 10% throughput expansion in 2020/2021, beyond below mine plan; timeline aligned to permitting 60 M 0.60% 50 M 0.50% 40 M 0.40% Million Tonnes Cu Grade 30 M 0.30% 20 M 0.20% 10 M 0.10% 0 M 0.00% 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 PV2 Ore PV3 Ore PV2 Waste PV3 Waste Cu Grade - Pinto Valley Mine Plan 6

Cozamin Mine Underground Mine in Zacatecas State, Mexico Mine life (years) 4+ 2018 Guidance 1 Production (tonnes) 15,000 C1 Cash Cost 2 ($/payable lb produced) $0.75 - $0.85 By-products Zn, Pb, Ag 2019+ Q4 2018   Resource and Reserve update with materials Potential for expansion to use surplus mill handling optimization results capacity; only partially filled from zinc zone   Added zinc production significantly increases Additional infill drilling is targeting inferred by-product credits in H2 resource for upgrading to M&I  Additional exploration targets with potential to extend mine life 1. ± 5%; see news release dated April 24, 2018. 2. C1 Cash Cost is an Alternative Performance Measure. See Forward-Looking Statements and Cautionary Note for NI 43-101 7 information. C1 cash cost/lb of payable copper produced is net of by-product credits and selling costs

Doubled Cozamin Contained Copper in 2018 Consolidated Mineral Resource Estimate Measured & Indicated 250 224 kt 200 +104% Contained Cu (kt) 150 100 110 kt 50 - Dec 31, 2017* Mar 31, 2018** The increasing copper resource creates the potential for utilization of surplus mill capacity and a mine expansion * Refer to the Company’s 2017 Annual Information Form for detailed Mineral Resource Estimate information. 8 **Refer to the Company’s NI 43-101 Technical Report on the Cozamin Mine dated July 19, 2018, effective March 31, 2018.