26 Kyle Avenue
Mount Pearl, NL
Canada A1N 4R5
| ||January 25, 2011|
CEO Letter to Shareholders
Author: Glen H. McKay
| ||Dear Shareholder;|
To those of you who held on to your shares in CGP through the past three years, we thank you for your patience and confidence. To those of you who may be returning or to new investors, we welcome you.
We've been through a very challenging time since 2007 when the winds of political change were strengthening in Ecuador. The moratorium imposed on exploration and mining in Ecuador in April 2008 followed by the worldwide meltdown in capital markets created a perfect storm that tested our tenacity to the limit. Our commitment to realize significant returns for our shareholders along with pure determination and careful management helped your company persevere, and the continued support of our JV partners underscored the high potential of our exploration projects.
We were very pleased to put that difficult period behind us with our January 4th announcement that we had received the long awaited approval to proceed with advanced exploration of the Gama prospect on our Shyri property in southern Ecuador. We expect drilling to commence early to mid-February.
During 2006 and 2007 there was heightened anticipation about our Shyri property. Several mining analysts and letter writers who had visited it were of the opinion that all three prospects on the Shyri property - Gama, Vetas Grandes and Cañaribamba - were high priority targets. Ongoing work completed there up until the Mining Moratorium added positively to the database.
Based on the geological potential of that project alone, many analysts and letterwriters were recommending CGP before the moratorium. CGP traded as high as $0.89 at that time. One should keep in mind that the price of gold in 2007 was about 50% of what it is today. Also your company has many more 'irons in the fire' than it did in 2007.
To view comments by Dr. Jeffery W. Hedenquist on the Shyri property or to view other information about the Shyri property and its various high potential targets, please visit www.cornerstoneresources.com.
We hope to receive the required permits on our other Shyri prospects and additional projects in the next few weeks. Concessions covering Cornerstone's other project areas - Shyri (7), Macara (1), Monterrey (2) and Bella Maria (1) - are all at an early stage of exploration.
In addition to the JV with Intrepid Mines on our Shyri property, reconnaissance work is currently ongoing on the Macara property in Ecuador in partnership with Newmont Ventures Ltd. Over the past two years our team has also been actively reviewing exploration opportunities in other mining friendly South American jurisdictions. We have reached agreements on two such opportunities and we will announce the full details on the successful conclusion of the formal earn-in agreements.
We also have Option, JV and Alliance partnerships on five of our projects in Atlantic Canada: 1) Thundermin Resources Inc. on the Little Deer Copper Project; 2) Altius Resources Inc. on the Labrador Trough Copper Project; 3) Vale Exploration Canada Limited on the Red Cliff -- Deer Harbour Copper Project on the Bonavista Peninsula; 4) Rare Earth Metals Inc. on the Letitia Lake rare earth element (REE) project in central Labrador; and 5) Great Western Minerals Group Ltd on the Chaleur REE project in northern New Brunswick. Cornerstone's experienced team of geologists is also continuing to advance our various wholly-owned properties elsewhere in Atlantic Canada.
We're particularly excited about the Little Deer JV Copper Project located in the Green Bay Mining District of Newfoundland. Over the past three years we've completed approximately 36,000 metres of diamond drilling in 57 holes. In October we announced that an updated NI 43-101 compliant mineral resource estimate had been completed by Scott Wilson RPA, with estimated Indicated Resources of 1,150,500 t at an average grade of 2.8% Cu within the Little Deer Zone and additional Inferred Resources of 1,227,300 t at an average grade of 2.2% Cu within the Little Deer Zone and 1,108,200 t at an average grade of 1.9% Cu within the Footwall Zone. Also in October, we announced excellent metallurgical results from scoping level test work undertaken at SGS Lakefield Research Limited. These tests indicate that a saleable, high grade copper concentrate grading over 28% copper with over 97% recovery and free of any deleterious elements can be produced from the Little Deer Deposit. In December, we commenced a new 12,000 to 13,000 m drilling program designed to expand the mineral resources. The initial results announced in our January 20th news release support our belief that the identified shallower mineralization has the potential to help build the resource to the 5,000,000 tonne level we've been targeting since we started drilling in 2007. Copper prices are forecast to remain high in the short- to medium-term, and this combined with potential for a high-quality product bodes well for this project.
We continue to be focused on generating new projects that have great potential for discovery. Cornerstone leverages its own exploration funding through joint venture and strategic partnerships, providing shareholders with potential for success at lower risk. We have great confidence in our projects and we look forward to advancing them to create significant shareholder value for investors who have patiently supported the Company.
To keep updated on news from Cornerstone please ensure that you are subscribed to our email alerts by updating your profile at http://www.cornerstoneresources.com/s/SendMessage.asp. We also encourage you to take the time to familiarize yourself with our other projects and our people by visiting our website.
As usual your comments, suggestions and inquiries are very welcome.
Glen H. McKay
Executive Vice -- Chairman, President & CEO
Cornerstone Capital Resources Inc.
Excellence in Mineral Exploration
"People, Process, Projects"
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