Capstone Board Approves Shareholder Rights Plan

Plan is Not in Response to any Proposals and is Not Intended to Deter Equitable Transactions

VANCOUVER, Sept. 16 /CNW/ - Capstone Mining Corp. (CS: TSX) reports that, although it is not aware of any pending or threatened take-over initiatives directed at the Company, Capstone's Board of Directors today approved the adoption of a Shareholder Rights Plan ("Rights Plan"). The Rights Plan is subject to the approval of the Toronto Stock Exchange and will terminate if it is not approved by a majority of Capstone's shareholders at a meeting held within six months from today.

The purpose of the Rights Plan is to provide shareholders and the Capstone Board of Directors with adequate time to consider and evaluate any unsolicited bid made for Capstone, to provide the Board with adequate time to identify, develop and negotiate value-enhancing alternatives (if considered appropriate) to any such unsolicited bid, to encourage the fair treatment of shareholders in connection with any takeover bid for Capstone and to ensure that any proposed transaction is in the best interests of Capstone's shareholders.

"The Rights Plan is designed to ensure that all shareholders receive equitable treatment in the event of a transaction that could lead to the change of control of the Company and is not intended to deter take-over proposals," said Darren Pylot, Chief Executive Officer of Capstone.

Effective September 16, 2010, rights were issued and attached to all Capstone common shares. A separate rights certificate (a "Right") will not be issued until such time as the rights become exercisable (which is referred to as the "separation time"). The Rights will become exercisable only if a person, together with its affiliates, associates and joint actors, acquires or announces its intention to acquire beneficial ownership of shares, which when aggregated with its current holdings total 20% or more of the outstanding Capstone common shares (determined in the manner set out in the Rights Plan), other than by a Permitted Bid (as defined in the Rights Plan). Following the acquisition of more than 20% of the Capstone outstanding common shares by any person (and its affiliates, associates and joint actors), except for a Permitted Bid, each right held by a person other than the acquiring person (and its affiliates, associates and joint actors) would, upon exercise, entitle the holder to purchase Capstone's common shares at a substantial discount to their then prevailing market price.

A copy of the Rights Plan is available by contacting the Company by telephone [phone], by facsimile (604 688-2180), or by mail to Capstone Mining Corp., Suite 900, 999 West Hastings Street, Vancouver, British Columbia, V6C 2W2, Attention: John Kim. A copy will be available on SEDAR at www.sedar.com.

About Capstone

Capstone is a Canadian based copper producer with two operations, the Cozamin and Minto mines, that are forecast to produce 80-85 million pounds of copper in 2010 at a total cash cost, net of by-product credits, of US$1.10 to US$1.20 per pound of payable copper, as well as the high grade Kutcho copper-zinc project, which is being advanced towards a production decision. As reported on August 10, 2010, Capstone has a strong balance sheet with cash on hand of US$151.6 million (including US$10.8 million of restricted cash) and liquid investments of US$18.1 million as of June 30, 2010.

Forward-Looking Statements

This document 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. (the "Company") does not intend, and does not assume any obligation, to update these forward-looking statements.

Forward-looking statements relate to future events or future performance and reflect Company management's expectations or beliefs regarding future events and include, but are not limited to, statements with respect to the effect of the Rights Plan, estimation of mineral reserves and mineral resources, the realization of mineral reserve estimates, the timing and amount of estimated future production, costs of production, capital expenditures, success of mining operations, environmental risks, unanticipated reclamation expenses, title disputes or claims and limitations on insurance coverage. In certain cases, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "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. By their very nature forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among others, risks related to actual results of current exploration activities; changes in project parameters as plans continue to be refined; future prices of mineral resources; possible variations in ore reserves, grade or recovery rates; accidents, labour disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing or in the completion of development or construction activities; as well as those factors detailed from time to time in the Company's interim and annual financial statements and management's discussion and analysis of those statements, all of which are filed and available for review on SEDAR at www.sedar.com.

Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements.

Accordingly, readers should not place undue reliance on forward-looking statements.

For further information: Darren Pylot, Vice Chairman & CEO, Stephen Quin, President; Or Investor Relations' Zobeida Slogan at [phone] or [phone]; Or e-mail Capstone at [email protected]