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Dear Reader,
The latest drilling results, released June 17, from the Little Deer copper project located near Springdale, Newfoundland & Labrador, Canada are certainly very encouraging. To read the full release entitled "Cornerstone and Thundermin report intersection of 2.2% copper over 74 metres including an interval of 6.5% Cu over 8.6 metres on the Little Deer Joint Venture, Newfoundland" please go to here and check here.
This apparently new copper zone that was recently intersected in hole LD-98-07D is located approximately 50 m north of the high-grade copper horizon that has been the focus of Cornerstone's and Thundermin's drilling program on the property to date (Table 1, News Release dated June 9, 2008).
Copper assays ran 2.2% Cu over a core length of 74.0 m, including intervals of 6.5% Cu over 8.6 m, 2.6% Cu over 13.0 m; 2.8% Cu over 7.3 m and 2.9% Cu over 10.6 m. We are awaiting assay results on Gold and Cobalt.
Our drilling to date has been designed to test the historical copper-bearing horizon on the property but this latest intersection appears to be a new discovery and adds a potentially whole new dimension to this project. The partners are excited about these results and look forward to further drilling on the project.
In other news recently Cornerstone and Altius have formed an alliance to explore for copper in the Labrador Trough. See here for details.
ECUADOR:
Finally it seems that some life is trickling back into some Ecuadorian stocks as there are some 'encouraging' reports through some news groups such as the one at seekingalpha.com. At Cornerstone we are maintaining a wait and see attitude while working closely with the Ecuador Chamber of Mines and the MMP as one of the eight companies that now form the "Consejo de Mineras Canadienses" (CONMIN). This group of eight responsible Canadian mining and exploration companies (including CESA, Cornerstone's wholly owned Ecuadorian subsidiary) is working hard to find a way to ensure that the interests of the companies are protected through the regulations of the mandate.
Before the mining moratorium was imposed on April 18, 2008 Cornerstone was working on the Macara Gold project with Newmont, the Shyri Gold project with Coastport, the La Plata Gold rich VMS project with Sultana and other 100% wholly owned promising Cornerstone properties. Investors may refresh their memories on some of these projects by visiting here.
For a complete overview of all of Cornerstone's properties and JV projects visit here.
COMMENTARY:
Investors often express the opinion that the Cornerstone share price does not reflect the value of its various properties and projects. In some cases a company with a single project and similar share structure may experience a higher share price and more robust liquidity. Over the years we've struggled with that and in conversation with executives from other companies that subscribe to the JV model it appears that it is an issue common to prospect generators. One letterwriter expressed the opinion that for the most part the average investor wants to focus on one project. As most investors may not have the time to do a lot of DD they find the variety of projects pursued by prospect generators to be somewhat overwhelming. Therefore they may opt to invest in a single project company.
On the other hand there are a number of very successful junior resource investors who invest primarily in prospect generators such as Cornerstone. One well known Investor compares buying stock in any junior resource company to buying a lottery ticket -- very high risk and very high potential returns. By investing in a single project company the investor gets one lottery ticket. However by investing in a prospect generator the investor gets a number of 'lottery tickets' that is equal to the number of properties and JV projects, all in one investment. The odds for success increases and sometimes success can occur unexpectedly on projects that are undervalued by the market.
Prospect generators that subscribe to the JV model fund work on their projects primarily with OPM (other partner's money), and at any given time Cornerstone has several such projects ongoing, each one in a sense constituting a 'lottery ticket'. For the company and its shareholders it also mitigates the inherent risk in exploration.
Obviously each Investor has to find the niche that fits his risk threshold and investment strategy. For those who choose to invest in junior resource companies, investment in prospect generators, in our opinion, is worthy of consideration.
For those who would like to find out more about Cornerstone, its strategy, and expectations for 2008 please contact either of the undersigned.
Best regards,
Colin
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