Capstone Copper Corp. - Management Reports 2023

1.0 BUSINESS OVERVIEW......................................................................................................... 4 2.0 Q4 2022 HIGHLIGHTS & SIGNIFICANT ITEMS ............................................................... 5 3.0 OPERATIONAL REVIEW....................................................................................................... 13 4.0 FINANCIAL REVIEW .............................................................................................................. 22 5.0 ALTERNATIVE PERFORMANCE MEASURES ................................................................. 35 6.0 SELECTED QUARTERLY FINANCIAL INFORMATION................................................... 47 7.0 OUTSTANDING SHARE DATA & DILUTION CALCULATION......................................... 47 8.0 MANAGEMENT'S REPORT ON INTERNAL CONTROLS............................................... 47 9.0 NATIONAL INSTRUMENT 43-101 COMPLIANCE............................................................ 48 10.0 RISKS AND UNCERTAINTIES ............................................................................................. 48

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF CAPSTONE COPPER CORP. FOR THE YEAR ENDED DECEMBER 31, 2022

Capstone Copper Corp. (“Capstone Copper” or the “Company” or "we") has prepared the following management’s discussion and analysis (the “MD&A”) as of February 17, 2023 and it should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the year ended December 31, 2022. All financial information has been prepared in accordance with International Financial Reporting Standards (“IFRS”) and all dollar amounts presented are United States (“US”) dollars unless otherwise stated. “C$” refers to Canadian dollars.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION

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 the Company does not intend, and does not assume any obligation, to update these forwardlooking 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 and the impacts of the ongoing and evolving COVID-19 pandemic and the evolving geopolitical environment. Forward-looking statements include, but are not limited to, statements with respect to the execution of our future growth projects, our financial liquidity and development of our projects, the estimation of Mineral Resources and Mineral Reserves, the success of the underground paste backfill and tailings filtration projects at Cozamin, the timing and cost of the construction of the paste backfill and dry stack tailings plant at Cozamin, the success and timing of the Mantos Blancos Concentrator Debottlenecking Project , the timing and cost of the Mantoverde Development Project , the timing and results of the PV4 study, the expected reduction in capital requirements for the Santo Domingo project, the timing and success of the Cobalt Study for Santo Domingo, the timing and results of the integrated plan for Mantoverde - Santo Domingo, the realization of Mineral Reserve estimates, the timing and amount of estimated future production, the costs of production and capital expenditures and reclamation, the budgets for exploration at Cozamin, Santo Domingo, Pinto Valley, Mantos Blancos, Mantoverde and other exploration projects, the timing and success of the Copper Cities project, the success of our mining operations, the continuing success of mineral exploration, the estimations for potential quantities and grade of inferred resources and exploration targets, our ability to fund future exploration activities, our ability to finance the Santo Domingo project and other current or future projects and expansions, environmental risks, unanticipated reclamation expenses and title disputes, the success of the synergies and catalysts related to prior transactions, and the anticipated future production, costs of production, including the cost of sulphuric acid and oil and other fuel, capital expenditures and reclamation of the Company's operations and development projects and the risks included in our continuous disclosure filings on SEDAR at www.sedar.com. The potential effects of the COVID-19 pandemic on our business and operations are unknown at this time, including Capstone Copper’s ability to manage challenges and restrictions arising from COVID-19 in the communities in which Capstone Copper operates and our ability to continue to safely operate. The impact of COVID-19 to Capstone Copper is dependent on a number of factors outside of our control and knowledge, including the effectiveness of the measures taken by public health and governmental authorities to combat the spread of the disease, global economic uncertainties and outlook due to the disease, supply chain delays resulting in lack of availability of supplies, goods and equipment, and evolving restrictions relating to mining activities and to travel in certain jurisdictions in which we operate.

In certain cases, forward-looking statements can be identified by the use of words such as “anticipates”, “approximately”, “believes”, “budget”, “estimates”, expects”, “forecasts”, “guidance”, intends”, “plans”, “scheduled”, “target”, or variations of such words and phrases, or statements that certain actions, events or results “be achieved”, “could”, “may”, “might”, “occur”, “should”, “will be taken” or “would” or the negative of these terms or comparable terminology. In this document certain forward-looking statements are identified by words including “anticipated”, “expected”, “guidance” and “plan”. 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 Copper’s ability to acquire properties for growth, counterparty risks associated with sales of our metals, use of financial derivative instruments and associated counterparty risks, foreign currency exchange rate fluctuations, market access restrictions or tariffs, changes in general economic conditions, availability and quality of water, 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 and potential legal challenges to permit applications, contractual risks including but not limited to, our ability to meet the completion test requirements under the Cozamin Silver Stream Agreement with Wheaton Precious Metals Corp. ("Wheaton"), our ability to meet certain closing conditions under the Santo Domingo Gold Stream Agreement with Wheaton, acting as Indemnitor for Minto Metals Corp.’s surety bond obligations post divestiture, impact of climate change and changes to climatic conditions at our operations and projects, changes in regulatory requirements and policy related to climate change and greenhouse gas ("GHG") emissions, land reclamation and mine closure obligations, aboriginal title claims and rights to consultation and accommodation, risks relating to widespread epidemics or pandemic outbreak including the COVID-19 pandemic; the impact of COVID-19 on our workforce, risks related to construction activities at our operations and development projects, suppliers and other essential resources and what effect those impacts, if they occur, would have on our business, including our ability to access goods and supplies, the ability to transport our products and impacts on employee productivity, the risks in connection with the operations, cash flow and results of Capstone Copper relating to the unknown duration and impact of the COVID-19 pandemic, impacts of inflation, geopolitical events and the effects of global supply chain disruptions, uncertainties and risks related to the potential development of the Santo Domingo project, risks related to the Mantos Blancos Concentrator Debottlenecking Project and the Mantoverde Development Project, increased operating and capital costs, increased cost of reclamation, challenges to title to our mineral properties, increased taxes in jurisdictions the Company operates or is subject to tax, changes in tax regimes we are subject to and any changes in law or interpretation of law may be difficult to react to in an efficient manner, maintaining ongoing social licence to operate, seismicity and its effects on our operations and communities in which we 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 input costs such as those related to sulphuric acid, electricity, fuel and supplies, increasing inflation rates, competition in the mining industry including but not limited to competition for skilled labour, risks associated with joint venture partners and non-controlling shareholders or associates, our ability to integrate new acquisitions and new technology into our operations, cybersecurity threats, legal proceedings, the volatility of the price of the common shares, the uncertainty of maintaining a liquid trading market for the common shares, risks related to dilution to existing shareholders if stock options or other convertible securities are exercised, the history of Capstone Copper with respect to not paying dividends and anticipation of not paying dividends in the foreseeable future and sales of common shares by existing shareholders can reduce trading prices, 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 and Annual Information Form, 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 forwardlooking 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.

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1.0 BUSINESS OVERVIEW

The accompanying consolidated financial statements have been prepared as at December 31, 2022, after giving effect to the business combination of Capstone Mining Corp. ("Capstone Mining") and Mantos Copper (Bermuda) Ltd. (“Mantos”), which was completed on March 23, 2022 (the "Transaction"). Mantos is the legal acquirer of Capstone Mining, and after the Transaction, the combined entity changed its name to Capstone Copper Corp. The Company is listed on the Toronto Stock Exchange ("TSX").

Mantos was incorporated on August 15, 2015, and migrated to British Columbia, Canada on March 22, 2022 as part of the Transaction. Mantos (now Capstone Copper) has owned and operated two mines in Chile since 2015. The Mantos Blancos open-pit mine is located 45 kilometers northeast of the city of Antofagasta and the 70%owned Mantoverde open-pit mine is located 50 kilometers southeast of the town of Chañaral.

Since completion of the Transaction on March 23, 2022, Capstone Copper, through its wholly owned Capstone Mining subsidiary, also owns two mines in the US and Mexico. Pinto Valley Mining Corp. (“Pinto Valley”), a wholly owned US subsidiary, owns and operates the Pinto Valley mine located in Arizona, US. Capstone Gold, S.A. de C.V. (“Capstone Gold”), a wholly owned Mexican subsidiary, owns and operates the Cozamin Mine located in Zacatecas, Mexico, and has a portfolio of exploration properties in Mexico. Capstone Mining Chile SpA, a wholly owned Chilean subsidiary, is performing exploration for base metal deposits in Chile. Capstone Copper is an Americas-focused copper mining company headquartered in Vancouver, Canada.

On March 24, 2021, Capstone Mining consolidated a 100% ownership interest in 0908113 B.C. Ltd. (“Acquisition Co.”) by purchasing the remaining 30% ownership interest from Korea Resources Corporation (“KORES”), resulting in the elimination of the non-controlling interest (“NCI”) in Acquisition Co. Minera Santo Domingo SCM, a wholly owned Chilean subsidiary of Acquisition Co, holds the Santo Domingo copper-iron development project in Chile.

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2.0 Q4 2022 HIGHLIGHTS AND SIGNIFICANT ITEMS

2022 Annual and Q4 2022 Financial and Operational Highlights

Net income of $136.1 million, or $0.20 per share, for 2022, and net loss of $28.4 million, or $(0.03) per share for Q4 2022.
Adjusted net income[1] of $84.5 million, or $0.14 per share for 2022, and $52.9 million or $0.06 per share for Q4 2022 . Q4 2022 is down $20.3 million, or $0.12 per share, compared to the same quarter last year due to a lower copper price and inflationary pressure on costs.
Adjusted EBITDA[1 ] of $352.8 million for 2022 compared to $432.2 million for 2021. Adjusted EBITDA[1 ] of $80.5 million for Q4 2022, which includes a realized provisional pricing loss of $7.8 million relating to Q3 and Q2, compared to Adjusted EBITDA[1] of $113.3 million in Q4 2021. The decrease in Adjusted EBITDA[1] is driven by a lower realized copper price and inflationary pressure on costs, particularly sulphuric acid and diesel fuel costs.
Operating cash flow before changes in working capital of $99.4 million in Q4 2022 compared to $104.9 million in Q4 2021.
Achieved production and cost guidance for the period from April 1, 2022 to December 31, 2022, with consolidated copper production of 136.3 thousand tonnes at C1 cash costs[1] of $2.68/lb. Consolidated copper production for Q4 2022 of 45.5 thousand tonnes at C1 cash costs[1] of $2.50/lb of copper produced for Q4 2022, which consisted of 15.0 thousand tonnes at Pinto Valley, 5.8 thousand tonnes at Cozamin, 14.2 thousand tonnes at Mantos Blancos, and 10.5 thousand tonnes at Mantoverde.
Total available liquidity[1] of $697 million as at December 31, 2022 , composed of $172 million of cash and short-term investments, and $525 million of undrawn amounts on corporate revolving credit facility which was expanded during the fourth quarter to $600 million.
Mantos Blancos Concentrator Debottlenecking Project ("MB-CDP") completed ramp up to commercial production in December, 2022.
MVDP remains on budget and on schedule . Construction is progressing well on all key areas of the project. Total project spend inception-to-date was approximately $579 million at the end of December 2022 on a total budget of $825 million.
Mantoverde - Santo Domingo ("MV-SD") District Integration Plan was presented during Q4 2022 outlining the approach Capstone is taking to maximize value creation (including synergies) across the district.

1 These are alternative performance measures. Refer to the MD&A section entitled “Alternative Performance Measures”.

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Operating Highlights

Operating Highlights	Operating Highlights
Q4 2022 Q4 2021 2022 2021
Copper production (000s tonnes)
*Sulphides business* Pinto Valley 15.0 16.8 56.8 60.5 Cozamin 5.8 6.6 24.5 24.4 Mantos Blancos 10.0 — 29.0 —
*Total sulphides* 30.8 23.4 110.3 84.9
*Cathode business* Mantos Blancos 4.2 — 12.2 — Mantoverde2 10.5 — 36.3 —
*Total cathodes* 14.7 — 48.5 —
Consolidated 45.5 23.4 158.8 84.9
Copper sales
Copper sold (000s tonnes) 44.7 21.2 159.9 81.1 Realized copperprice1 ($/pound) 3.74 4.61 3.76 4.42
C1 cash costs 1	($/pound) produced
*Sulphides business* Pinto Valley 2.48 2.00 2.63 2.16 Cozamin 1.40 0.99 1.24 0.96 Mantos Blancos 1.82 — 2.16 —
*Total sulphides* 2.07 1.72 2.20 1.81
*Cathode business* Mantos Blancos 2.69 — 3.41 — Mantoverde 3.65 — 3.63 —
*Total cathodes* 3.37 — 3.58 —
Consolidated 2.50 1.72 2.63 1.81

2 Mantoverde production shown on a 100% basis.

Consolidated

Q4 2022 copper production of 45.5 thousand tonnes was higher than Q4 2021 primarily as a result of including production for the Mantos Blancos and Mantoverde mines.

2022 consolidated production of 158.8 thousand tonnes of copper is higher than the 84.9 thousand tonnes in 2021, primarily as a result of the addition of Mantos Blancos and Mantoverde production. Consolidated production for the nine month period from April 1, 2022 to December 31, 2022 of 136.3 thousand tonnes was within the guidance range.

Q4 2022 C1 cash costs[1] of $2.50/lb and 2022 C1 cash costs[1] of $2.63/lb are a mix of sulphide and cathode business units compared to 2021 which was predominately sulphide production. Consolidated C1 cash costs[1] are within the guidance range of $ 2.55 to $2.70 per pound payable copper.

Cathode production is from copper oxide ore that requires sulphuric acid leaching, solvent extraction and electrowinning (SX-EW) to produce copper cathodes which are a finished copper product for the market. Average sulphuric acid prices of $271 per tonne for the Company's cathode business unit in 2022 represented an historic high, and thus negatively impacted cash costs. Sulphide production requires a mill that utilizes a grinding and flotation process to recover sulphide minerals in a copper concentrate saleable as an intermediate product to smelters and refiners. Capstone's low-cost sulphide production is growing significantly with the Mantoverde Development Project to be completed late in 2023.

1 These are alternative performance measures. Refer to the MD&A section entitled “Alternative Performance Measures”.

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Consolidated Financial Highlights

($ millions, except per share
data)	Q4 2022	Q4 2021	2022	2021	2020
Revenue	362.1	215.9	1,296.0	794.8	453.8
Net (loss) income	(28.4)	41.4	136.1	252.9	12.4
Net (loss) income attributable
to shareholders	(20.9)	41.4	122.2	226.8	12.6
Net (loss) income attributable to
shareholders per common
share - basic ($)	*(0.03)*	0.10	*0.20*	0.56	0.03
Net (loss) income attributable to
shareholders per common
share - diluted ($)	*(0.03)*	0.10	*0.19*	0.55	0.03
Operating cash flow before
changes in working capital2	99.4	104.9	224.4	556.3	131.2
Adjusted EBITDA1	80.5	113.3	352.8	432.2	139.2
Adjusted net income1	52.9	73.2	84.5	241.6	26.4
Adjusted net income
attributable to shareholders1	40.8	73.2	85.6	242.1	26.4
Adjusted net income attributable
to shareholders per common
share - basic	*0.06*	0.18	*0.14*	0.60	0.07
Adjusted net income attributable
to shareholders per common
share - diluted	*0.06*	0.18	*0.14*	0.58	0.07
Realized copper price1
($/pound)	3.74	4.61	3.76	4.42	2.99
Net (debt) / cash1	(483.1)	264.4	(483.1)	264.4	(124.9)
Attributable net (debt) / cash1	(339.9)	264.4	(339.9)	264.4	(125.6)
Total assets	5,380.9	1,728.0	5,380.9	1,728.0	1,391.6
Total non-current financial
liabilities	709.5	38.4	709.5	38.4	183.6

2 2021 includes $180.0 million silver and gold stream proceeds

Mantos and Capstone Mining Transaction

On November 30, 2021, Capstone Mining announced it had entered into a definitive agreement (the "Agreement") with Mantos to combine, pursuant to a plan of arrangement.

The Transaction was completed on March 23, 2022 and the combined company was renamed Capstone Copper Corp. Capstone Copper is headquartered in Vancouver, B.C. and listed on the TSX. Pursuant to the Agreement, each Capstone Mining shareholder received one newly issued Capstone Copper share per Capstone Mining share (the "Exchange Ratio") and the existing Mantos shareholders maintained their Capstone Copper shares. At

1 These are alternative performance measures. Refer to the MD&A section entitled “Alternative Performance Measures”.

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completion of the Transaction, former Capstone Mining and Mantos shareholders collectively owned approximately 60.75% and 39.25% of Capstone Copper, respectively, on a fully-diluted basis. Refer to the business combination note in the consolidated financial statements.

Following completion of the Transaction, Capstone Copper operates four mines, including two mines run by Mantos Copper in Chile since 2015: The Mantos Blancos (100% owned) open-pit copper mine is located 45 kilometers northeast of Antofagasta in the Antofagasta Region and produces copper concentrate and copper cathodes. The Mantoverde (70% owned) open-pit mine is located 50 kilometers southeast of Chanaral, in the region of Atacama and produces copper cathodes. Mantoverde is the site of the MVDP sulphide expansion, currently in construction.

The new Capstone Copper has a broad portfolio of (largely permitted) brownfield projects located at our sites that facilitate disciplined capital allocation and a phased approach to growth.

Mantoverde Development Project

Construction of the MVDP located at the existing Mantoverde (oxide) operation continues to progress well. The MVDP is expected to enable the mine to process 235 million tonnes of copper sulphide reserves over a 20-year expected mine life, in addition to existing oxide reserves. The MVDP involves the addition of a sulphide concentrator (12.3 million tonnes per year) and tailings storage facility, and the expansion of the existing desalination plant.

Upon completion, the Company expects the MVDP to increase production from approximately 36,000 to 40,000 tonnes of copper (cathodes only) in our current guidance for 2023 to ~110,000 to 120,000 tonnes of copper (copper concentrate and cathodes) post project completion. In parallel, C1 cash costs[1] are expected to decrease from $3.50/lb to $3.70/lb in the current guidance for 2023 to below $2.00/lb after project completion and ramp up. The decline in expected costs will be driven by the mine's transition to becoming a primary producer of copper concentrate. Upon completion of the MVDP, approximately 75% of Mantoverde's production will come from the lower-cost sulphide copper. The mine will also benefit from the production of approximately 31,000 ounces of gold per year that will generate by-product credits.

MVDP is progressing under a lump-sum turn-key engineering, procurement, and construction (EPC) contract with Ausenco Limited, a multi-national EPC management company, with broad international experience in the design and construction of copper concentrator projects of this scale in the international market. The execution plan includes a Capstone Copper owner’s team working with the contractors during the execution phase.

The Mantoverde Development Project is progressing well and remains on track for commissioning and feeding first ore to the mill in late 2023. Areas of focus in Q4 2022 were:

Assembly and commissioning of the second electric rope shovel with commissioning of a third shovel planned for mid-Q1 2023;
Critical equipment such as the SAG and ball mill shells, flotation cells, conveyor belts, components, and others, are already arrived at site; and
Structural and mechanical assembly in the primary crusher, grinding, flotation, and tailings thickener area are in progress as planned.

As of December 31, 2022, the cost of the different components of the project, including the lump-sum turnkey EPC, continue on track and on target. The total project capital remains at $825 million and inception-to-date project spend, excluding finance costs, totals $579 million.

The majority of the total project capital cost of $825 million is fully encompassed by the turn-key contract with Ausenco. The EPC contract total budget is approximately $525 million of which $359 million has been spent as of December 31, 2022. In addition, major mining equipment for approximately $140 million was price fixed prior to the elevated inflationary pressures observed this year.

A virtual tour of the project can be viewed at https://admin.vrify.com/decks/12698

1 These are alternative performance measures. Refer to the MD&A section entitled “Alternative Performance Measures”.

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Mantos Blancos Concentrator Debottlenecking Project

The MB-CDP was completed in 2022 which increased throughput capacity at the sulphide concentrator plant from 11,000 tonnes per day ("tpd') to 20,000 tpd (or from 4.2 million tonnes per year to 7.3 million tonnes per year). MB-CDP completed ramp up to commercial production in December.

Mantos Blancos Phase II

Mantos Blancos is currently evaluating the potential to increase throughput of the Mantos Blancos sulphide concentrator plant from 7.3 million tonnes per year to 10.0 million tonnes per year using existing underutilized ball mills and process equipment. As part of the Mantos Blancos Phase II Project, we are also evaluating the potential to extend the life of copper cathode production. The Mantos Blancos Phase II feasibility study is expected to be released in H2 2023, and the environmental DIA application was submitted in August 2022.

Mantoverde Phase II

Mantoverde is currently analyzing the next expansion of the sulphide concentrator. Capstone has identified that the major components of the comminution and flotation circuits of the Mantoverde Development Project are capable of throughput capacities higher than the 32,000 tonnes per day design, and an engineering study is being initiated to identify the upstream and downstream debottlenecking costs associated with the potential increase in nameplate capacity. Given the above, the Mantoverde Phase II study will now evaluate the addition of an entire second processing line, possibly a duplication of the first line, to process some of the additional 77% of resources not utilized by the optimized MVDP. A conceptual study is being prepared in Q1 2023 and pending positive results will be incorporated into a feasibility study targeted for H2 2023.

Santo Domingo

Since closing the Transaction, the Santo Domingo team has been integrated into the larger Capstone Copper team in Chile. The integrated project team was initially focused on identifying and evaluating the optimal integrated development plan for the Mantoverde - Santo Domingo district. The Mantoverde operation is located approximately ~35km southwest of the Santo Domingo project. In consideration of the Integration Plan submitted by the Company on November 10th, activities to better understand the full potential of the synergies and to maximize the outcome for the company through a optimized flowsheet are ongoing and a 2023 work plan has been developed to take advantage of the synergies associated with the proximity of Santo Domingo to the existing Mantoverde operation, existing infrastructure (including a desalination plant, roads, power, and pipelines), and integration of other assets, such as the Santo Domingo port. The outcomes of all of this are expected to be incorporated into an updated Santo Domingo feasibility study in H2 2023.

Mantoverde - Santo Domingo District Integration Plan

The Company is focused on creating a world-class mining district in the Atacama region of Chile, targeting over 200,000 tonnes per year of low-cost copper production with the potential to also become one of the largest and lowest cost battery grade cobalt producers in the world. The Company has the opportunity to unlock a total of $80-100 million per year in operating cost synergies, while also enabling additional copper and cobalt production, infrastructure capital savings, and the potential for significant tax synergies.

The district integration synergies include the following:

Water and Power Infrastructure – a plan to expand the existing Mantoverde desalination plant to 840 litres per second, utilization of existing water pipelines, and upgraded energy transmission capacity provides the infrastructure for Santo Domingo.
Port Infrastructure – opportunity to reduce Mantoverde’s concentrate trucking costs by $10 million per year by using the planned Santo Domingo port, located 65 kilometres from Mantoverde.
Integrated Operations – potential to lower district operating costs by $20-30 million by streamlining the organizational chart across both operations, increasing purchasing power given district scale, and standardizing equipment to promote productivity gains.
Santo Domingo Oxides – potential addition of 8,000-10,000 tpa of copper production over the first 10 years of production, by leaching copper oxides at Santo Domingo and processing the concentrated solutions at Mantoverde’s underutilized SX-EW facility. The potential increase in production is expected to come from Santo Domingo’s oxide mineralization, much of which is in the pre-strip, providing an operating cost advantage.
Cobalt Opportunity – ability to reduce operating costs by approximately $45 million per year by building the cobalt and sulphuric acid production facility at Mantoverde that will process cobaltiferous pyrite

1 These are alternative performance measures. Refer to the MD&A section entitled “Alternative Performance Measures”.

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produced by both Mantoverde and Santo Domingo. The benefits would be realized through the neutralization of a weak acid by-product stream from the cobalt operation at the Mantoverde heap and dump leach operation, as well as through the elimination of port and trucking costs related to sulphuric acid use at Mantoverde.

Withholding Tax – Potential to realize tax synergies between $150-200 million by re-investing cash flows to support our overall growth plan in Chile.

Mantoverde - Santo Domingo Cobalt Feasibility Study

A district cobalt plant for Mantoverde - Santo Domingo may also unlock cobalt production from Mantoverde while producing a by-product of sulphuric acid which can then be consumed internally to further significantly lower operating costs in the leaching process at Mantoverde.

The cobalt recovery process consists of a concentration step, an oxidation step, and a cobalt recovery step. The concentration step considers a conventional froth flotation circuit treating copper flotation tails to produce a cobaltiferous pyrite concentrate. For the base case, the pyrite concentrate, which contains between 0.5% and 0.7% Co, is oxidized in a fluidized bed roaster to produce a cobalt calcine and a concentrated sulphuric acid byproduct. The calcine is then subjected to various leaching, precipitation, solvent extraction and crystallization steps to produce battery grade cobalt sulphate heptahydrate. Capstone is also evaluating alternatives that may include the direct sale of some or all the cobalt as intermediate product, such as mixed hydroxide precipitate, to a partner, joint venture or an independent third-party refiner. At a combined MV-SD target of 6.0 to 6.5 thousand tonnes of cobalt production per year, this would be one of the largest and lowest cost cobalt producers in the world. Additional benefits of this project include the generation of carbon-free energy from waste heat emitted by the roaster, and the production of by-product sulphuric acid which can be used for heap or dump leaching to produce low-cost copper cathodes at Mantoverde, Mantos Blancos, or sold to other consumers within the district. Exploratory test-work has started at Mantoverde to confirm suitability of the Santo Domingo cobalt circuit flowsheet to process an integrated cobaltiferous pyrite feed.

Capstone is also examining the early production of cobalt from Mantoverde by oxidizing a pyrite concentrate from MVDP directly in the copper heap leach facilities. The pyrite concentrate would be recovered from MVDP waste streams and added to the oxide heap leach feed agglomerate drums. The pyrite would oxidize in the heap, producing by-product sulfuric acid in situ and solubilizing a significant fraction of the cobalt. A bleed stream containing cobalt in solution will then then be directed to a recovery plant consisting of various steps of impurity removal, continuous ion exchange, and hydroxide precipitation to produce a cobalt hydroxide precipitate. It is believed that this approach would require significantly less capital expenditure and could potentially accelerate the production of cobalt from the district. Test work will commence in Q1 2023 and a conceptual study will be available near the end of H2 2023.

PV4 Study

During the quarter, work progressed on the feasibility study ("FS") for PV4 which aims to maximize the conversion of approximately one billion tonnes of mineral resources to mineral reserves, significantly extending Pinto Valley’s mine life and increasing the mine’s copper production profile. The PV4 study is focused on an expansion of existing mill throughput and tailings impoundment facility, improvements to the metal recovery processes, and an extension of the life of mine. It is expected to be released in H1 2023 and considers the following process enhancements:

A new tailings dam, TSF5, that would improve tailings water recovery while accommodating a longer mine life.
Pyrite leach enhancement, with strong positive environmental, social and governance ("ESG") implications as it would divert acid-generating minerals including pyrite and chalcopyrite from tailings to the dump leach operation. Additional copper recovery and lower costs via the generation of acid would be key economic drivers for this project.
Ball mill circuit upgrades, including ball mill shell replacements, motor upgrades, cyclone feed pump and cluster upgrades, and process control upgrades.
Flotation circuit upgrades, including froth cameras on primary rougher banks, variable-speed drives on key slurry pumps, and potentially additional flotation capacity.
Plant upgrades, including additional flotation capacity and process control in the molybdenum plant.

1 These are alternative performance measures. Refer to the MD&A section entitled “Alternative Performance Measures”.

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Corporate Exploration Update

Cozamin: The focus during Q4 2022 was on testing the Mala Noche Main Vein West Target with one underground rig from the west exploration crosscut station. Since the 2021-2022 exploration program started, approximately 54,650 meters of drilling have been completed from 71 holes. A proposed lower elevation mine cross-cut will allow for expedited infill drilling in 2023 to inform an updated mineral resource estimate in 2024. Surface drill testing of other targets along strike from the San Roberto mine area continued in Q4 2022 with one rig with 573 meters drilled in 2 holes.

Copper Cities, Arizona : On January 20, 2022, Capstone Mining announced that it had entered into an 18-month access agreement with BHP Copper Inc. ("BHP") to conduct drill and metallurgical test-work at BHP's Copper Cities project ("Copper Cities"), located approximately 10 km east of the Pinto Valley mine. Drilling with two surface rigs twinning historical drill holes was completed in 2022 with metallurgical testing continuing into 2023.

Planalto, Brazil: Step-out drilling at the Planalto Iron Ore-Copper-Gold prospect in Brazil, under an earn-in agreement with Lara Exploration Ltd. ("Lara"), commenced in Q4 2021 and continued in Q4 2022. Lara is conducting the work and will report results when appropriate.

2.1 2023 Guidance

The Company expects to produce between 170,000 and 190,000 tonnes of copper at C1 cash costs[1] of between $2.50 and $2.70 per payable pound of copper produced.

Capstone’s 2023 operating and capital guidance is as follows:

	Copper Production	C1 Cash Costs1
	(‘000s tonnes)	(US$ per payable lb Cu
		Produced)
Sulphides Business
Pinto Valley	56.0 – 62.0	$2.40 – $2.60
Cozamin	23.0 – 25.0	$1.50 – $1.65
Mantos Blancos	45.0 – 51.0	$2.20 – $2.40
Total Sulphides	124.0 – 138.0	$2.15 – $2.35
Cathode Business
Mantos Blancos	10.0 – 12.0	$2.85 – $3.00
Mantoverde2	36.0 – 40.0	$3.50 – $3.70
Total Cathodes	46.0 – 52.0	$3.35 – $3.55

Consolidated Cu Production	170.0 – 190.0	$2.50 – $2.70

2 Mantoverde production shown on a 100% basis

Key C1 Cash costs[1] input assumptions:

CLP/USD: 800:1 MXN/USD: 20:1 Silver: $20/oz Molybdenum: $14/lb Gold: $1,700/oz

Consolidated C1 cash costs[1] are expected to decline in 2023 compared to 2022 due to an increased proportion of lower-cost copper production from concentrates versus higher-cost copper cathode. This will be driven primarily by increased throughput at the Mantos Blancos concentrator, after the completion of the ramp-up in 2022 of the Mantos Blancos Concentrator Debottlenecking Project. The decline in 2023 cathode production is a result of the anticipated grade decline in Mantoverde oxides. Helping to offset lower oxide grades are lower sulphuric acid prices, and we have secured over 70% of our 2023 requirement at prices in the $130 - $150 per tonne range, which is over $100 per tonne lower than the average price paid in 2022. Pinto Valley is expected to perform similarly year-over-year for production and costs.

1 These are alternative performance measures. Refer to the MD&A section entitled “Alternative Performance Measures”.

Page 11

C1 Cash costs[1] at the Cozamin mine are expected to increase to $1.50 to $1.65 per pound. Additional costs will be realized with the operation of the new paste backfill and dry stack tailings plant currently being commissioned and ramping up. We are also introducing cut-and-fill mining in certain areas of the mine this year. Some areas of the Mala Noche Footwall Zone will benefit from this change in mining method which will increase the realized mineral recovery in the mining process. A new technical report will be issued at the end of Q1 2023 outlining the incorporation of cut-and-fill to the mine plan. We anticipate that this method will provide future opportunity to convert more of the resource to the reserve and will provide a pathway to increase mine production in the future to better utilize the installed mill capacity of 4,400 tonnes per day. We intend to update the mine plan in 2024 to incorporate these improvement opportunities.

2023 Capital and Exploration Guidance

In 2023, the Company plans to spend a total of $400 million in sustaining[1] and expansionary[1] capital expenditures at its operating mines and the Santo Domingo Project. This is broken down into $140 million on sustaining capital and $260 million on expansionary capital, mainly related to the Mantoverde Development project. Pinto Valley sustaining capital is focused on bolstering process water availability and providing capacity for future tailings deposition.

	Pinto	Mantos	Manto-	Cozamin	Santo	Total
	Valley	Blancos	verde2		Domingo
Capital Expenditure($ millions)
Sustaining Capital1	70	20	25	25	-	140
ExpansionaryCapital1	5	-	225	5	25	260
Total Capital Expenditures	75	20	250	30	25	400

2 Mantoverde shown on a 100% basis

In addition, the Company plans to spend a total of $220 million in capitalized stripping at its three open pit mines.

	Pinto Valley Mantos Blancos Mantoverde2 Total
Capitalized Stripping ($ millions) 25 75 120 220

2 Mantoverde shown on a 100% basis

A portion of waste material mined at the Mantos Blancos and Mantoverde mines in 2023 is considered eligible for capitalization as a stripping asset under Capstone’s accounting policies. In the Mantoverde and Mantos Blancos technical reports dated November 29, 2021, the costs associated with mining this waste material were considered to be operating costs. Total mine movement has not increased compared to the technical reports, only the classification between operating costs and capitalized stripping.

Finally, the Company plans to spend $10 million in brownfield and greenfield exploration activities in 2023. The brownfield exploration is focused on resource conversion at Cozamin, Mantos Blancos and Mantoverde. The greenfield exploration relates to the high-grade Planalto project in Brazil.

	$ millions
Brownfield Exploration 6
Greenfield Exploration 4
Total Exploration 10

1 These are alternative performance measures. Refer to the MD&A section entitled “Alternative Performance Measures”.

Page 12

3.0 OPERATIONAL REVIEW

3.1 Pinto Valley Mine – Miami, Arizona Operating Statistics

3.1 Pinto Valley Mine – Miami, Arizona Operating Statistics
2022 Q1 Q2 Q3 Q4 Total	2021 Q1 Q2 Q3 Q4 Total
Production(contained)2 Copper in Concentrate (tonnes) 13,716 12,778 13,428 14,300 54,222 Cathode(tonnes) 636 556 719 711 2,622	15,988 12,899 13,192 16,196 58,275 527 497 538 622 2,184
Total Copper (tonnes) 14,352 13,334 14,147 15,011 56,844 Mining Waste (000s tonnes) 5,572 6,082 6,208 4,499 22,361 Ore(000s tonnes) 6,074 4,986 5,176 5,744 21,980	16,515 13,396 13,730 16,818 60,459 7,169 7,144 6,115 5,411 25,839 5,569 4,393 5,545 6,560 22,067
Total (000s tonnes) 11,646 11,068 11,384 10,243 44,341 Strip Ratio (Waste:Ore) 0.92 1.22 1.20 0.78 1.02 Processing Throughput (000s tonnes) 5,257 4,261 4,429 5,080 19,027 Tonnes per day 58,412 46,821 48,143 55,222 51,088 Grade (%)3 0.32 0.34 0.34 0.32 0.33 Recoveries (%)3 82.3 88.2 89.1 86.9 86.5 Payable copper produced (tonnes) 13,872 12,887 13,677 14,510 54,946 Copper C1 cash cost1($/ pound payable copper produced) 2.60 2.82 2.60 2.48 2.63 Adjusted EBITDA1($ millions) 71.1 48.1 16.7 32.0 167.9	12,738 11,537 11,660 11,971 47,906 1.29 1.63 1.10 0.82 1.17 5,229 4,474 4,517 5,380 19,600 58,095 49,170 49,100 58,481 53,700 0.36 0.33 0.33 0.37 0.35 85.6 88.6 88.0 81.8 85.7 15,956 12,945 13,268 16,250 58,419 1.94 2.33 2.44 2.00 2.16 88.3 82.5 35.9 74.3 281.0

2 Adjustments based on final settlements will be made in future quarters

3 Grade and recoveries were estimated based on concentrate production and may be impacted by settlements from prior production periods.

Q4-2022 vs Q4-2021 Insights

Copper production of 15.0 thousand tonnes in Q4 2022 was 11% lower than Q4 2021. Lower grades (Q4 2022 – 0.32% versus Q4 2021 - 0.37%) were offset partially by higher recoveries (Q4 2022 - 86.9% versus Q4 2021 - 81.8%). In addition, lower mill throughput during the quarter (Q4 2022 - 55,222 tpd versus Q4 2021 - 58,481 tpd) was a result of down time for a mill reline and lower ore supply from the pit due to low truck availability.

Q4 2022 C1 cash costs[1] of $2.48/lb in Q4 2022 were higher than Q4 2021 of $2.00/lb primarily due to lower production ($0.26/lb), increases in operating costs due to inflation ($0.23/lb) and treatment and refining costs ($0.05/lb), partially offset by higher capitalized stripping costs (-$0.12/lb).

YTD-2022 vs YTD-2021 Insights

2022 production was 6% lower than the same period last year primarily attributed to lower grades (2022 – 0.33% versus 2021 – 0.35%) and lower mill throughput (51,088 tpd in 2022 versus in 53,700 tpd 2021), partially offset by higher recoveries (2022 - 86.5% versus 2021 - 85.7%).

2022 C1 cash costs[1] of $2.63/lb were $0.47/lb higher compared to the same period last year of $2.16/lb primarily due to increased operating costs due to inflationary pressures on diesel, power, explosives, grinding media; and higher spend on rental equipment, mining equipment tools, contractors and dust suppression ($0.29/lb), lower production ($0.14/lb) and an increase in treatment and refining costs ($0.10/lb), partially offset by higher capitalized stripping costs (-$0.07/lb).

1 These are alternative performance measures. Refer to the MD&A section entitled “Alternative Performance Measures”.

Page 13

Capital Expenditures

Sustaining capital[1] in Q4 2022 of $27.2 million was spent primarily on mining equipment component replacements, mill feed wet scrubbers, investing in infrastructure upgrades that will increase water reclaim, tailings and environmental projects - including pond containment for contaminated storm water, mill water overflows and pipe leaks, peak well booster and tailings thickener pumping upgrades. Expansionary capital[1] in Q4 2022 of $1.7 million was primarily related to the PV4 studies. Deferred stripping increased in Q4 2022 compared to the same period last year as waste removal from the northwest section of phase 3 was started.

($ millions)	Q4 2022	Q4 2021	2022	2021
Deferred stripping	5.6	0.2	22.7	11.9
Sustaining capital1	27.2	11.9	78.2	43.8
Expansionary capital1	1.7	5.1	10.8	18.5
Right of use assets - non cash	1.5	—	1.5	8.7
Pinto Valleymine additions	36.0	17.2	113.2	82.9

1 These are alternative performance measures. Refer to the MD&A section entitled “Alternative Performance Measures”.

Page 14

3.2 Mantos Blancos – Antofagasta, Chile Operating Statistics

Operating Statistics
			2022
	Q14	Q2	Q3	Q4	Total
Production(contained metal and
cathode)2
Copper in Concentrate (tonnes)	704	8,685	9,593	9,975	28,957
Cathode(tonnes)	330	3,713	4,003	4,228	12,274
Total Copper (tonnes)	1,034	12,398	13,596	14,203	41,231
Mining
Waste (000s tonnes)	—	11,671	10,837	17,112	39,620
Ore(000s tonnes)	—	8,409	8,559	4,713	21,681
Total (000s tonnes)	—	20,080	19,396	21,825	61,301
Strip Ratio (Waste:Ore)	—	1.39	1.27	3.63	1.83
Stockpile(000s tonnes)	—	801	1,425	1,794	4,020
Total material moved (000s tonnes)	—	20,881	20,821	23,619	65,321
Mill operations
Tonnes per day	—	15,218	14,334	15,246	15,405
Grade (%)3	—	0.90	0.92	0.94	0.92
Recoveries (%)3	—	69.7	79.3	75.1	72.5
Dump operations
Throughput (000s tonnes)	—	3,138	2,680	4,128	9,946
Grade (%)3	—	0.18	0.16	0.19	0.18
Silver
Production contained (oz)	22	314	263	312	911
Payable copper produced (tonnes)	1,011	12,129	13,270	13,864	40,274
Sulphides C1 cash cost1($/pound payable
copper produced)	—	2.49	2.17	1.82	2.16
Cathode C1 cash cost1($/pound payable
copper produced)	—	3.67	3.87	2.69	3.41
Combined C1 cash cost1($/pound payable
copper produced)	3.33	2.85	2.68	2.09	2.54
Adjusted EBITDA1($ millions)	8.3	34.1	8.8	27.3	78.5

2 Adjustments based on final settlements will be made in future quarters

3 Grade and recoveries were estimated based on concentrate production and may be impacted by settlements from prior production periods. 4 Includes nine days (from March 23 to March 31, 2022)

Operational and C1 Cash Costs[1] Update

Sulphide and cathode copper production in Q4 2022 was 14.2 thousand tonnes. Q4 2022 throughput of 15,246 tpd was 6% higher than the previous quarter due to MB-CDP ramping up during the quarter and a higher mill feed grade of 0.94% versus 0.92% in Q3. 2022 copper production was 41.2 thousand tonnes.

The ramp-up was completed in December 2022 and the plant was handed over the from the project team to the operation team. Technical review of the year-to-date performance of the new Ball Mill #8 indicates that it is performing at higher-than expected milling efficiencies, indicating that concentrator throughput greater than the nominal 20,000 tpd may be sustainable with minimal capital expenditure.

Combined Q4 2022 C1 cash costs[1 ] were $2.09/lb ($1.82/lb sulphides and $2.69/lb cathodes).

1 These are alternative performance measures. Refer to the MD&A section entitled “Alternative Performance Measures”.

Page 15

Combined 2022 C1 cash costs[1] were $2.54/lb ($2.16/lb sulphides and $3.41/lb cathodes). The cathode costs were significantly impacted by high sulphuric acid prices of average $271/tonne in 2022.

Capital Expenditures

Sustaining capital[1] in Q4 2022 of $3.1 million was spent primarily on mining equipment component replacements, maintenance of pump systems for the oxide and concentrate plant. Deferred stripping in Q4 2022 was $23.5 million.

($ millions)	Q4 2022	2022
Deferred stripping	23.5	57.7
Sustaining capital1	3.1	13.6
Expansionary capital1	—	28.0
Capitalized interest on construction in progress	—	4.2
Right of use assets - non cash	1.1	1.1
Mantos Blancos mine additions	27.7	104.6

1 These are alternative performance measures. Refer to the MD&A section entitled “Alternative Performance Measures”.

Page 16

3.3 Mantoverde (70% ownership) – Atacama, Chile Operating Statistics

Operating Statistics
			2022
	Q14	Q2	Q3	Q4	Total
Production(contained)2, 3
Cathode (tonnes)	1,208	13,050	11,581	10,462	36,301
Mining
Waste (000s tonnes)	—	13,501	15,020	17,113	45,634
Ore(000s tonnes)	—	5,876	5,816	6,644	18,336
Total (000s tonnes)	—	19,377	20,836	23,757	63,970
Strip Ratio (Waste:Ore)	—	2.30	2.58	2.58	2.49
Rehandled Ore(000s tonnes)	—	3,366	3,041	3,508	9,915
Total material moved (000s tonnes)	—	22,743	23,877	27,265	73,885
Heap operations
Throughput (000s tonnes)	—	2,763	2,475	2,847	8,085
Grade (%)	—	0.49	0.45	0.40	0.45
Recoveries (%)	—	75.7	86.7	77.0	77.2
Dump operations
Throughput (000s tonnes)	—	2,644	3,788	3,046	9,478
Grade (%)	—	0.17	0.17	0.15	0.16
Recoveries (%)	—	41.9	40.1	37.7	39.8
Payable copper produced (tonnes)	1,208	13,050	11,581	10,462	36,301
Copper C1 cash cost1($/pound payable
copper produced)	3.63	3.40	3.87	3.65	3.63
Adjusted EBITDA1($ millions)	7.2	5.8	(17.7)	(4.6)	(9.3)

2 Adjustments based on final settlements will be made in future quarters 3 Production shown on a 100% basis

4 Includes nine days (from March 23 to March 31, 2022)

Operational and C1 Cash Costs[1] Update

Q4 2022 copper production was 10.5 thousand tonnes.

2022 production was 36.3 thousand tonnes. Heap operation grade was 0.45% and recoveries 77.2%. Dump operations grade was 0.16% and recoveries 39.8%.

Q4 2022 C1 cash costs[1] were $3.65/lb, which were impacted by high sulphuric acid prices, averaging $271/tonne for 2022. More recently, sulphuric acid prices have significantly decreased with contract prices in the $130/tonne to $150/tonne range for 2023.

2022 C1 cash costs[1] were $3.63/lb, at the lower end of Mantoverde guidance range.

Capital Expenditures

Sustaining capital[1] in Q4 2022 of $14.0 million was spent primarily to enable a new leaching area (4th level), new South Dump II area and mining equipment component replacements. Expansionary capital[1] in Q4 2022 of $119.3 million related to MVDP.

The schedule remains intact and the target for construction completion remains late 2023. Work completed in Q4 2022 included:

Assembly and commissioning of the second electric rope shovel with commissioning of a third shovel planned for mid-Q1 2023;

1 These are alternative performance measures. Refer to the MD&A section entitled “Alternative Performance Measures”.

Page 17

Critical equipment such as the SAG and ball mill shells, flotation cells, conveyor belts, components, and others, are already on site; and
Structural and mechanical assembly in the primary crusher, grinding, flotation, and tailings thickener area are in progress as planned.

($ millions)	Q4 2022	2022
Sustaining capital1	14.0	27.7
Expansionary capital1	119.3	270.9
Capitalized interest on construction in progress	8.7	19.2
Right of use assets - non cash	7.1	31.8
Mantoverde mine additions	149.1	349.6

1 These are alternative performance measures. Refer to the MD&A section entitled “Alternative Performance Measures”.

Page 18

3.4 Cozamin Mine – Zacatecas, Mexico Operating Statistics

3.4
Cozamin Mine – Zacatecas, Mexico
Operating Statistics

2022
Q1
Q2
Q3
Q4
Total

2021
Q1
Q2
Q3
Q4
Total

Production(contained)2
Copper (tonnes)
5,921
6,397
6,357
5,776 24,451
Silver (000s ounces)
271
439
353
313
1,376
Zinc (000s pounds)
798
271
525
103
1,697
Mining
Ore (000s tonnes)
342
346
350
316
1,354
Processing
Milled (000s tonnes)
333
352
352
316
1,353
Tonnes per day
3,704
3,874
3,829
3,430
3,803
Copper
Grade (%)3
1.84
1.88
1.86
1.89
1.87
Recoveries (%)
96.6
96.7
96.8
96.8
96.7
Silver
Grade (%)3
41.9
36.4
37.9
37.4
38.4
Recoveries (%)
82.6
82.0
82.1
82.3
82.3
Zinc
Grade (%)3
0.43
0.33
0.36
0.32
0.36
Recoveries (%)
25.4
10.7
18.9
4.6
15.8
Payable copper
produced (tonnes)
5,690
6,144
6,108
5,544 23,486
Copper C1 cash cost1($/
pound payable copper
produced)
1.12
1.25
1.20
1.40
1.24
Adjusted EBITDA1($ millions)
44.7
36.7
23.9
32.6
137.9

5,166
6,250
6,420
6,582 24,418

343
364
398
426
1,531

2,715
1,885
710
928
6,238

328
332
345
353
1,358

301
348
355
355
1,359

3,345
3,828
3,854
3,863
3,724
1.79
1.86
1.87
1.92
1.86
96.0
96.3
96.7
96.6
96.4

43.8
39.6
41.8
45.1
42.5
80.9
82.1
83.6
82.7
82.4
0.84
0.53
0.45
0.48
0.56
48.6
46.7
20.3
24.7
37.0

4,957
6,002
6,169
6,325 23,453

0.91
1.00
0.93
0.99
0.96

34.7
50.0
41.2
45.8
171.7

2 Adjustments based on final settlements will be made in the future quarters.

3 Grade and recoveries were estimated based on concentrate production and may be impacted by settlements from prior production periods.

Q4-2022 vs Q4-2021 Insights

Q4 2022 copper production of 5.8 thousand tonnes was lower than the same period prior year mainly on lower mill throughput (3,430 tpd in Q4 2022 versus 3,863 tpd in Q4 2021) as a result of lower ore mined due to the implementation of a new mining method (cut-and-fill) and ground support improvement project in late Q4 2022. Q4 2022 recoveries and grades were consistent with Q4 2021.

Q4 2022 C1 cash costs[1] were 41% higher than the same period last year mainly due to a decrease in by-product credits ($0.17/lb) as a result of lower zinc production as well as lower silver production and prices, inflationary price increases on the main consumables ($0.13/lb) and lower copper production ($0.13/lb).

YTD-2022 vs YTD-2021 Insights

Full year 2022 production was slightly higher than 2021 full year due to higher throughput as a result of upgrades to the mill in Q1 2022 (3,803 in 2022 versus 3,724 in 2021), slightly higher grades (1.87% in 2022 versus 1.86% in 2021) and recoveries.

1 These are alternative performance measures. Refer to the MD&A section entitled “Alternative Performance Measures”.

Page 19

2022 C1 cash costs[1] were 29% higher than the same period last year primarily due to inflationary price increases in steel (grinding media), explosives and insurance premiums, planned higher spend on mechanical parts to increase equipment availability and reliability ($0.13/lb), lower zinc by-product credits due to planned lower zinc production, as well as lower silver prices ($0.13/lb).

The paste backfill and dry stack tailings project remains on target and will facilitate the mine's planned long-term sustainability with project completion expected in Q1 2023 and ramp-up in the first half of 2023. Inception-to-date, we have invested $52 million of a total $55 million budget for the project.

Capital Expenditures

Sustaining capital[1] and expansionary capital[1] spending at Cozamin totaled $19.8 million for Q4 2022. Sustaining capital[1] was related to mine development and mine equipment. Capital spending included $11.0 million of expansionary capital[1] on the filtered (dry stack) tailings and paste backfill facility project.

Capitalized exploration expenditures totaled $0.5 million for Q4 2022. This was spent primarily on testing the Mala Noche Main Vein West Target with one underground rig from the west exploration crosscut station.

($ millions)	Q4 2022	Q4 2021	2022	2021
Sustaining capital1	8.8	8.5	31.3	25.3
Expansionary capital1	11.0	5.4	38.7	13.1
Brownfield exploration	0.5	1.5	3.3	5.3
Right of use assets-non cash	—	—	0.3	—
Cozamin mine additions	20.3	15.4	73.6	43.7

1 These are alternative performance measures. Refer to the MD&A section entitled “Alternative Performance Measures”.

Page 20

3.5 Santo Domingo Project – Chile (Copper and Iron)

Investing Activities

Project development costs related to early works as required by the Environmental Permit to include flora and fauna relocation, basic and detailed engineering, land tenure costs, the industrial water pipeline and relocation of Regional Highway C-17. In Q3 2021, Capstone Mining commenced major earthworks with respect to the C17 highway by-pass road which provides site access, and work on the electrical substation connection. Capstone Copper has also completed a brownfield expansion drilling program and an update of the geology model and mineral resource, including the new mineralization identified between the Santo Domingo and Iris Norte Pits.

($ millions)	Q4 2022	Q4 2021	2022		2021
Capitalizedproject costs	3.7	9.1	27.3		27.9
3.6 Exploration
($millions)		Q4 2022	Q4 2021	2022	2021
Greenfield exploration (expensed to income statement)		2.5	1.0	9.6		1.7
Brownfield exploration (capitalized to mineral properties) -		0.5	1.4	3.3		2.4
Cozamin
Brownfield exploration (capitalized to mineral properties) –		—	1.7	—		1.7
Santo Domingo
Total exploration		3.0	4.1	12.9		5.8

Capstone Copper’s exploration team is predominantly focused on organic growth opportunities to expand mineral resources and mineral reserves at all four mines and the Santo Domingo development project. Capstone Copper also has an earn-in agreement with Lara Exploration Ltd. for the greenfield Planalto Prospect (Carajas Region, Brazil) and a portfolio of 100% owned claims acquired by staking in Sonora, Mexico.

1 These are alternative performance measures. Refer to the MD&A section entitled “Alternative Performance Measures”.

Page 21

4.0 FINANCIAL REVIEW

4.1 Consolidated Results

Consolidated Net Income Analysis

Net (Loss) Income for the Three Months Ended December 31, 2022 and 2021

The Company recorded net loss of $28.4 million for the three months ended December 31, 2022 compared with net income of $41.4 million in Q4 2021. The major differences are outlined below:

==> picture [502 x 285] intentionally omitted <==

----- Start of picture text -----

250
200 $146.2
150
100
$41.4
50
$3.3
$(154.8)
0 $(18.6)
$46.4
$(28.4)
(50)
$(64.3)
$(13.1)
$(14.9)
(100)
Net Income Revenue Production Depletion Share-based Loss on Foreign Other Taxes Net Loss
Q4 2021 costs and compensation derivatives exchange Q4 2022
amortization
$M
----- End of picture text -----

The difference quarter-over-quarter was driven by:

Revenue: $146.2 million or 68% of the increase was driven by higher copper volumes sold due to the addition of Mantos Blancos and Mantoverde (Q4 2022 – 44.7 thousand tonnes, Q4 2021 – 21.2 thousand tonnes), and partially offset by lower realized copper prices[1] (Q4 2022 - $3.74 per pound, Q4 2021 - $4.61 per pound). Gross copper revenue increased by $170.8 million ($238.4 million increase on higher volume sold and reduced by $67.6 million on lower price).
Production costs: $154.8 million increase primarily driven by the addition of Mantos Blancos and Mantoverde:
Pinto Valley recorded $3.2 million higher production costs in Q4 2022 compared to Q4 2021 as a result of higher costs driven by inflationary impacts on supplies and diesel.
Cozamin recorded $1.5 million higher production costs in Q4 2022 compared to Q4 2021 as a result of higher mining costs.
Mantos Blancos recorded $65.6 million production costs in Q4 2022 on 14.1 thousand tonnes of copper volumes sold.
Mantoverde recorded $84.0 million production costs in Q4 2022 on 10.8 thousand tonnes of copper volumes sold.
Depletion and amortization: $18.6 million increase primarily due to the addition of Mantos Blancos and Mantoverde of $18.2 million.
Loss on derivatives: $64.3 million increase primarily due to net loss of $42.2 million on the operating derivatives (copper commodity and foreign exchange), and the $21.7 million net loss on MVDP's financing derivative portfolio (copper commodity, interest rates, and foreign currency swaps). Copper forward curve prices increased from $3.43/lb as at September 30, 2022 to $3.80/lb as at December 31, 2022, resulting in an unrealized loss on copper hedges of $83.3 million.

1 These are alternative performance measures. Refer to the MD&A section entitled “Alternative Performance Measures”.

Page 22

Foreign exchange: $13.1 million change primarily due to additional foreign exchange impacts from Mantos Blancos and Mantoverde as a result of a strengthening Chilean Peso.
Income taxes: $46.4 million decrease due to a net loss during Q4 2022 compared to a net income during Q4 2021.

Net Income for the Years Ended December 31, 2022 and 2021

The Company recorded net income of $136.1 million for the year ended December 31, 2022 compared with net income of $252.9 million in 2021. The major differences are outlined below:

==> picture [525 x 281] intentionally omitted <==

----- Start of picture text -----

700 $501.2
600
500
400
300 $252.9
200
$111.4 $136.1
$(92.4)
100
$(570.8) $42.2 $(22.4) $23.3
0
$(19.5)
$(83.1) $(6.7)
(100)
Net Income Impairment Revenue Production Depletion G&A Share-based Transaction Gain on Other Taxes Net Income
2021 reversal costs and compensation & derivatives 2022
amortization integration
costs
$M
----- End of picture text -----

The difference year-over-year was driven by:

Revenue: $501.2 million or 63% of the increase was driven by higher copper volumes sold due to the addition of Mantos Blancos and Mantoverde (2022 – 159.9 thousand tonnes, 2021 – 81.1 thousand tonnes), and partially offset by lower realized copper prices[1] (2022 - $3.76 per pound, 2021 - $4.42 per pound). Gross copper revenue increased by $553.1 million ($767.0 million increase on higher volume sold and reduced by $213.9 million on lower price).
Production costs: $570.8 million increase primarily driven by inclusion of Mantos Blancos and Mantoverde:
Pinto Valley recorded $31.2 million higher production costs in 2022 compared to 2021 as a result of higher costs driven by inflationary impacts on supplies and diesel and additional spend on rental equipment and contractors.
Cozamin recorded $5.0 million higher production costs in 2022 compared to 2021 as a result of higher mining costs.
Mantos Blancos recorded $215.5 million production costs in 2022 on 40.6 thousand tonnes of copper volumes sold.
Mantoverde recorded $317.0 million production costs in 2022 on 39.3 thousand tonnes of copper volumes sold.
Depletion and amortization: $83.1 million increase primarily due to the addition of Mantos Blancos and Mantoverde of $74.3 million, and $8.8 million from the increase in copper volumes sold.
Impairment reversal of $92.4 million on mineral properties related to Santo Domingo recorded during Q1 2021.
Share-based compensation: $42.2 million decrease primarily due to decrease in share price in 2022 (C$5.58 opening price to C$4.94 closing price as at December 31, 2022 vs. C$2.38 opening price to C$5.58 closing price as at December 31, 2021).

1 These are alternative performance measures. Refer to the MD&A section entitled “Alternative Performance Measures”.

Page 23

Gain on derivatives: $111.4 million increase primarily due to the $150.5 million unrealized net gain on MVDP's financing derivative portfolio (copper commodity, interest rates, and foreign currency swaps), partially offset by the realized net loss of $41.0 million on the portfolio, and a net gain of $1.6 million on the operating derivatives (copper commodity and foreign exchange). Copper forward curve prices dropped from $4.41/lb as at December 31, 2021 to $3.80/lb as at December 31, 2022, resulting in an unrealized gain on copper hedges of $100.8 million.
Transaction & Integration costs : $19.5 million increase primarily due to the transaction ($19.4 million) and integration costs ($3.4 million) incurred as a result of the Transaction.
Income taxes: $23.3 million decrease due to a lower pre-tax income compared to 2021.

4.2 Revenue Analysis

Revenue increased quarter-on-quarter ($362.1 million versus $215.9 million in Q4 2021) primarily due to higher copper volumes sold (44.7 thousand tonnes versus 21.2 thousand tonnes in Q4 2021) as a result of the additional sales from Mantos Blancos and Mantoverde mines, partially offset by a lower realized copper price[1] ($3.74 per pound versus $4.61 per pound in Q4 2021).

YTD revenue increased year-on-year ($1,296.0 million versus $794.8 million in 2021) due to additional 78.8 thousand tonnes higher copper volumes sold (159.9 thousand tonnes versus 81.1 thousand tonnes in 2021) as a result of the sales from Mantos Blancos and Mantoverde mines, and partially offset by a lower realized copper price[1] ($3.76 per pound versus $4.42 per pound in 2021).

Revenue by Mine

($ millions)	Q4 20222	Q4 20222	Q4 20212	Q4 20212	20222		20212	20212
Pinto Valley	122.5	33.8 %	148.1	68.6 %	473.6	36.5 %	546.8	68.8 %
Mantos
Blancos	115.0	31.8 %	—	—	307.3	23.7 %	—	—
Mantoverde	87.8	24.2 %	—	—	315.4	24.3 %	—	—
Cozamin	54.6	15.1 %	67.8	31.4 %	217.0	16.7 %	248	31.2 %
Corporate3	(17.8)	(4.9) %	—	—	(17.3)	(1.2) %	—	—
Total
revenue	362.1	100.0 %	215.9	100.0 %	1296.0	100.0 %	794.8	100.0 %

2 The current and subsequent periods may include final settlement quantity and/or price adjustments from prior shipments.

3 The Corporate revenue is related to the net changes on quotational period hedges.

Provisionally Priced Copper

Gross revenue for the year ended December 31, 2022 includes 55.0 thousand tonnes of copper sold subject to final settlement. Of this, the prices for 7.7 thousand tonnes are final at a weighted average price of $3.78 per pound. The remaining 47.3 thousand tonnes are subject to price change upon final settlement at the end of the applicable quotational period, as follows:

Quotational Period	($/pound)
	Pinto Valley Mantos Blancos Mantoverde Cozamin Total Provisional Price
Jan-2023 Feb-2023 Mar-2023 Apr-2023	5.7 4.3 2.8 1.8 14.6 3.80 10.5 4.2 3.3 1.8 19.8 3.80 2.8 3.5 — 2.2 8.5 3.80 2.7 — — 1.7 4.4 3.80
Total	21.7 12.0 6.1 7.5 47.3 3.80

Provisional pricing is a term in copper concentrate and copper cathode sales agreements that provides for provisional pricing of sales at the time of shipment, with final pricing being based on the monthly average LME copper price for specific future periods, normally ranging from one to four months after delivery to the customer. The difference between provisional invoice price and final invoice price is recognized in net earnings. In order to mitigate the impact of these adjustments on net earnings, in August 2022, the Company initiated a quotational period ("QP") hedging program to mitigate the impact of the difference between provisional invoice prices and the

1 These are alternative performance measures. Refer to the MD&A section entitled “Alternative Performance Measures”.

Page 24

final price. The provisional pricing gains or losses and the offsetting derivative gains or losses are recognized in pricing and volume adjustments in revenue.

Realized Copper Prices[1]

($/pound)		2022				2021
	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
Pinto Valley	4.81	3.66	3.30	4.02	4.15	4.85	4.10	4.66
Mantos Blancos	4.84	3.57	3.25	3.92	—	—	—	—
Mantoverde	4.64	3.78	3.30	3.74	—	—	—	—
Cozamin	4.75	3.52	3.31	4.06	4.02	4.62	4.24	4.48
Consolidated	4.78	3.66	3.29	3.74	4.12	4.78	4.15	4.61
LME Average	4.53	4.31	3.51	3.63	3.86	4.40	4.25	4.40
LME Close	4.69	3.74	3.47	3.80	4.01	4.26	4.10	4.40

The realized copper price[1] in Q4 2022 of $3.74 per pound was higher than the LME average of $3.63 per pound mainly due to 47.3 thousand tonnes of copper provisionally priced at an average of $3.80 per pound at December 31, 2022, which was higher than Q4 2022 average prices.

The realized copper price[1] in 2022 of $3.76 per pound was lower than the LME average of $4.00 per pound mainly due to prior period shipments which final settled or second provisionally invoiced at lower average prices during the second and third quarter of 2022 when copper prices declined.

1 These are alternative performance measures. Refer to the MD&A section entitled “Alternative Performance Measures”.

Page 25

Reconciliation of Realized Copper Price[1]

Reconciliation of Realized Copper Price1
($ millions,except as noted)	Q4 2022 Q4 2021 2022 2021
Gross copper revenue
Gross copper revenue on new shipments Gross copper revenue on prior shipments Gross copper revenue	357.7 207.3 1,383.4 762.1 (7.8) 2.5 (50.5) 31.5
	349.9 209.8 1,332.9 793.6
Pricing and volume adjustments on copper revenue	19.0 6.1 (8.2) (4.6)
Gross copper revenue including pricing and volume adjustments	368.9 215.9 1,324.7 789.0
Gross copper revenue on new shipments ($/pound) Gross copper revenue on prior shipments ($/pound)	3.63 4.43 3.93 4.27
	(0.08) 0.05 (0.15) 0.18
Pricing and volume adjustments on copper revenue ($/pound)	0.19 0.13 (0.02) (0.03)
Realized copper price1 ($/pound)	3.74 4.61 3.76 4.42 3.63 4.40 4.00 4.23
LME average copperprice($)

Gross copper revenue - reconciliation to financials
Gross copper revenue including pricing and volume adjustments Revenue from other metals Treatment and selling Revenue per financials	368.9 215.9 1,324.7 789.0
	12.5 11.6 43.5 49.6
	(19.3) (11.6) (72.2) (43.8)
	362.1 215.9 1,296.0 794.8

Payable copper sold (tonnes)	44,698 21,244 159,863 81,065

1 These are alternative performance measures. Refer to the MD&A section entitled “Alternative Performance Measures”.

Page 26

4.3 Consolidated Cash Flow Analysis[2]

($ millions)	Q4 2022	Q4 2021	2022	2021
Operating cash flow before changes in working capital3	99.4	104.9	224.4	556.3
Changes in non-cash working capital	(73.0)	(4.8)	(133.4)	21.8
Other non-cash changes	(2.0)	(5.6)	(3.6)	(24.8)
Total cash flow from operating activities	24.4	94.5	87.4	553.3
Total cash flow used in investing activities	(159.8)	(37.5)	(370.7)	(143.7)
Total cash flow from (used in) financing activities	110.2	(1.1)	192.1	(204.3)
Effect of foreign exchange rates on cash and cash
equivalents	1.1	0.1	(0.6)	0.2
Net change in cash and cash equivalents	(24.1)	56.0	(91.8)	205.5
Openingcash and cash equivalents	194.4	206.1	262.1	56.6
Closing cash and cash equivalents	170.3	262.1	170.3	262.1

2 2021 include $180.0 million silver and gold stream proceeds

3 Certain of prior period comparative figures have been reclassified to conform with the current year's presentation

Changes in Cash Flows for the Three Months Ended December 31, 2022 and 2021

The net change in cash was $(24.1) million in Q4 2022 compared to $56.0 million in Q4 2021. The change was primarily due to:

Cash flow from operating activities before changes in working capital was lower by $5.5 million. Revenue less production costs were lower in Q4 2022 versus Q4 2021 by $8.0 million (Q4 2022 revenue of $362.1 million less production costs of $240.8 million compared to Q4 2021 revenue of $215.9 million less production costs of $86.6 million), which was offset by receipts on derivative contracts.
Changes in non-cash working capital in Q4 2022 was $68.2 million lower compared to the same period last year primarily due an increase in accounts receivable, partially offset by an increase in accounts payable .
Cash flows used in investing activities were $122.3 million higher in Q4 2022 mainly due to addition of capital expenditures of the Mantos Blancos and Mantoverde mines, including MVDP spend.
Cash flows from financing activities were $111.3 million higher in Q4 2022 primarily due to a $90.0 million net proceeds from RCF, Mantoverde Development project facility and a related party advance from MMC of $37.1 million under the cost overrun facility ("COF"), partially offset by payments on derivative contracts associated with the MVDP Finance facility, and higher lease payments resulting from the business combination with Mantos.

Changes in Cash Flows for the Years Ended December 31, 2022 and 2021

The net change in cash was $(91.8) million in 2022 compared to $205.5 million in 2021. The change was primarily due to:

Operating cash flow before changes in working capital was lower by $331.9 million. Revenue less production costs were lower in 2022 versus 2021 by $67.4 million (2022 revenue of $1,296.0 million less production costs of $903.1 million compared to 2021 revenue of $794.8 million less production costs of $334.5 million) due to lower copper prices and inflationary pressure on production costs. Also, $180.0 million proceeds were received in 2021 under a Silver and Gold Stream Agreements versus nil in 2022. Moreover, Mexican tax installments, based on prior year income, paid in 2022 were $36.2 million higher than in 2021, $36.4 million on one-off Mantos transaction costs, higher general and administrative expenses, exploration and royalty payments.
Changes in non-cash working capital was lower by $155.2 million primarily due to a decrease in accounts payable and accrued liabilities, resulting from timing of payments made to vendors and withholding taxes, and an increase in accounts receivable, partially offset by a decrease in inventories.
Cash flows used in investing activities were $227.0 million higher in 2022 mainly due to addition of Mantos Blancos and Mantoverde mines including MVDP spend. Cash used in investing activities for capital asset additions was offset by $219.2 million of cash and cash equivalents assumed on the Transaction.
Cash flows from financing activities were $396.4 million higher in 2022 primarily due to $184.9 million of net repayments on the Revolving Credit Facility ("RCF") in 2021 compared to 2022 net proceeds of $240.3 million from the RCF, Mantoverde Development project facility, and $60.0 million related party advance from MMC under the cost overrun facility, partially offset by a $34.7 million payment to KORES for the second tranche as

1 These are alternative performance measures. Refer to the MD&A section entitled “Alternative Performance Measures”.

Page 27

required under the 2021 Share Purchase Agreement, $39.4 million of net payments on derivative contracts associated with the MVDP finance facility, and higher incremental lease payments as a result of the business combination with Mantos.

4.4 Liquidity and Financial Position

==> picture [502 x 285] intentionally omitted <==

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Q4 2022 Change in Net (debt)
0
(100)
(200)
$32
(300)
$(8)
$(332)
(400) $(61)
(500) $(99) $(9) $(4) $(2) $(483)
(600)
September Operating Taxes paid MVDP Sustaining Leases Derivatives Other December
30, 2022 cash flow and other paid paid 31, 2022
before capital
taxes
$M
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The increase in Net (debt)[1] as at December 31, 2022, is primarily attributable to the capital spend on the MVDP and other capital projects.

Credit Facilities

Mantoverde Development Project Facility

Mantoverde secured $572 million in debt financing facility to fund the construction of the MVDP. The debt facility comprises a senior secured amortizing project debt facility in an aggregate amount of $520 million (the “Covered Facility” $250 million, the “Uncovered Facility” $210 million, and the “ECA Direct Facility” $60 million) and a $52 million senior secured mine closure bonding facility (the “Bonding Facility”). These project finance facilities are subject to affirmative, financial and restrictive covenants that include obligations to maintain the security interests in favour of the lenders over substantially all of the respective project’s property and shares, insurance coverage, maintenance of off-take agreements, compliance with environmental and social matters, restrictions on new financial indebtedness, distributions and dispositions, and compliance with certain financial ratios. As at December 31, 2022, the Company was in compliance with these covenants.

As a condition to the financing facilities, the Company was required to effect certain hedging strategies as detailed in the lending agreement. The agreement indicates that the Company must implement hedging programs related to copper prices, foreign exchange rates and interest rates during the financing period. The Company has complied with all obligations related to the financing agreements and the financing for the MVDP.

Interest on borrowings under the MVDP Facility is payable quarterly at a variable rate of 3-month US$ LIBOR plus a margin per annum (i.e., 1.65% for the Covered Facility and, with respect to the Uncovered Facility, a rate of 3.75% and with respect to the ECA Direct Facility, a rate of 4.00% pre-completion of the MVDP, and decreasing to 3.50% and 3.75% respectively post-completion of the MVDP). Pursuant to the Covered Facility, an export credit agency guaranteed premium of 2.05% per annum is also payable quarterly and calculated over amounts outstanding under the Covered Facility. The MVDP is secured by a comprehensive security package covering

1 These are alternative performance measures. Refer to the MD&A section entitled “Alternative Performance Measures”.

Page 28

substantially all of Mantoverde's assets. These facilities amortize from the earlier of September 30, 2024 and 180 days after project completion. The Uncovered Facility amortizes over a 10 year period and the Covered Facility and ECA Direct Facility amortize over 12 years. As a result of Interest Rate Benchmark Reform, it is currently expected that the MVDP facility which references LIBOR will need to be negotiated to agree on the new benchmark rate to be used. This negotiation has not yet occurred.

Mantoverde Cost Overrun Facility ("COF")

MMC agreed to provide a $60 million COF in exchange for additional off-take of copper concentrate production under a 10-year contract. The COF carries an interest rate of LIBOR plus 1.70% and amortizing over 37 quarters from the earlier of September 30, 2024 or three quarters after project completion. As at December 31, 2022, the amount drawn on the COF was $60.0 million. Mantoverde SA is required to draw on the COF to fund any increases in capital over the original estimate of $785 million regardless of operating cash flow balance. The total costs for MVDP were increased to $825 million during the second quarter thus resulting in draws on the COF during the third and fourth quarter. As a result of Interest Rate Benchmark Reform, it is currently expected that the COF which references LIBOR will need to be negotiated to agree on the new benchmark rate to be used. This negotiation has not yet occurred.

Revolving Credit Facility

On May 12, 2022, Capstone Mining amended its corporate RCF. The amended RCF was increased to $500 million, plus $100 million accordion option available 180 days after closing, and has a maturity of four years from closing and an interest cost of adjusted term Secured Overnight Financing Rate ("SOFR") plus a margin of 1.875% - 2.75% depending on the total net leverage ratio. The amended RCF became effective on July 22, 2022 after all the required security was in place and customary closing conditions were met. On December 12, 2022, Capstone exercised the $100 million accordion option, which resulted in the maximum Credit Limit being $600 million.

The interest rate at December 31, 2022 was adjusted term SOFR of 4.83% plus 1.875% (2021 - US LIBOR plus 2.50%) with a standby fee of 0.42% (2021 – 0.56%) payable on the undrawn balance (adjustable in certain circumstances).

The RCF in effect as of December 31, 2022 is secured against the present and future real and personal property, assets and undertakings of Capstone Copper (other than defined excluded entities, Acquisition Co., Far West Mining Ltd., Minera Santo Domingo SCM, Capstone Resources MSD Ltd., FWM Exploration (Chile) Ltd., and Far West Exploration S.A., Mantoverde Holding SpA, Mantoverde S.A., Mantos Copper Delaware LLC and subject to certain exclusions for Capstone Mining Chile SpA).

The credit facility requires Capstone to maintain certain financial ratios relating to debt and interest coverage. Capstone was in compliance with these covenants as at December 31, 2022. As at December 31, 2022, the balance of the RCF is $75.0 million (December 31, 2021 - nil), excluding deferred financing fees of $3.4 million (December 31, 2021 - nil).

Mantos Blancos Concentrator Development Project Debt Facility

A subsidiary of the Company entered into a $150 million debt facility with Glencore Chile SpA ("Glencore") in connection with the Mantos Blancos CDP, with an associated off-take agreement with Complejo Metalúrgico Altonorte S.A. for 75% of the concentrates produced including the silver contained (both agreements expire on December 31, 2026). Interest on borrowings under the Mantos Blancos CDP Facility was payable quarterly at a variable rate of 3-month US$ LIBOR plus a margin of 4.5% per annum and repayment terms require that the Company make repayment installments quarterly, equal to a percentage of the aggregate loans outstanding at the end of the period. On July 22, 2022, the Company fully repaid the Mantos Blancos CDP debt facility and the facility was cancelled. The gain on extinguishment of the debt of $8.0 million was recognized in the income statement for the period ending December 31, 2022.

As at December 31, 2022, Capstone Copper is in a net (debt)[1] position of $483.1 million with $595.0 million longterm debt drawn in total plus $60.0 million drawn on the COF which is noted as Due to Related Party. As at December 31, 2022, the $595.0 million of long term debt consists of $520.0 million drawn on the MVDP facility and $75.0 million was drawn on the RCF.

1 These are alternative performance measures. Refer to the MD&A section entitled “Alternative Performance Measures”.

Page 29

Hedging

The Company has hedged certain input costs and revenue products as part of an overall risk management strategy:

In Q3 2022, the Company entered into zero costs collars ("ZCCs") whereby it sold a series of call option contracts and purchased a series of put option contracts for nil cash premium. The contracts were for a total of 27,500 tonnes of copper covering the period from January 2023 through December 2023, and have a floor and weighted average ceiling price of $3.20/lb and $4.15/lb, respectively. The Company also entered into fixed-for-floating swaps for a total of 37,375 tonnes of copper covering the period from January 2023 to December 2023, and have a weighted average forward price of $3.64/lb. The intent is to ensure balance sheet protection and sufficient liquidity to complete MVDP in 2023. At December 31, 2022, the fair value of these derivatives is $(16.9) million.
In Q2 2022, the Company entered into ZCCs whereby it sold a series of call option contracts and purchased a series of put option contracts for nil cash premium. The contracts were for a total of 26,700 tonnes of copper covering the period from May 2022 through December 2022, and have a floor and weighted average ceiling price of $4.00/lb and $4.86/lb, respectively. The intent is to ensure balance sheet protection and sufficient liquidity to complete MVDP. There was a realized gain on the zero cost collars of $18.9 million for the year ended December 31, 2022.
The Company entered into copper time-spread swaps in order to manage the risk associated with provisional pricing in terms of copper concentrate sales agreements. The contracts were for a total of 46,306 tonnes of copper covering the period from September 2022 to March 2023 at an weighted average of cost of $59.75 per tonne. There was a realized loss on the swaps of $7.9 million for the year ended December 31, 2022 which offset against gains on provisional pricing adjustments to achieve LME average price.
Financial hedges were executed on foreign exchange rates to protect approximately 75% of the Company’s Mexican Peso exposure through to December 2022, through Mexican Peso to US dollar exchange rate zero cost collars (being purchased puts and sold calls with offsetting values at inception). There was a realized gain on these Mexican Peso zero cost collars of $0.1 million for the year ended December 31, 2022.
Financial hedges were executed on foreign exchange rates to protect approximately 75% of the Santo Domingo’s Chilean Peso exposure through to December 2022 and to protect approximately 50% of the Company's attributable Chilean Peso exposure on operating costs at Mantoverde and Mantos Blancos from April 2022 through to December 2023 all through Chilean Peso to US dollar exchange rate zero cost collars (being purchased puts and sold calls with offsetting values at inception). There was a realized loss on the Chilean Peso zero cost collars of $0.1 million for the year ended December 31, 2022.
Financial hedges were executed on foreign exchange rates to protect the Company's CAD dollar exposure through to February 2023 all through US dollar to CAD dollar exchange rate forward contracts. There was no realized loss on the CAD dollar forward contracts for the year ended December 31, 2022.
Financial hedges were executed on foreign exchange rates to protect the Company's CAD dollar exposure through to December 2023 whereby it sold a series of call option contracts and purchased a series of put option contracts for nil cash premium There was no realized loss on the CAD dollar collars for the year ended December 31, 2022.
As a condition of the project financing for the MVDP, Mantoverde was required to effect certain hedging strategies as follows:
Fixed-for-floating copper swaps covering 65% of copper cathode production at an average price per tonne at inception of $7,698 (~$3.49/lb) through to June 30, 2024;
Fixed-for-floating LIBOR swaps at 1.015% for 10-years, with a 0% floor on the LIBOR rate within the first five years (expiring in September 2025);
CLP:US$ foreign exchange rate forwards at an average price of 727.4 and notional amount of approximately $104 million that mature in May 2024 to hedge 100% of the forecasted EPC contract costs denominated in CLP; and

1 These are alternative performance measures. Refer to the MD&A section entitled “Alternative Performance Measures”.

Page 30

CLF:US$ foreign exchange rate forwards at an average price of 41.7 and notional amount of approximately $321 million that mature in May 2024 to hedge 100% of the forecasted EPC contract costs denominated in CLF.
The realized loss on Mantoverde's derivative portfolio was $41.0 million for the year ended December 31, 2022.
Pinto Valley contracted for fixed diesel prices with a supplier on its expected 2022 diesel consumption at $2.13/gallon. The contracted diesel prices have resulted in cost savings of $13.0 million during the year ended December 31, 2022.

Financial Capability

The Company’s ability to service its ongoing obligations and cover anticipated corporate, exploration and development costs associated with its existing operations is dependent on the Pinto Valley, Mantos Blancos, Mantoverde, and Cozamin mines generating positive cash flow and available liquidity[1] . Based on reasonable expectations for our operating performance, and additional liquidity options available such as capital market access, the recently amended and extended Corporate RCF of $600 million, $525 million of which is undrawn, and the hedging programs described above, provides both protection from further weakening of copper prices in 2023 and significant available liquidity as the Company completes the Mantoverde Development Project.

Our available liquidity[1] as at December 31, 2022 was $696.9 million, which included $171.9 million of cash and cash equivalents and short-term investments, and $525 million of undrawn amounts on our $600 million RCF.

Capital Management

Capstone Copper’s capital management objectives are intended to safeguard the Company’s ability to support its normal operating requirements on an ongoing basis as well as continue the development and exploration of its mineral properties and support any expansion plans. As part of the Company’s treasury policy, the Company will only hold deposits in Canadian Tier 1 banks, International Commercial Banks with a rating of A- or greater, Canadian and US government bonds, or bankruptcy remote treasury market or exchange traded funds of AAA rating.

4.5 Commitments

Royalty Agreements

Under the terms of the December 2003 option agreement with Grupo Minera Bacis S.A. de C.V. (“Bacis”), Capstone Mining assumed a 100% interest in the Cozamin Mine with a 3% net smelter royalty paid to Bacis on all payable metal sold from production on the property covered by the agreement.

In connection with the financing of the Mantos Blancos Debottlenecking Development Project, Mantos Copper S.A. entered into a royalty agreement with Southern Cross Royalties Limited ("Southern Cross"). Southern Cross is entitled to a 1.525% net smelter royalty on copper production. The royalty is for a period initially through January 1, 2035 that may be extended by Southern Cross at its sole discretion through the duration of the mining rights and is subject to the Company's option to reduce the royalty amount by 50% any time after January 1, 2023, subject to a one-time payment.

Agreement with Osisko Bermuda Limited ("Osisko")

Pursuant to a long-term streaming agreement made in 2015, that covers the life of mine, the Company delivers 100% of the payable silver sold by Mantos Blancos to Osisko Bermuda Limited ("Osisko"). Osisko pays a cash price of 8% of the spot price at the time of each delivery, in addition to an upfront acquisition price previously paid. After 19.3 million ounces of silver have been delivered under the agreement, the stream will be reduced to onethird. Mantos Blancos has delivered 4.6 million silver ounces since contract inception until December 31, 2022.

Agreement with Jetti Resources, LLC (“Jetti”)

Under the terms of the 2019 agreement, the Company is required to make quarterly royalty payments to Jetti based on an additional net profits calculation resulting from cathode production at the Pinto Valley mine. The initial term of the agreement is ten years, renewable for 5-year terms thereafter.

1 These are alternative performance measures. Refer to the MD&A section entitled “Alternative Performance Measures”.

Page 31

Off-take agreements

The Company has sales commitments of copper concentrate production at Mantos Blancos under off-take agreements with Glencore.

The Company has sales commitments equal to 100% of its copper cathode production at Mantoverde and Mantos Blancos under off-take agreements with Anglo American Marketing Limited ("AAML") up to the end of December 2025.

The Company has concentrate off-take agreements with third parties whereby they will purchase 100% of the copper concentrate produced by the Cozamin Mine up to the end of December 2023.

The Company has a number of annual and multi-year concentrate off-take agreements with third parties whereby they will purchase the copper concentrate produced by the Pinto Valley Mine.

The Company entered into an off-take agreement with Boliden Commercial AB (“Boliden”) for 75 thousand tonnes of copper concentrates in each contract year. The off-take agreement expires ten years after the commencement of commercial production at the MVDP, subject to potential extension if less than 750 thousand tonnes of copper concentrates have been delivered at the contract term and subject to termination if commercial production does not commence by December 31, 2024.

MMC agreed to provide a $60 million COF in exchange for additional off-take of copper concentrate production under a 10-year contract. The off-take agreement includes Mantoverde agreeing to sell 30% of its annual copper production per year delivered for its equivalent in copper concentrates, plus an additional amount per annum of 20,000 to 30,000 tonnes of copper concentrate depending on the amount that is drawn by Mantoverde under the COF provided by MMC in connection with the MVDP. The agreement between MMC and Mantoverde to sell 30% of its annual copper production is for the duration of Mantoverde's commercial mine life. The amount payable for copper is based on average LME prices, subject to certain terms.

Construction and other operating contracts

The Company entered into the EPC with Ausenco Chile Limitada for an estimated aggregate cost of $525 million. As at December 31, 2022, capital expenditures committed, but not yet incurred, were $265.9 million.

The Company has a contractual agreement extending until 2033 to purchase water for operations at Mantos Blancos.

The Company has contractual agreements for the purchase of power for operations at Mantos Blancos and Mantoverde, extending until 2028 and 2039, respectively.

The Company has contractual arrangements at Mantos Blancos and Mantoverde for the purchase of acid in 2023 and 2024 of 325,000 tonnes and 420,000 tonnes, respectively.

Minto surety bond indemnification

On June 3, 2019, the Company completed the sale of its 100% interest in the Minto mine ("Minto") to Pembridge Resources PLC (“Pembridge”). In conjunction with completion of the sale, Pembridge has posted a surety bond to cover potential future reclamation liabilities. The Company remains an Indemnitor for Minto’s C$72 million surety bond obligation in the Yukon and could be liable for the bonded obligations in the event Minto does not satisfy those obligations. Pembridge has put C$10 million into a control account which is to be applied against the reclamation if the surety bond is called. The Company continues to monitor Minto’s financial situation, any uncertainty in Minto's ability to meet the obligation may trigger an event that may create a possible obligation in the future related to the financial exposure on the surety bond indemnification. No amount has been recognized as a liability as at December 31, 2022, as there is no present obligation that is probable.

Other

The Company has provided a guarantee to the Chilean Internal Revenue Service that all value added taxes and other taxes receivable amounts refunded, plus interest, will be repaid if construction of the Santo Domingo development project is not completed by August 31, 2026.

1 These are alternative performance measures. Refer to the MD&A section entitled “Alternative Performance Measures”.

Page 32

Contractual Obligations and Commitments

The following table summarizes certain contractual obligations for the periods specified as at December 31, 2022:

		Total	2023	2024	2025	2026	After 2026	After 2026
Accounts payable and accrued
liabilities*	$	284,913 $	284,913 $	— $	— $	—	$	—
Long term debt	$	595,000	—	—	—	75,000		520,000
Leases and other contracts	$	114,656	34,748	27,915	16,059	14,051		21,883
Due to relatedparty	$	60,000	—	3,243	6,486	6,486		43,785
	$	1,054,569 $	319,661 $	31,158 $	22,545 $	95,537	$	585,668

* Amounts above do not include payments related to the Company's reclamation and closure cost obligations and other long- term provisions.

Provisions

Provisions of $239.6 million at December 31, 2022 includes the following:

$199.7 million for reclamation and closure cost obligations at Capstone Copper’s operating mines;
$29.9 million related to other long-term obligations at the Cozamin and Chilean mines; and
$10.0 million for the long-term portion of the share-based payment obligations associated with the Share Unit Plan. The current portion of the share-based payment obligations of $30.5 million is recorded in other liabilities.

Precious Metal Streams

Cozamin Silver Stream

On February 19, 2021, Capstone Mining entered into a precious metals purchase arrangement with Wheaton whereby the Company received upfront cash consideration of $150 million against delivery of 50% of the silver production from the Company’s Cozamin mine until 10 million ounces have been delivered, thereafter dropping to 33% of silver production for the remaining life of the mine. Cozamin has delivered 1.35 million silver ounces since contract inception until December 31, 2022.

In addition to the upfront payment of $150 million, as silver is delivered under the terms of the arrangement, the Company receives cash payments equal to 10% of the spot silver price at the time of delivery for each ounce delivered to Wheaton.

The Company recorded the upfront cash consideration received as deferred revenue and recognizes amounts in revenue as silver is delivered under the arrangement. For the period ended December 31, 2022, the amount of the deferred revenue liability recognized as revenue was $12.9 million.

Santo Domingo Gold Stream

On April 21, 2021, Capstone Mining received an early deposit of $30 million in relation to the precious metals purchase arrangement with Wheaton effective March 24, 2021. Additional deposits of $260 million are to be received over the Santo Domingo construction period, subject to sufficient financing having been obtained to cover total expected capital expenditures and other customary conditions, for total consideration of $290 million (“Deposit”). Wheaton will receive 100% of the gold production from the Company's Santo Domingo development project until 285,000 ounces have been delivered, thereafter dropping to 67% of the gold production.

In addition to the Deposit, as gold is delivered under the terms of the arrangement, the Company receives cash payments equal to 18% of the spot gold price at the time of delivery for each ounce delivered to Wheaton, until the Deposit has been reduced to zero, thereafter increasing to 22% of the spot gold price upon delivery.

The Company recorded the upfront early deposit of $30 million received as deferred revenue and will recognize amounts in revenue as gold is delivered under the arrangement. For the period ended December 31, 2022, there was no amortization of the deferred revenue liability recognized as revenue.

The non-current portion of the deferred revenue liability for both stream arrangements on the balance sheet at December 31, 2022 was $160.5 million.

1 These are alternative performance measures. Refer to the MD&A section entitled “Alternative Performance Measures”.

Page 33

Purchase of Non-Controlling Interest from KORES

At December 31, 2022, a liability of $40.4 million has been recognized in other non-current liabilities equal to the discounted amount of the remaining $45.0 million to be paid to KORES as part of the agreement to purchase its 30% share of Acquisition Co. The discounted amount of the remaining $45.0 million will be accreted up to its face value at 5% per year. During the year ended December 31, 2022, $3.5 million of accretion was recorded in other interest expense in the consolidated statements of income.

Off Balance Sheet Arrangements

As at December 31, 2022, the Company had no off-balance-sheet arrangements other than the following:

those disclosed under Commitments in the consolidated financial statements for the year ended December 31, 2022;
capital expenditure commitments totaling $265.9 million;
seven surety bonds totaling $223.3 million.

4.6 Transactions with Related Parties

As described in the Nature of Business section, Capstone Copper has related party relationships, as defined by IFRS, with its key management personnel.

Related party transactions and balances are disclosed in the consolidated financial statements for the year ended December 31, 2022, except the following:

MMC has a 30% non-controlling interest in Mantoverde S.A. as part of the project financing for Mantoverde's Development Project.
MMC agreed to provide a $60 million COF in exchange for additional off-take of copper concentrate production under a 10-year contract. The COF carries an interest rate of LIBOR plus 1.70% and amortizing over 37 quarters from the earlier of September 30, 2024 or three quarters after project completion. As at December 31, 2022, the amount drawn on the COF was $60.0 million.
Orion Resource Partners ("Orion") were Mantos' largest shareholder and on completion of the Transaction hold approximately 32% shareholder interest in Capstone Copper. The amounts previously reported as Due from a related party included a loan granted by Capstone Copper (previously Mantos Copper (Bermuda) Ltd.) to Orion Fund JV Ltd. Amounts previously reported as Due to a related party included a loan granted by Orion Fund JV Limited to Mantos Copper Holdings SpA. These amounts were settled during June 2022 via a non-cash assignment and offset agreement.

4.7 Accounting Changes

In May 2020, the International Accounting Standards Board ("IASB") issued an amendment to IAS 37, Provisions, Contingent Liabilities and Contingent Assets. The amendment clarifies that the costs of fulfilling a contract when assessing whether a contract is onerous comprise both the incremental costs and an allocation of other costs that relate directly to fulfilling the contract. The amendment became effective January 1, 2022 and applies to contracts existing at the date when the amendments are first applied. On adoption of this amendment, the Company assessed the impact of the amendment and determined it does not have a significant effect on the Company's financial statements.

In May 2020, the IASB issued an amendment to IAS 16, Property, Plant and Equipment - Proceeds before Intended Use. The amendment prohibits deducting from the cost of property, plant and equipment amounts received from selling items produced while preparing the asset for its intended use. Instead, a company will recognize such sale proceeds and related cost in the consolidated statements of income (loss). The amendment became effective January 1, 2022. The Company has assessed the impact of the amendment and it does not have a significant effect on the Company’s financial statements.

In May 2021, the IASB issued Deferred Tax related to Assets and Liabilities arising from a Single Transaction, which amended IAS 12 Income Taxes. The amendments will become effective January 1, 2023. The Company is assessing the impact of the amendment and does not expect it to have a significant effect on the Company’s financial statements.

1 These are alternative performance measures. Refer to the MD&A section entitled “Alternative Performance Measures”.

Page 34

In January 2020 and October 2022, the IASB issued amendments to International Accounting Standards 1 ("IAS 1"), Presentation of Financial Statements, to clarify that liabilities are classified as either current or non-current, depending on the rights that exist at the end of the reporting period. Liabilities should be classified as non-current if a company has a substantive right to defer settlement for at least 12 months at the end of the reporting period. Rights are in existence if covenants are complied with at the end of the reporting period, Settlement refers to the transfer to the counterparty of cash, equity instruments, or other assets or services. The amendments will be effective January 1, 2024, with early adoption permitted. Retrospective application is required on adoption. The Company is in the process of assessing the impact of this amendment to the Company's financial statements and does not expect it to have a significant effect on the Company's financial statements.

Changes in Accounting Policies and Critical Accounting Estimates and Judgments

Significant accounting policies as well as any changes in accounting policies are discussed in Note 2 "Significant Accounting Policies, Estimates and Judgements" of the December 31, 2022 consolidated financial statements.

5.0 ALTERNATIVE PERFORMANCE MEASURES

Alternative performance measures are furnished to provide additional information. These non-GAAP performance measures are included in this MD&A because these statistics are key performance measures that management uses to monitor performance, to assess how the Company is performing, and to plan and assess the overall effectiveness and efficiency of mining operations. These performance measures do not have a standard meaning within IFRS and, therefore, amounts presented 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 in accordance with IFRS.

Some of these alternative performance measures are presented in Highlights and discussed further in other sections of the MD&A. These measures provide meaningful supplemental information regarding operating results because they exclude certain significant items that are not considered indicative of future financial trends either by nature or amount. As a result, these items are excluded for management assessment of operational performance and preparation of annual budgets. These significant items may include, but are not limited to, restructuring and asset impairment charges, individually significant gains and losses from sales of assets, share based compensation, unrealized gains or losses, and certain items outside the control of management. These items may not be non-recurring. However, excluding these items from GAAP or Non-GAAP results allows for a consistent understanding of the Company's consolidated financial performance when performing a multi-period assessment including assessing the likelihood of future results. Accordingly, these Non-GAAP financial measures may provide insight to investors and other external users of the Company's consolidated financial information.

C1 Cash Costs Per Payable Pound of Copper Produced

C1 cash costs per payable pound of copper produced is a measure reflective of operating costs per unit. C1 cash costs is calculated as cash production costs of metal produced net of by-product credits and is a key performance measure that management uses to monitor performance. Management uses this measure to assess how well the Company’s producing mines are performing and to assess overall efficiency and effectiveness of the mining operations and assumes that realized by-product prices are consistent with those prevailing during the reporting period.

All-in Sustaining Costs Per Payable Pound of Copper Produced

All-in sustaining costs per payable pound of copper produced is an extension of the C1 cash costs measure discussed above and is also a non-GAAP key performance measure that management uses to monitor performance. Management uses this measure to analyze margins achieved on existing assets while sustaining and maintaining production at current levels. Consolidated All-in sustaining costs includes sustaining capital and corporate general and administrative costs.

Net debt / Net cash

Net debt / Net cash is a non-GAAP performance measure used by the Company to assess its financial position and is composed of Long-term debt (excluding deferred financing costs and purchase price accounting ("PPA") fair value adjustments), Due to related parties, Cash and cash equivalents and Short-term investments.

1 These are alternative performance measures. Refer to the MD&A section entitled “Alternative Performance Measures”.

Page 35

Attributable Net debt / Net cash

Attributable net debt / net cash is a non-GAAP performance measure used by the Company to assess its financial position and is calculated as net debt / net cash excluding amounts attributable to non-controlling interests.

Available Liquidity

Available liquidity is a non-GAAP performance measure used by the Company to assess its financial position and is composed of RCF credit capacity, the $520 million Mantoverde DP facility capacity, Cash and cash equivalents and Short-term investments. For clarity, Available liquidity does not include undrawn amounts on Mantoverde $60 million cost overrun facility from MMC nor the $260 million undrawn portion of the Gold stream from Wheaton related to the Santo Domingo project.

Operating Cash Flow before Changes in Working Capital per Common Share

Operating Cash Flow before changes in working capital per common share is a performance measure used by the Company to assess its ability to generate cash from its operations, while also taking into consideration changes in the number of outstanding shares of the Company.

Adjusted Net Income

Adjusted net income is a non-GAAP measure of net (loss) income as reported, adjusted for certain types of transactions that in our judgment are not indicative of our normal operating activities or do not necessarily occur on a regular basis.

Adjusted net income attributable to shareholders

Adjusted net income attributable to shareholders is a non-GAAP measure of Net (loss) income attributable to shareholders as reported, adjusted for certain types of transactions that in our judgment are not indicative of our normal operating activities or do not necessarily occur on a regular basis.

EBITDA

EBITDA is a non-GAAP measure of net (loss) income before net finance expense, tax expense, and depletion and amortization.

Adjusted EBITDA

Adjusted EBITDA is non-GAAP measure of EBITDA before the pre-tax effect of the adjustments made to adjusted net income (above) as well as certain other adjustments required under the RCF agreement in the determination of EBITDA for covenant calculation purposes.

The adjustments made to Adjusted net income and Adjusted EBITDA allow management and readers to analyze our results more clearly and understand the cash generating potential of the Company.

Sustaining Capital

Sustaining capital is expenditures to maintain existing operations and sustain production levels. A reconciliation of this non-GAAP measure to GAAP segment MPPE additions is included within the mine site sections of this document.

Expansionary Capital

Expansionary capital is expenditures to increase current or future production capacity, cash flow or earnings potential. A reconciliation of this non-GAAP measure to GAAP segment MPPE additions is included within the mine site sections of this document.

Realized copper price (per pound)

Realized price per pound is a non-GAAP ratio that is calculated using the non-GAAP measures of revenue on new shipments, revenue on prior shipments, and pricing and volume adjustments. Realized prices exclude the effects of the stream cash effects as well as TC/RCs. Management believes that measuring these prices enables investors to better understand performance based on the realized copper sales in the current and prior period.

1 These are alternative performance measures. Refer to the MD&A section entitled “Alternative Performance Measures”.

Page 36

Breakdown of C1 Cash Costs and All-in Sustaining Cost Per Pound of Payable Copper Produced Three Months Ended December 31, 2022

	Q4 2022	Q4 2022
	Pinto Valley Mantos Blancos Mantoverde Cozamin	Total
Payable copper produced (000s pounds) ($ millions) Production costs of metal produced (per financials) Transportation cost to point of sale Inventory (write-down) reversal Inventoryworkingcapital adjustments	31,989 30,565 23,067 12,222 72.3 65.6 84.0 19.0 (6.4) — — (1.4) — — (0.9) — 1.5 (7.7) 0.2 (0.9)	97,843 240.9 (7.8) (0.9) (6.9)
Cash production costs of metal produced ($/pound) Production costs Mining Milling/Processing G&A C1P sub-total By-product credits Treatment and sellingcosts	67.4 57.9 83.3 16.7 0.63 0.29 0.47 0.81 1.16 1.43 2.94 0.29 0.29 0.18 0.20 0.26	225.3 0.50 1.56 0.23
	2.08 1.90 3.61 1.36 (0.10) (0.02) — (0.27) 0.50 0.21 0.04 0.31	2.29 (0.07) 0.28
C1 cash cost($/poundproduced)	2.48 2.09 3.65 1.40	2.50
	0.01 0.06 — 0.07 — 0.69 — 0.03 0.94 0.44 0.55 0.69 0.02 0.11 0.07 — 0.02 0.05 0.05 0.01 0.02 — — 0.01	0.03 0.22 0.65 0.06 0.04 0.01 0.08
($/pound)
Royalties Production-phase capitalized stripping / Mineralized drift Sustaining capital Sustaining leases Accretion of reclamation obligation Amortization of reclamation asset Corporate G&A,excludingdepreciation

All-in sustaining cost adjustments All-in sustaining cost($/poundproduced)	1.01 1.35 0.67 0.81 3.49 3.44 4.32 2.21	1.09 3.59

1 These are alternative performance measures. Refer to the MD&A section entitled “Alternative Performance Measures”.

Page 37

Three Months Ended December 31, 2021

	Q4 2021	Q4 2021	Q4 2021
	Pinto Valley Cozamin		Total
Payable copper produced (000s pounds) ($ millions) Production costs of metal produced (per financials) Transportation cost to point of sale Inventory (write-down) reversal Realized gain on Mexican Peso derivatives Inventoryworkingcapital adjustments	35,826 13,945 69.1 17.5 (9.7) (1.3) 0.3 — — (0.6) 2.1 (0.5)		49,771 86.6 (11.0) 0.3 (0.6) 1.6
Cash production costs of metal produced ($/pound) Production costs Mining Milling/Processing G&A C1P sub-total By-product credits Treatment and sellingcosts	61.8 15.1 0.56 0.64 0.96 0.26 0.21 0.19		76.9 0.58 0.76 0.21
	1.73 1.09 (0.12) (0.39) 0.39 0.29		1.55 (0.20) 0.37
C1 cash cost($/poundproduced)	2.00	0.99	1.72
	0.02 — 0.33 0.02 — 0.01	0.13 0.03 0.58 — 0.01 0.01	0.05 0.01 0.39 0.02 — 0.01 0.13
($/pound)
Royalties Production-phase capitalized stripping / Mineralized drift Sustaining capital Sustaining leases Accretion of reclamation obligation Amortization of reclamation asset Corporate G&A,excludingdepreciation

All-in sustaining cost adjustments All-in sustaining cost($/poundproduced)	0.38 2.38	0.76	0.61
		1.75	2.33

1 These are alternative performance measures. Refer to the MD&A section entitled “Alternative Performance Measures”.

Page 38

Breakdown of C1 Cash Costs and All-in Sustaining Cost Per Pound of Payable Copper Produced Twelve Months Ended December 31, 2022

	2022	2022
	Pinto Valley Mantos Blancos Mantoverde Cozamin	Total
Payable copper produced (000s pounds) ($ millions) Production costs of metal produced (per financials) Transportation cost to point of sale Inventory write-down Inventoryworkingcapital adjustments	121,135 88,788 80,030 51,777 300.6 215.5 317.0 70.0 (23.8) — — (4.8) (0.1) — (0.9) — (8.0) (6.7) (28.9) (0.4)	341,730 903.1 (28.6) (1.0) (44.0)
Cash production costs of metal produced ($/pound) Production costs Mining Milling/Processing G&A	268.7 208.8 287.2 64.8 0.64 0.63 0.78 0.75 1.27 1.53 2.62 0.28 0.31 0.19 0.19 0.22	829.5 0.68 1.51 0.24
C1P sub-total By-product credits Treatment and sellingcosts	2.22 2.35 3.59 1.25 (0.10) (0.02) — (0.31) 0.51 0.21 0.04 0.30	2.43 (0.09) 0.29
C1 cash cost($/poundproduced)	2.63 2.54 3.63 1.24	2.63
	0.02 0.05 — 0.07 0.01 0.61 — 0.03 0.67 0.27 0.33 0.57 0.02 0.12 0.08 — 0.01 0.03 0.02 0.02 0.02 — 0.01 0.01	0.03 0.17 0.46 0.06 0.02 0.01 0.08
($/pound)
Royalties Production-phase capitalized stripping / Mineralized drift Sustaining capital Sustaining leases Accretion of reclamation obligation Amortization of reclamation asset Corporate G&A,excludingdepreciation

All-in sustaining cost adjustments All-in sustaining cost($/poundproduced)	0.75 1.08 0.44 0.70 3.38 3.62 4.07 1.94	0.83 3.46

1 These are alternative performance measures. Refer to the MD&A section entitled “Alternative Performance Measures”.

Page 39

Twelve Months Ended December 31, 2021

	2021	2021	2021
	Pinto Valley Cozamin		Total
Payable copper produced (000s pounds) ($ millions) Production costs of metal produced (per financials) Transportation cost to point of sale Inventory write-down Realized gain on Mexican Peso derivatives Inventoryworkingcapital adjustments	128,794 51,706 269.4 65.0 (28.1) (4.3) — — — (2.6) (0.9) (0.4)		180,500 334.4 (32.4) — (2.6) (1.3)
Cash production costs of metal produced ($/pound) Production costs Mining Milling/Processing G&A C1P sub-total By-product credits Treatment and sellingcosts	240.4 57.7 0.57 0.66 1.07 0.27 0.23 0.19		298.1 0.60 0.84 0.22
	1.87 1.12 (0.10) (0.45) 0.39 0.29		1.66 (0.20) 0.35
C1 cash cost($/poundproduced)	2.16	0.96	1.81
	0.01 0.05 0.33 0.02 — 0.01	0.13 0.04 0.45 — 0.01 0.01	0.05 0.04 0.38 0.01 0.01 0.01 0.10
($/pound)
Royalties Production-phase capitalized stripping / Mineralized drift Sustaining capital Sustaining leases Accretion of reclamation obligation Amortization of reclamation asset Corporate G&A,excludingdepreciation

All-in sustaining cost adjustments All-in sustaining cost($/poundproduced)	0.42 2.58	0.64	0.60
		1.60	2.41

1 These are alternative performance measures. Refer to the MD&A section entitled “Alternative Performance Measures”.

Page 40

Reconciliation of Net (debt) / Net cash

($ millions)	December 31, 2022	December 31, 2021
Long term debt (per financials), excluding deferred financing costs
of 3.4 and nil and PPA fair value adjustments of 7.5 and nil	(595.0)	—
Due to related party (per financials)	(60.0)	—
Add:
Cash and cash equivalents (per financials)	170.3	262.1
Short term investments(per financials)	1.6	2.3
Net(debt)/cash	(483.1)	264.4

Reconciliation of Attributable Net (debt) / Net cash

($ millions)	December 31, 2022	December 31, 2021
Attributable Long term debt, excluding deferred financing costs of
3.4 and nil and PPA fair value adjustments of 7.7 and nil	(439.0)	—
Attributable Due to related party	(42.0)	—
Add:
Attributable Cash and cash equivalents	139.5	262.1
Attributable Short term investments	1.6	2.3
Attributable Net(debt)/cash	(339.9)	264.4

Reconciliation of Available Liquidity

($ millions)	December 31, 2022 December 31, 2021
Revolving credit facility capacity	600.0 225.0 520.0 — (595.0) —
MVDP debt facility Long term debt (per financials), excluding deferred financing costs of 3.4 and nil and PPA fair value adjustments of 7.5 and nil Cash and cash equivalents (per financials) Short term investments(per financials)
	525.0 225.0 170.3 262.1 1.6 2.3
Available liquidity	696.9 489.4

Reconciliation of Cash Flow from Operating Activities per Common Share

($ millions,except share andper share amounts)	Q4 2022	Q4 2021	2022	2021
Cash flow from operating activities (per
financials)	24.4	94.5	87.4	553.3
Weighted average common shares - basic (per
financials)	687,628,025	407,588,618	625,434,676	405,800,210
Cash flow from operating activitiesper share	0.04	0.23	0.14	1.36

1 These are alternative performance measures. Refer to the MD&A section entitled “Alternative Performance Measures”.

Page 41

Reconciliation of Operating Cash Flow before Changes in Working Capital per Common Share

($ millions,except share andper share amounts)	Q4 2022	Q4 2021	2022	2021
Operating cash flow (per financials)	24.4	94.5	87.4	553.3
Adjustment for changes in working capital (per
financials)	73.0	4.8	133.4	(21.8)
Other non-cash changes	2.0	5.6	3.6	24.8
Operating cash flow before changes in
working capital2	99.4	104.9	224.4	556.3
Weighted average common shares - basic (per
financials)	687,628,025	407,588,618	625,434,676	405,800,210
Operating cash flow before changes in
working capital1 per share($)	0.14	0.26	0.36	1.37

2 Certain of prior period comparative figures have been reclassified to conform with the current year's presentation

1 These are alternative performance measures. Refer to the MD&A section entitled “Alternative Performance Measures”.

Page 42

Reconciliation of Adjusted Net Income

($ millions,except share andper share amounts)	Q4 2022 Q4 2021 2022 2021
Net (loss) income (per financials)	(28.4) 41.4 136.1 252.9 (1.2) 1.7 2.8 2.0 66.8 0.3 (133.2) 2.5 23.7 27.0 31.8 74.0 4.9 0.1 (23.0) 0.6 — — 19.4 — 14.8 3.6 26.9 3.8 1.4 — 4.2 — — — — (5.1) 0.2 — (0.2) — — — (8.0) — — — — (92.4) — 0.1 — 1.1 — 0.1 0.3 0.4 (0.4) — (2.8) — (28.9) (1.1) 30.2 1.8
Inventory (reversal) write-down Unrealized loss (gain) on derivative contracts Share-based compensation expense Unrealized foreign exchange loss (gain) Mantos acquisition transaction costs Other expense - non-recurring fees Severance costs Change in fair value of contingent receivable (RE:Minto) Loss (gain) on disposal of assets
Gain on extinguishment of debt
Reversal of impairment on mineral properties (RE: Santo Domingo) Non-recurring fees on streaming transactions G&A - care and maintenance Insurance proceeds received Tax effect on the above adjustments
Adjusted net income	52.9 73.2 84.5 241.6 40.8 73.2 85.6 242.1 12.1 — (1.1) (0.5)

Adjusted net income attributable to:
Shareholders of Capstone Copper Corp. Non-controlling interests
	52.9 73.2 84.5 241.6 687,628,025407,588,618625,434,676405,800,210
Weighted average common shares - basic (per financials)
Adjusted net income attributable to shareholders of Capstone Copper Corp. per common share - basic ($)	0.06 0.18 0.14 0.60
Weighted average common shares - diluted (per financials)	691,984,440416,178,876630,179,251414,093,484 0.06 0.18 0.14 0.58
Adjusted net income attributable to shareholders of Capstone Copper Corp. per common share - diluted($)

1 These are alternative performance measures. Refer to the MD&A section entitled “Alternative Performance Measures”.

Page 43

Reconciliation of Adjusted EBITDA

($ millions)
	Q4 2022	Q4 2021	2022	2021
Net (loss) income (per financials)	(28.4)	41.4	136.1	252.9
Net finance costs	9.3	6.3	27.8	18.7
Taxes	(30.7)	15.7	57.6	80.9
Depletion and amortization	43.3	24.7	176.2	93.2
EBITDA	(6.5)	88.1	397.7	445.7
Share-based compensation expense	23.7	27.0	31.8	74.0
Inventory (reversal) write-down	(1.2)	1.7	2.8	2.0
Realized loss on MVDP financing derivatives	5.4	—	41.0	—
Unrealized loss (gain) on derivatives	66.8	0.3	(133.2)	2.5
(Gain) loss on disposal of assets	0.2	—	(0.2)	—
Gain on extinguishment of debt	—	—	(8.0)	—
Unrealized foreign exchange loss (gain)	4.9	0.1	(23.0)	0.6
Mantos acquisition transaction costs	—	—	19.4	—
Other expense - non-recurring fees	14.8	3.6	26.9	3.8
Severance costs	1.4	—	4.2	—
Unrealized provisional pricing adjustment
(revenue)	(37.8)	(6.5)	(9.4)	4.9
Unrealized loss on QP hedges	10.0	—	9.5	—
Insurance proceeds received	(0.4)	—	(2.8)	—
Reversal of impairment on mineral properties	—	—	—	(92.4)
Amortization of deferred revenue - non-cash	(0.8)	(1.1)	(3.9)	(4.9)
Non-recurring financing fees on streaming	—	0.1	—	1.1
Change in fair value of contingent receivable	—	—	—	(5.1)
Adjusted EBITDA	80.5	113.3	352.8	432.2
Adjusted EBITDA by mine
Pinto Valley	32.0	74.3	167.9	281.0
Mantos Blancos	27.3	—	78.5	—
Mantoverde	(4.6)	—	(9.3)	—
Cozamin	32.6	45.8	137.9	171.7
Other	(6.8)	(6.8)	(22.2)	(20.5)
Adjusted EBITDA	80.5	113.3	352.8	432.2

1 These are alternative performance measures. Refer to the MD&A section entitled “Alternative Performance Measures”.

Page 44

Additional Information and Reconciliations

Continuity Schedule of Concentrate and Cathode Inventories

	Pinto Valley Mantos Blancos Mantoverde Cozamin*
	Copper (dmt) Cathode (tonnes) Copper (dmt) Cathode (tonnes) Cathode (tonnes) Copper (dmt)
Dec. 31, 2020 Production Sales	14,514 34 — — — 1,199 63,935 527 — — — 19,897 (71,056) (485) — — — (19,779)
Mar. 31, 2021 Production Sales	7,393 76 — — — 1,317 49,738 497 — — — 23,583 (53,236) (502) — — — (23,761)
Jun. 30, 2021 Production Sales	3,895 71 — — — 1,139 46,553 538 — — — 23,792 (46,071) (443) — — — (23,491)
Sep. 30, 2021 Production Sales	4,377 166 — — — 1,440 64,133 621 — — — 24,379 (59,016) (666) — — — (25,054)
Dec. 31, 2021 Production Sales	9,494 121 — — — 765 56,676 636 — — — 21,982 (62,216) (603) — — — (21,938)
Mar. 31, 2022 Production Sales	3,954 154 146 949 3,284 809 50,308 555 8,652 3,714 12,687 24,102 (51,278) (584) (8,543) (3,637) (14,223) (23,646)
Jun. 30,2022	2,984 125 255 1,026 1,748 1,265
Production Sales	49,015 719 9,593 4,003 11,593 23,642 (48,672) (643) (9,036) (4,097) (11,560) (23,701)
Sep. 30,2022	3,327 201 812 932 1,781 1,206
Production Sales	52,360 711 9,975 4,182 10,413 22,071 (50,516) (763) (10,206) (4,147) (10,811) (23,076)
Dec. 31,2022	5,171 149 581 967 1,383 201

* Reported copper concentrate production at Pinto Valley noted in the “Pinto Valley Mine” section of this document includes copper produced in concentrate and in circuit and therefore differs from the copper concentrate production amount noted above.

1 These are alternative performance measures. Refer to the MD&A section entitled “Alternative Performance Measures”.

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Sales from Operations

	2022	2021
	Q1 Q2 Q3 Q4 Total	Q1 Q2 Q3 Q4 Total
Copper (tonnes) Concentrate Pinto Valley Mantos Blancos Cozamin	14,888 12,884 13,058 13,417 54,247 977 8,228 8,819 9,957 27,981 5,592 5,935 5,989 5,603 23,119	17,017 13,150 11,516 14,292 55,975 — — — — — 4,799 5,919 5,989 6,286 22,993
Total Concentrate	21,457 27,047 27,866 28,977 105,347	21,816 19,069 17,505 20,578 78,968
Cathode Pinto Valley Mantos Blancos Mantoverde	604 585 643 763 2,595 699 3,638 4,097 4,147 12,581 2,748 14,224 11,560 10,811 39,343	485 503 443 666 2,097 — — — — — — — — — —
Total Cathode	4,051 18,447 16,300 15,721 54,519	485 503 443 666 2,097
Total Copper	25,508 45,494 44,166 44,698 159,866	22,301 19,572 17,948 21,244 81,065
Zinc (000 pounds) Cozamin Lead (000 pounds) Cozamin Molybdenum (tonnes) Pinto Valley Silver (000s ounces) Cozamin Mantos Blancos Pinto Valley	1,005 (11) — 677 1,671 — — — — — 17 22 (2) 66 103 352 327 353 284 1,316 — 378 252 312 942 66 68 54 57 245	2,110 1,789 505 386 4,790 302 82 — (1) 383 — — — — — 309 355 363 399 1,426 — — — — — 86 55 57 72 270
Total	418 773 659 653 2,503	395 410 420 471 1,696
Gold (ounces) Pinto Valley Cozamin	178 268 44 374 864 — — — — —	630 156 369 537 1,692 1 — — — 1
Total	178 268 44 374 864	631 156 369 537 1,693

1 These are alternative performance measures. Refer to the MD&A section entitled “Alternative Performance Measures”.

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6.0 SELECTED QUARTERLY FINANCIAL INFORMATION

($ millions, exceptper share data)	Q4 2022(i)	Q3 2022	Q2 2022(ii)	Q1 2022(iii)	Q4 2021(iv)	Q3 2021	Q2 2021(v)	Q1 2021(vi)
Revenue	362.1	308.7	356.6	268.1	215.9	165.4	209.4	204.1
Earnings (loss) from mining operations	75.7	(11.2)	37.3	106.0	102.5	62.8	102.8	92.5
Net (loss) income attributable to
shareholders	(20.9)	34.1	75.1	34.0	41.4	35.0	49.4	101.0
Net (loss) income per share
attributable to shareholders - basic	(0.03)	0.05	0.11	0.08	0.10	0.09	0.12	0.25
Net (loss) income per share
attributable to shareholders - diluted	(0.03)	0.05	0.11	0.08	0.10	0.08	0.12	0.24
Operating cash flow before changes in
non-cash working capital	99.4	13.9	40.7	70.4	104.9	67.1	140.4	244.5
Capital expenditures (including
capitalized stripping)	204.9	148.5	206.6	111.5	42.2	36.0	50.4	28.4

(i) Net loss in Q4 2022 includes $24 million of share unit expense and $64 million of net loss on derivative instruments.

(ii) Revenue, Earnings from mining operations, Net income and Operating cash flow before changes in working capital in Q2 2022 includes $45.5 million of negative non-cash provisional pricing adjustments.

(iii) Net income in Q1 2022 includes $20 million of share unit expense and $19.9 million of transaction and integration costs as a result of the Mantos Transaction.

(iv) Net income in Q4 2021 includes $27 million of share unit expense.

(v) Net income in Q2 2021 includes $19 million of share unit expense.

(vi) Net income in Q1 2021 includes $92 million of impairment reversal on mineral properties as well as $27 million of share unit expense.

7.0 OUTSTANDING SHARE DATA AND DILUTION CALCULATION

The Company is authorized to issue an unlimited number of common shares, without par value. The table below summarizes the Company’s common shares and securities convertible into common shares as at February 17, 2023:

Issued and outstanding	691,756,046
Share options outstanding at a weighted average exercise price of $1.95	7,134,253
Treasury share units outstanding at a weighted average exercise price of $5.40	1,951,011
Fullydiluted	700,841,310

Under the Treasury Share Unit Plan, the Company has the ability to settle the units in shares up to 3.5% of the total issued and outstanding common shares of Capstone Copper.

8.0 MANAGEMENT'S REPORT ON INTERNAL CONTROLS AND OTHER INFORMATION

Disclosure Controls and Procedures (“DC&P”)

Capstone Copper's management, with the participation of its Chief Executive Officer & Director and Senior Vice President & Chief Financial Officer, has designed DC&P which provide reasonable assurance that material information related to Capstone Copper is identified and communicated in a timely manner.

Internal Control Over Financial Reporting (“ICFR”)

Capstone Copper’s management, with the participation of its Chief Executive Officer & Director and Senior Vice President & Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over financial reporting (“ICFR”). Any system of ICFR, no matter how well designed, has inherent limitations and cannot provide absolute assurance that all misstatements and instances of fraud, if any, within the Company have been prevented or detected. Capstone Copper's ICFR is designed to provide reasonable assurance regarding the

1 These are alternative performance measures. Refer to the MD&A section entitled “Alternative Performance Measures”.

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reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS.

The Company uses the 2013 Internal Control – Integrated Framework published by The Committee of Sponsoring Organizations of the Treadway Commission (“2013 COSO framework”) as the basis for assessing its ICFR.

Management performed an evaluation of Capstone Copper's ICFR and concluded that, as at December 31, 2022, ICFR were designed and operating effectively so as to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with International Financial Reporting Standards (“IFRS”).

Other Information

Approval

The Board of Directors of Capstone Copper approved the disclosure contained in this MD&A. A copy of this MD&A will be provided to anyone who requests it from the Company. A copy of this MD&A is also available for viewing at the Company’s website at www.capstonecopper.com or on the Company’s profile on the SEDAR website at www.sedar.com.

Additional Information

Additional information is available for viewing at the Company’s website at www.capstonecopper.com or on the Company’s profile on the SEDAR website at www.sedar.com.

9.0 NATIONAL INSTRUMENT 43-101 COMPLIANCE

Unless otherwise indicated, Capstone Copper has prepared the technical information in this MD&A (“Technical Information”) based on information contained in the technical reports and news releases (collectively the “Disclosure Documents”) available under Capstone Copper’s company profile on SEDAR at www.sedar.com. Each Disclosure Document was prepared by or under the supervision of a qualified person (a “Qualified Person”) as defined in National Instrument 43-101 – Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators (“NI 43-101”). Readers are encouraged to review the full text of the Disclosure Documents which qualifies the Technical Information. Readers are advised that Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. The Disclosure Documents are each intended to be read as a whole, and sections should not be read or relied upon out of context. The Technical Information is subject to the assumptions and qualifications contained in the Disclosure Documents.

Disclosure Documents include the National Instrument 43-101 compliant technical reports titled "NI 43-101 Technical Report on the Cozamin Mine, Zacatecas, Mexico" effective October 31, 2020, “NI 43-101 Technical Report on the Pinto Valley Mine, Arizona, USA” effective March 31, 2021, “Santo Domingo Project, Region III, Chile, NI 43-101 Technical Report” effective February 19, 2020, and "Mantos Blancos Mine NI 43-101 Technical Report Antofagasta / Región de Antofagasta, Chile" and "Mantoverde Mine and Mantoverde Development Project NI 43-101 Technical Report Chañaral / Región de Atacama, Chile", both effective November 29, 2021.

The disclosure of Scientific and Technical Information in this MD&A was reviewed and approved by Clay Craig, P.Eng., Director, Mining & Strategic Planning (technical information related to Mineral Reserves at Pinto Valley and Cozamin), and Cashel Meagher, P.Geo., President and Chief Operating Officer (technical information related to project updates at Santo Domingo and Mineral Reserves and Resources at Mantos Blancos and Mantoverde) all Qualified Persons under NI 43-101.

10.0 RISKS AND UNCERTAINTIES

For full details on the risks and uncertainties affecting the Company, please refer to the Company's Management Information Circular dated December 19, 2022 and Preliminary Short Form Base Shelf Prospectus dated February 3, 2023 (See section entitled "Risk Factors"). This document is available for viewing on the Company’s website at www.capstonecopper.com or on the Company’s profile on the SEDAR website at www.sedar.com.

1 These are alternative performance measures. Refer to the MD&A section entitled “Alternative Performance Measures”.

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AI assistant

Capstone Copper Corp. — Management Reports 2023

48344_rns_2023-02-17_3a0f6106-5182-4286-9288-7949351c189b.pdf

TABLE OF CONTENTS

MANAGEMENT’S DISCUSSION AND ANALYSIS OF CAPSTONE COPPER CORP. FOR THE YEAR ENDED DECEMBER 31, 2022

CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION

1.0 BUSINESS OVERVIEW

2.0 Q4 2022 HIGHLIGHTS AND SIGNIFICANT ITEMS

Operating Highlights

Consolidated

Consolidated Financial Highlights

Mantos and Capstone Mining Transaction

Mantoverde Development Project

Mantos Blancos Concentrator Debottlenecking Project

Mantos Blancos Phase II

Mantoverde Phase II

Santo Domingo

Mantoverde - Santo Domingo District Integration Plan

Mantoverde - Santo Domingo Cobalt Feasibility Study

PV4 Study

Corporate Exploration Update

2.1 2023 Guidance

Capstone’s 2023 operating and capital guidance is as follows:

Key C1 Cash costs[1] input assumptions:

2023 Capital and Exploration Guidance

3.0 OPERATIONAL REVIEW

3.1 Pinto Valley Mine – Miami, Arizona Operating Statistics

Q4-2022 vs Q4-2021 Insights

YTD-2022 vs YTD-2021 Insights

Capital Expenditures

3.2 Mantos Blancos – Antofagasta, Chile Operating Statistics

Operational and C1 Cash Costs[1] Update

Capital Expenditures

3.3 Mantoverde (70% ownership) – Atacama, Chile Operating Statistics

Capital Expenditures

3.4 Cozamin Mine – Zacatecas, Mexico Operating Statistics

Q4-2022 vs Q4-2021 Insights

YTD-2022 vs YTD-2021 Insights

Capital Expenditures

3.5 Santo Domingo Project – Chile (Copper and Iron)

Investing Activities

4.0 FINANCIAL REVIEW

4.1 Consolidated Results

Consolidated Net Income Analysis

4.2 Revenue Analysis

Revenue by Mine

Provisionally Priced Copper

Realized Copper Prices[1]

Reconciliation of Realized Copper Price[1]

4.3 Consolidated Cash Flow Analysis[2]

4.4 Liquidity and Financial Position

Credit Facilities

Mantoverde Development Project Facility

Mantoverde Cost Overrun Facility ("COF")

Revolving Credit Facility

Mantos Blancos Concentrator Development Project Debt Facility

Hedging

Financial Capability

Capital Management

4.5 Commitments

Royalty Agreements

Agreement with Osisko Bermuda Limited ("Osisko")

Agreement with Jetti Resources, LLC (“Jetti”)

Off-take agreements

Construction and other operating contracts

Minto surety bond indemnification

Other

Contractual Obligations and Commitments

Provisions

Precious Metal Streams

Cozamin Silver Stream

Santo Domingo Gold Stream

Purchase of Non-Controlling Interest from KORES

Off Balance Sheet Arrangements

4.6 Transactions with Related Parties

4.7 Accounting Changes

Changes in Accounting Policies and Critical Accounting Estimates and Judgments

5.0 ALTERNATIVE PERFORMANCE MEASURES

C1 Cash Costs Per Payable Pound of Copper Produced

All-in Sustaining Costs Per Payable Pound of Copper Produced

Capstone Copper Corp. Management Reports 2023