26 Kyle Avenue
Mount Pearl, NL
Canada A1N 4R5
| ||January 15, 2009|
Author: Colin McKenzie
| ||Certain statements contained in this investor update may be considered as forward-looking. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from estimated or implied results.|
We at Cornerstone sincerely wish you, your colleagues, business associates and family the very best for a healthy and prosperous 2009. There is a lot of financial ground to make up after the devastating close to 2008 but there are early indications that the secular commodities bull market may yet prevail over the longer term. Gold has remained relatively stable and I tend to agree with the many commentators and analysts who recommend gold as a haven while the Fed is creating mountains of dollars to deal with deep crisis in the US. Base metals have also shown some life in the new year with nickel jumping about $1/lb. Copper and zinc prices also firmed above recent lows. Unfortunately, as most of us learned to our detriment, the market can be sideswiped by bad news from a variety of unexpected sources and that is likely to continue in 2009. I'm probably not going out on a limb by predicting continued market volatility and general risk aversion by investors.
Cornerstone continues to closely monitor political developments in Ecuador. A workable mining law is the prerequisite to getting exploration back on track on our high quality precious metal projects. Unexpectedly, the new mining received its second debate in the Legislative Commission on January 12 and was approved by a vote of 50 to 15. Following presidential approval, the new law should be official before the end of the month. In the meantime, the mining mandate unofficially expired on January 5 making enforcement of its more egregious provisions if not illegal then at least administratively more difficult.
That's great news and a key milestone in getting our projects back on track. Unfortunately, however, the new mining law has not passed as an organic law; that is, a high level statute that has precedence over other laws. While it is not clear how the mining law will work in conjunction with other new laws governing such things as the environment, water and indigenous rights; the lack of organic status will likely mean a more complex operating environment for exploration and mining projects. The congress also introduced 11 minor revisions during the second debate, but these do not represent a material departure from earlier drafts.
We are in regular contact with our partners in Ecuador, Newmont and Coastport, to keep them abreast of the evolving situation. While the agreements with both companies remain under force majeure, all parties are anxious to get back to work on the exceptional precious metal opportunities represented by the Macara (Newmont) and Shyri (Coastport) properties.
Late last year Newmont and Cornerstone received the results of the BLEG geochemical survey for Macara. BLEG (bulk leach extractable gold) is a regional sampling technique widely used by Newmont for discriminating gold mineralized vs non-mineralized belts. Both companies were encouraged by the results which highlighted the gold potential of a large region within the area of interest.
We also continue to evaluate exploration opportunities in other jurisdictions. Cornerstone personnel have built up a wide network of contacts in various South American countries over the years which enables us to keep an ear to the ground for low entry cost properties with unrecognized exploration potential.
In Canada, the Little Deer joint venture with Thundermin Resources ended the year on a positive note. In November the partners announced very exciting results in LD-08-15, a follow-up hole to LD-98-07D. LD-08-15 intersected 16.6 m of 4.7% Cu within a wider interval of 46.6 m grading 2.7% Cu about 30 m away from a 74.0 m wide mineralized section in LD-98-07D. Subsequently, LD-08-16 and 17 were completed before the end of last year; results will be reported as they become available. LD-08-16 is the deepest hole of the program to date. The Little Deer deposit remains open in three directions.
Mountain Lake Resources, who has an option on Cornerstone's Bobby's Pond property in central Newfoundland, reported encouraging results from a small drilling program in December. One hole encountered 0.6 m of massive sulphides grading 7.0% Zn, 0.15% Cu, 4.7% Pb, 80.6 g Ag/t and 1.0 g Au/t within a 3.1 m wide mineralized zone. The new mineralized zone is in the northeast part of the Cornerstone claims in a previously undrilled area. Mountain Lake is recommending more drilling for the prospect.
The 14 km sq. Cornerstone property surrounds Mountain Lake's 1.1 million tonne Bobby's Pond Zn-Cu-Pb deposit. Mountain Lake is earning a 51% interest in the claims by spending $Cdn 2.7 million and making payments totaling $100,000. Bobby's Pond is located 45 km west by road from Teck's Duck Pond base metal mine.
Cornerstone is also evaluating results of two airborne radiometric and magnetic surveys completed last fall. The Chaleur survey in northern New Brunswick covered a large package of subaerial felsic and mafic volcanic rocks which government surveys have highlighted as prospective for uranium mineralization. Despite some recent changes to uranium prospecting regulations in the province, the Cornerstone property has not been affected. Cornerstone and partner Altius Minerals completed a large survey on their 4236 claim Labrador Trough property. This under-explored belt has several known occurrences of copper and uranium which the partners believe hold excellent potential for sediment-hosted and IOCG-style deposits.
Finally, we would like to invite our investors to visit Cornerstone at booth B53 during the Cordilleran Round-up in Vancouver, January 26 to 29.
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