VANCOUVER, May 20, 2011 /PRNewswire/ – Capstone Mining Corp. (“Capstone” or the
“Company”) (TSX: CS) announces the mailing of its Information
Circular’s with respect to the previously announced arrangement
agreement (the “Arrangement Agreement”) pursuant to which Capstone will
acquire all of the issued and outstanding common shares of Far West
Mining Ltd. (“Far West”) (TSX:FWM) and Far West would be held through a
newly-formed subsidiary of Capstone, to be owned 70% by Capstone and
30% by Korea Resources Corporation (“KORES”).

Far West shareholders will be entitled to elect to receive, in exchange
for each Far West share held, (i) 1.825 shares of Capstone and C$1.00
in cash, or (ii) 2.047 shares of Capstone and C$0.001 in cash, or (iii)
C$9.19 cash, subject to proration on the basis of an aggregate maximum
cash amount of approximately up to C$79 million and provided that no
Far West shareholder that elects option (iii) above will receive less
than C$1.00 in cash per Far West share.

Shareholders of Capstone and securityholders of Far West will each vote
on the Arrangement Agreement at special meetings to be held
concurrently on June 13, 2011 and if it is approved at both meetings,
the proposed transaction is expected to become effective on or about
June 16, 2011. The directors, senior officers, Quadra FNX and certain
other shareholders of Far West, representing 38% of the filly-diluted
Far West shares outstanding as at May 11, 2011, have entered into
voting support agreements with Capstone, whereby they have agreed to
vote their Far West shares in favor of the Arrangement Agreement.
Capstone’s directors and senior management have entered into voting
support agreements to vote their Capstone shares in favour of the
Arrangement Agreement and Capstone’s largest shareholder, Pala
Investments Holding Limited, holding 19.6% of Capstone’s issued and
outstanding shares as at May 13, 2011, has advised Capstone management
that it intends to vote its Capstone shares in favor of the Arrangement
Agreement.

Capstone has also agreed to form a long-term strategic partnership with
KORES for the development of Far West’s Santo Domingo Project.
Concurrent with the completion of the Arrangement Agreement, KORES
(through an affiliated company) will (i) acquire a 30% interest in the
entity that will own the Santo Domingo project for cash consideration
of up to approximately C$210 million to Capstone, and (ii) subscribe
for an approximate 11% interest in Capstone, at a price of C$4.35 per
share, for aggregate cash consideration of approximately C$170-183
million subject to completion of the Far West transaction.

Full details of the proposed transaction are contained in the
Information Circular that has been mailed to Capstone shareholders. A
copy of the Information Circular and related documentation has been
filed with Canadian securities regulators and is available at the SEDAR
website at www.sedar.com under Capstone’s profile.

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.

Forward-looking statements relate to future events or future performance
and reflect Capstone management’s expectations or beliefs regarding
future events and include, but are not limited to, statements with
respect to the timing and implementation of the proposed transaction
and the integration of Capstone and Far West following the transaction.
Assumptions upon which such forward-looking statements are based
include that Capstone and Far West will be able to satisfy the
conditions in the Arrangement Agreement, that the required approvals
will be obtained from the shareholders of each of Capstone and Far
West, that all third party, court, regulatory and governmental
approvals to the transaction will be obtained, tax treatment of the
transaction and that all other conditions to completion of the
transaction will be satisfied or waived. Many of these assumptions are
based on factors and events that are not within the control of Capstone
and there is no assurance they will prove to be correct.

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”, “potential”, “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 Capstone 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 and development activities; changes in
project parameters as plans continue to be refined; future prices of
metals; possible variations in mineral 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 Capstone’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 Capstone 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. Capstone provides 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.

SOURCE Capstone Mining Corp.