Cornerstone Capital Resources Inc
Cornerstone Capital Resources Inc
Cornerstone Capital Resources Inc
Cornerstone Capital Resources Inc

Investors

Corporate Update

Cornerstone Capital Resources Inc
Cornerstone Capital Resources Inc Cornerstone Capital Resources Inc
Address:
2742 St. Joseph Blvd., Unit 200
Orleans, ON
Canada, K1C 1G5
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Cornerstone Capital Resources Inc Cornerstone Capital Resources Inc Cornerstone Capital Resources Inc
 March 15, 2017
Shareholder Update

  Dear Cornerstone shareholder:

Some shareholders have inquired in the past few months as to why Cornerstone, in their opinion, has been somewhat 'silent' in communicating with shareholders. During that time your Management team has been executing a strategy, which is still ongoing, to acquire additional ground in Ecuador both through the competitive public bidding process and utilizing the preferential right of our generative exploration partner, state mining company ENAMI. In the interest of Cornerstone and its shareholders, it was the decision of Management, supported by the Board, to lay low until our efforts met with some success. Now that we have achieved some success, as announced in news releases on March 6th and January 5th (see links below), we are pleased to provide the following update.

http://www.cornerstoneresources.com/s/NewsReleases.asp?ReportID=781535&_Type=News&_Title=17-06-ENAMI-and-Cornerstone-awarded-new-concessions-near-Cascabel

http://www.cornerstoneresources.com/s/NewsReleases.asp?ReportID=774898&_Type=News&_Title=17-02-Cornerstone-awarded-Bramaderos-concession

Paradigm Capital, in an equity research note to clients on February 13, 2017, suggested that Cornerstone is a "no-brainer" takeover target just for its interest in the Cascabel joint venture in northern Ecuador. Others have suggested this to me as well in the numerous conversations I have had with other analysts, newsletter writers, media and shareholder calls. Management agrees that potential exists. However, we believe Cornerstone has much more value than just the implied value of its interest in Cascabel - the new porphyry concessions around Cascabel announced on March 6th, plus the four drill ready projects Vetas Grandes, Bella Maria, Caņa Brava and Bramaderos are only a few examples, and we are currently evaluating the best approach to advancing these projects to unlock the unrealized value of these other assets.

Management has a duty to ensure that shareholders obtain the highest value upon the disposition of any asset or during an outright takeover. In the event that Cornerstone becomes the subject of a takeover bid, we expect that it would be friendly. Should such a takeover bid occur, especially if it is hostile, management will need the support of shareholders to ensure that you receive the maximum benefit.

We wish here to briefly expand on the list of projects that were mentioned earlier so that you can have better insight into their present situation and the potential future positive impact on Cornerstone.

The New Porphyry Projects around Cascabel
We were advised by ENAMI on March 14th that the last part of the Espejo area (i.e., the concession called "Espejo 3", marked in red dotted line in the Figure to our March 6th news release http://www.cornerstoneresources.com/i/pdf/NR17-06Figures.pdf) has been received by ENAMI. "Cristal" (also marked in red dotted line in the same Figure) remains pending, ENAMI having applied for that area more recently. Cornerstone has signed confidentiality agreements with several major mining companies regarding these new areas, two of who have already completed site visits.

Vetas Grandes (Central Ecuador)

http://www.cornerstoneresources.com/s/Ecuador.asp?ReportID=462204

We have had discussions with a mid-tier gold mining company and are working towards advancing those discussions into an option agreement in order to advance exploration on the project.

Bramaderos (Southern Ecuador)

http://www.cornerstoneresources.com/s/Ecuador.asp?ReportID=774897

We are engaged in preliminary discussions with a third party that is a potential partner for this new exciting new project.

Bella Maria (South western Ecuador)

http://www.cornerstoneresources.com/s/Ecuador.asp?ReportID=136196

Confidentiality agreements have been signed with several potential partners, some site visits have been carried out and others are pending.

Caņa Brava (Southern Ecuador)

http://www.cornerstoneresources.com/s/Ecuador.asp?ReportID=136200

Confidentiality agreements have been signed with several potential partners, some site visits have been carried out and others are pending.

Miocene (Chile)

http://www.cornerstoneresources.com/s/Chile.asp?ReportID=450381

We also want to comment on the 100% owned Miocene project, held by Cornerstone's Chilean subsidiary Minera Cornerstone Chile Limitada (MCCL), which is located in the Atacama and Antofagasta Regions of northern Chile, and is targeting epithermal gold-silver and porphyry gold-copper deposits along the interpreted northern extension of the Maricunga magmatic belt which hosts several world-class gold deposits. The Miocene claims were selected using a proprietary data base licensed exclusively to Cornerstone, and we feel Miocene offers tremendous potential for discovery. Chile consistently ranks among the world's top mining jurisdictions. In recent months there has been a renewed interest from mining companies to assess the Miocene project potential and possible participation in its exploration.

Cornerstone is committed to the project generator model to increase shareholder value. Upon identifying or acquiring a mineral target, Cornerstone typically spends 12 to 18 months doing systematic exploration work to identify drill targets, and then looks to form a strategic partnership with a joint-venture partner. In exceptional cases, however, a partner will be brought in soon after the mineral title is acquired. When forming a strategic partnership, Cornerstone's joint-venture partner will earn an incremental stake in a specific project through share and cash payments to Cornerstone and by conducting further exploration on the property. The Cascabel project is an excellent example of this model in action. Except for the modest initial cost of acquiring the Cascabel property in 2011 Cornerstone has expended very little on Cascabel but will deliver exceptional value to its shareholders at minimal cost and risk. Cornerstone will continue to follow the JV generator model on its other present and future projects.

In conclusion, please be assured that your Board and Management teams are working very diligently to position Cornerstone in such a way that its long-term viability is ensured and that incremental success is reflected in the share price. We've hosted several visits by equity research analysts and mining companies and will continue to do so as the world's mining and investment communities take a greater interest in Ecuador. We are convinced that Ecuador, because of its under-explored yet potentially unparalleled geological endowment and newly competitive mining taxation and regulatory regime, is now one of the most attractive mining jurisdictions worldwide. Since acquiring our first project there in 2005 we've weathered a Tsunami of sorts through the Mining Moratorium but our confidence in Ecuador's mineral potential and in the eventual turnaround in the mining regime is now being rewarded. Many major mining companies including Hancock Prospecting, Fortescue Minerals, BHP Billiton and Newcrest Mining have shown interest in projects in Ecuador recently.

We thank you for your continued support and interest.

Sincerely,
Brooke Macdonald

Hugh (Brooke) Macdonald
President & CEO

Cautionary Notice:
This letter may contain 'Forward-Looking Statements' that involve risks and uncertainties, such as statements of Cornerstone's plans, objectives, strategies, intentions and expectations. The words "potential," "anticipate," "forecast," "believe," "estimate," "expect," "may," "project," "plan," and similar expressions are intended to be among the statements that identify 'Forward-Looking Statements.' Although Cornerstone believes that its expectations reflected in these 'Forward-Looking Statements' are reasonable, such statements may involve unknown risks, uncertainties and other factors disclosed in our regulatory filings, viewed on the SEDAR website at www.sedar.com. For us, uncertainties arise from the behaviour of financial and metals markets, predicting natural geological phenomena and from numerous other matters of national, regional, and global scale, including those of an environmental, climatic, natural, political, economic, business, competitive, or regulatory nature. These uncertainties may cause our actual future results to be materially different than those expressed in our Forward-Looking Statements. Although Cornerstone believes the facts and information contained in this letter to be as correct and current as possible, Cornerstone does not warrant or make any representation as to the accuracy, validity or completeness of any facts or information contained herein and these statements should not be relied upon as representing its views subsequent to the date of this letter. 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 except where outcomes have varied materially from the original statements.

 
 

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