26 Kyle Avenue
Mount Pearl, NL
Canada A1N 4R5
Cape Ray Property
Orogenic Gold (Silver) Deposits
Benton Resources Inc.
The Cape Ray property is located approximately 25 km northeast of the town of Port aux Basques in southwestern Newfoundland, and is accessible from Route 470 by a 20 km seasonal gravel road.
Underlying Agreements and Interests
On September 20, 2012, Cornerstone announced that it had signed a binding letter of intent ("LOI") with Benton Resources Inc. outlining the terms of an option/joint venture agreement for the Cape Ray property. Under the terms of the LOI, Benton has the ability to earn an initial 70% interest in the property by spending CAN$2 million on exploration, and making payments of CAN$125,000 and 155,000 shares over 4 years. Benton can earn an additional 5% (taking their interest to 75%) by incurring an additional CAN$1 million in exploration expenditures at its sole election but such election must be made within a period not exceeding 18 months from the date that Benton's interest vests at 70%. The property is subject to a 1.75% net smelter return (NSR) royalty payable to a third party, with Cornerstone having the right to repurchase a 1.0% NSR for $1 million, leaving the third party with a 0.75% NSR.
The Cape Ray property consists of a single 183-claim mineral licence which covers an area of 45.75 km2 and covers portions of a 22 km-long strike length of the Cape Ray Fault Zone ("CRFZ"), a major crustal-scale tectonic suture which has been described as one of the most significant gold-bearing structures in the Appalachians (Dubé and Lauzière, 1997).
The northeast-trending CRFZ marks a zone of highly strained rocks which separates the Late Cambrian to Early Ordovician Cape Ray Igneous Complex to the northwest (Dunnage Zone) from the Port aux Basques Gneiss to the southeast (Gander Zone). The Late Ordovician to Middle Devonian Windsor Point Group, a series of bimodal volcanics and volcaniclastics with associated sedimentary rocks, lies between these two units approximately along the trace of the CRFZ. Several pre- to late-tectonic granitoid bodies intrude all these units.
The most significant mineralization along the CRFZ is the Cape Ray gold deposit ("CRGD") which was discovered in the late 1970's by Rio Tinto Canadian Exploration Ltd. ("Riocanex"). The CRGD consists of three separate mineralized zones along a 1.75 km strike length, which from southwest to northeast are the 51, 41 and 4 zones. Gold and silver mineralization is associated with pyrite and base metal (Cu, Pb & Zn) rich fault-fill quartz breccia veins within shear zones developed in schists of the Windsor Point Group. At the Windowglass Hill deposit located 2.75 km southwest of the 51 Zone, the Early Silurian Windowglass Hill Granite hosts a series of extensional shallow-dipping quartz veins with associated gold and silver mineralization. Elsewhere along the CRFZ, significant gold mineralization occurs at the Big Pond and Isle aux Morts prospects located 5.5 km southwest and 9 km northeast respectively of the 51 Zone.
Cornerstone's Cape Ray property covers the 51 Zone and the Windowglass Hill prospect. A third party holds the mineral rights to the 4 and 41 zones of the CRGD, as well as the Big Pond and Isle aux Morts prospects.
On July 18, 2012, Cornerstone announced the results of an initial National Instrument 43-101 ("NI 43-101") compliant mineral resource estimate for the Cape Ray project. The mineral resource estimate was prepared by Mercator Geological Services Limited of Dartmouth, Nova Scotia and was completed on two separate mineralized zones: 1) the 51 Zone of the Cape Ray gold deposit ("51 Zone"); and 2) the Windowglass Hill deposit ("Windowglass Hill") (see Table 1). The estimate is based on three-dimensional block models developed for the 51 Zone and Windowglass Hill using Gemcom Surpac(r) 6.1.4 modeling software and the validated results of 26,480 metres of historical diamond drilling from 197 drill holes completed between 1977 and 1996, plus 2,520 metres of diamond drilling in 28 holes completed by Cornerstone between 2004 and 2006.
Mineral resources for the 51 Zone and Windowglass Hill are reported, respectively, on the basis of assumed underground (2.5 g/t gold cut-off) and open pit (0.5 g/t gold cut-off) development potential.
1. Mineral resources are estimated in conformance with the Canadian Institute of Mining, Metallurgy and Petroleum -- Standards on Mineral Resources and Reserves -- Definitions and Guidelines, as referenced in NI 43-101.
2. Reported mineral resources are considered to have reasonable prospects of economic extraction based on comparison with comparable deposits and a gold price of US$1,400 per ounce.
3. The block model for the 51 Zone is based on composited assay results for 451 drill core samples from 69 separate drill holes falling within deposit limits, and the Windowglass Hill block model is based on composited results for 529 drill core samples from 40 separate drill holes falling within deposit limits.
4. Block model grades were interpolated using inverse distance squared (ID2) methodology and 1.5 metre down hole calculated composites for gold and silver assay values.
5. Assay composites for the 51 Zone were capped at 30 g/t Au and 80 g/t Ag, and those for Windowglass Hill were capped at 12 g/t Au and 80 g/t Ag.
6. Block size for both the 51 Zone and Windowglass Hill is 2 m x 2 m x 2m with no sub-blocking.
7. Grade interpolations were fully constrained within grade shell wireframe solids reflecting weighted average cut-off grades of 1.0 g/t Au over 3 horizontal metres for the 51 Zone and 0.5 g/t Au over 3 vertical metres for Windowglass Hill.
8. A density value of 2.84 g/cm3 was used for the 51 Zone and a value of 2.77 g/cm3 was used for Windowglass Hill.
9. The rounding of tonnes as required by NI 43-101 reporting guidelines may result in apparent differences between tonnes, grade and contained ounces.
10. Mineral resources that are not mineral reserves do not have demonstrated economic viability. This estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, sociopolitical, marketing, or other relevant issues.
11. The quantities and grades of reported inferred mineral resources are uncertain in nature and further exploration may not result in their upgrading to Indicated or Measured status.
The sensitivity of the resource estimate to cut-off grades for gold is shown below in Table 2.
Table 2. Summary of Mineral Resources for the 51 Zone and Windowglass Hill Showing Sensitivity to Various Cut-Off Grades for Gold, Cape Ray Project (Mercator, July 16, 2012).
The mineral resource estimate has an effective date of July 16, 2012 and was prepared by Mr. Andrew Hilchey, P.Geo. of Mercator. Mr. Hilchey is an Independent Qualified Person ("Q.P.") as defined under NI 43-101 and has reviewed and approved the mineral resource information presented above. A NI 43-101 Technical Report in support of the resource estimate is currently being prepared by Mercator and will be filed on SEDAR by Cornerstone by September 01, 2012.
Overall supervision of the Cape Ray project is by Terry Brace, P.Geo., Cornerstone's Vice President Exploration. Julie Labonté, P.Geo., Project Geologist for Cornerstone is the Q.P. responsible for project management for the purposes of NI 43-101. Both Mr. Brace and Ms. Labonté have reviewed and approved the technical information presented herein.
12-19 - Cornerstone and Benton Resources sign letter of intent for the Cape Ray Gold-Silver Property, Newfoundland
12-17 - Cornerstone Announces Filing of NI 43-101 Technical Report and Mineral Resource Estimate for the Cape Ray Gold-Silver Project, Newfoundland
12-14 - Cornerstone Announces Initial NI 43-101 Compliant Mineral Resource Estimate for the Cape Ray Gold-Silver Project, Newfoundland
August 2012 - Cape Ray Technical and Resource Estimate
August 2012 - Cape Ray Consent Forms