Cozamin (Mexico)

Project Overview

Capstone Mining Corp. (“Capstone”) owns the high-grade, low-cost underground Cozamin copper-silver-lead-zinc mine (“Cozamin”) located in the mineral-rich state of Zacatecas, Mexico. Since its commissioning in 2006, the mine has undergone two successful expansions tripling production levels to the current rate of 3,000 tonnes per day. Exploration success has led to significant resource increases over the last few years and excellent potential exists to continue this expansion.

The Mala Noche vein, where current mining is focused, has only been partially exploited and the possibility of finding additional mineralization is high. Current mineral resources are contained within only a 2km strike length of the 5km long Male Noche vein. Exploration drilling has indicated that the copper-silver phase of mineralization extends to greater depths than the current mineral resources, and exploration will focus along strike and down dip of this system.

Cozamin is an underground mine with a conventional crushing, grinding and flotation surface mill facility. The underground area of the mine is accessed by either a shaft from the surface or one of two ramps. The mill produces copper, zinc and lead concentrates that are shipped to the port of Manzanillo for export to world markets. A number of upside opportunities to increase milling throughput, recoveries and concentrate grades, all leading to increased production rates, are being pursued.

As of December 31, 2009, the Cozamin mine has delivered nearly 1 million ounces of silver to Silver Wheaton, generating cumulative operating cash flows of $12 million.

Silver Purchase Agreements

Silver Wheaton acquired Silverstone Resources Corp. in May 2009 giving Silver Wheaton the right to purchase Silver 100% of the silver production from the Cozamin mine until 2017 for the lesser of US$4.00 per ounce of silver (subject to an annual 1% inflationary adjustment after 3 years) or the prevailing market price per ounce of silver delivered.  

Reserves and Resources 

Proven & Probable Reserves Attributable to Silver Wheaton  (1,2,3,8,15,16)
As of December 31, 2009 unless otherwise noted (6)	Proven			Probable			Proven & Probable
	Tonnage	Grade	Contained	Tonnage	Grade	Contained	Tonnage	Grade	Contained	Process Recovery(7)
	Mt	g/t	M oz	Mt	g/t	M oz	Mt	g/t	M oz	%
SILVER
Cozamin
Copper	1.6	76.3	4.0	5.9	59.0	11.3	7.5	62.7	15.2	74
Zinc	-	-	-	1.9	37.2	2.2	1.9	37.2	2.2	74

Measured & Indicated Resources Attributable to Silver Wheaton (1,2,3,4,5,9,15,16)
As of December 31, 2009 unless otherwise noted (6)	Measured			Indicated				Measured & indicated
	Tonnage	Grade	Contained	Tonnage	Grade	Contained		Tonnage	Grade	Contained
	Mt	g/t	M oz	Mt	g/t	M oz		Mt	g/t	M oz
SILVER
Cozamin	0.6	81.5	1.5	1.0	54.9	1.8	1.6		64.3	3.3

Inferred Resources Attributable to Silver Wheaton (1,2,3,4,5,9,15,16)
As of December 31, 2009 unless otherwise noted (6)	INFERRED
	Tonnage	Grade	Contained
	Mt	g/t	M oz
SILVER
Cozamin
Copper	2.4	52.6	4.0
Zinc	1.7	30.1	1.6

More Information 

For further information about the Cozamin mine, please visit Capstone Mining Corp.’s website at www.capstonemining.com.