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Address:
26 Kyle Avenue
Mount Pearl, NL
Canada A1N 4R5
Telephone:
(709) 745-8377
Fax:
(709) 747-1183
Toll Free:
(877) 277-8377
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| | April 16, 2010
Corporate Update
Author: Colin McKenzie
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| | Cornerstone Corporate Update, Q1 - 2010:
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. While Cornerstone anticipates that subsequent events may cause its views to change, it expressly disclaims any obligation to update the forward-looking statements contained herein.
Dear Shareholders and Subscribers:
Ecuador
You may have seen the March 25th reports of the announcement by Ecuador's newly-appointed Vice Minister of Mines, Luis Bustamente, at Ecuador's mining exposition that 12 companies would receive permission to resume exploration work. The answer to the obvious question is: Yes, Cornerstone is one of the 12. The follow-up of question of When, remains unclear however. While we have received a water permit in support of a drill program on Shyri, we still lack two final approvals -- one from the Ministry of Environment for our Environmental Management Plans and a second from the Ministry of Communities. For the first, we have submitted all required documentation and it has passed internal scrutiny within the ministry. We just await a sign-off from the Vice Minister. The Ministry of Communities approval requires a project socialization process (i.e. community meetings) which is being carried out by the government. For that one, we are queued up with the other companies as the government schedules the information sessions.
Despite the regulatory delays we are very pleased that Newmont has agreed to continue with the Macará strategic alliance in southern Ecuador. Under the terms of the alliance, Cornerstone completed expenditures of $1.0 M late last year by carrying out reconnaissance geological and geochemical surveys throughout the 2000 km2 area of influence (AOI). Newmont was very impressed with the results of those surveys and has agreed to enter Phase II of the agreement in which they will spend $2.7M over 4 years to earn a 51% interest in any properties within the AOI. Newmont also agreed to spend $300,000 this year despite the fact that we still require final approvals to work on the Bellavista concession and the lack of a clear process by which new concessions can be acquired. Cornerstone will continue as project manager for the alliance which we see as a great vote of confidence from Newmont that we can provide technically sound, value-added service for them in Ecuador.
We are also continuing planning with Intrepid Mines (TSX -- IAU) for the launch of the Shyri exploration program under the terms of our recent option agreement. Intrepid has already met the initial financial conditions of the Shyri earn-in which required them to make of $500,000 private placement in Cornerstone at a 20% premium to market ($0.21/share) and a cash payment of $250,000. Once final approvals are in place Intrepid will spend $1.0 M in exploration, including drilling at Gama, using Cornerstone's services as project manager. We expect to have the definitive option agreement in place in the near future but in the meantime we are operating under the binding term sheet signed with Intrepid on October 29, 2009.
Little Deer Copper
Cornerstone and partner Thundermin resumed drilling at Little Deer in early February after approving a planned $1.5 M, 11,000 m program designed to increase the mineral resource inventory of the deposit. As noted in our news release this week, we are continuing to intersect strong copper mineralization over mineable widths in the deeper regions of the deposit. Hole deepenings in the current program have discovered the existence of a northern lens of mineralization not previously tested. For example, deepening hole LD-00-12, which previously intersected 3.8% Cu over 10.7 m, found a second zone of 4.5% Cu over 3.1 m. Holes 31 and 16B both intersected thick sections of the main zone at about 700 m below surface. Hole 03A on the east side of the deposit was a disappointment because it stopped short of the target due to drilling problems. However, the extensive alteration and low grade mineralization in the hole are a strong indication that the deposit continues in this area.
The current program is utilizing two drills and is about 45% through the approved program.
We also completed an induced polarization (IP) geophysical survey this quarter in the area of high grade gold boulders to the southwest of the Little Deer deposit. While the results are still being evaluated by our geophysical consultant, targets generated by the survey will be tested during the current drill program.
El Strato Gold
Cornerstone maintains a portfolio of gold properties in Newfoundland that warrant further exploration. Over the past two months we have taken advantage of winter ice to conduct geophysical surveys over the strike extension of high grade gold mineralization which occurs along the shores of Micmac Lake in west-central Newfoundland. The surveys have identified a strongly anomalous trend under the lake and immediately south of the El Strato gold showing on a small island in the lake. Once all data are interpreted a drill program is planned for the area this summer.
New Joint Ventures
In keeping with our business model of generating opportunities for joint venture we have recently brought in a new partner in Labrador. Rare Earth Metals Inc. has optioned our Letitia Lake claims in the Central Mineral Belt and are committed to spend at least $50,000 on Cornerstone's claims this year as part of their regional assessment of the area for its rare earth metal potential. Cornerstone also received payments of $10,000 and 20,000 shares of Rare Earth Metals.
Cornerstone is also in advanced negotiations on properties in Newfoundland and New Brunswick and expects to announce new joint ventures in the near future. This is a validation of our strategy of acquiring good potential geological environments through low cost staking and developing targets with which to attract new partners.
Best regards.
Colin
Colin B McKenzie,
President & CEO |
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