Mount Pearl, NL, Canada: Cornerstone Capital Resources Inc. ("Cornerstone") (TSXV-CGP) (F-GWN) (B-GWN) (OTC-CTNXF) and Solomon Gold Plc ("Solomon Gold") (AIM code: SOLG) announce that they have signed a binding letter of intent (LOI) outlining the terms of an option/joint venture arrangement for Cornerstone's 100% owned 5,000 hectare Cascabel gold-copper-silver property in northern Ecuador. Cascabel is one of two new high potential projects acquired by Cornerstone in Ecuador during 2011. |
Under the terms of the LOI, Solomon Gold has the ability to earn an initial 65% interest in the Cascabel property by:
(1) making an initial CAD$200,000 private placement in Cornerstone common shares based on the TSXV 30 day volume weighted average price ("VWAP") within 30 days of the execution of a definitive option agreement embodying the terms of the LOI;
(2) spending US$7.8 million over 4 years (including US$800,000 in the first year if drilling commences);
(3) within 60 days of the commencement of drilling on Cascabel, making a private placement in Cornerstone shares of CAD$150,000 and issuing Solomon Gold ordinary (i.e., common) shares to Cornerstone with a value equal to CAD$150,000 (both based on 30 day VWAP); and
(4) making a final private placement in shares of Cornerstone of CAD$500,000 priced at 30 day VWAP plus 20% on or before the 4th anniversary of the execution of the definitive option agreement.
All private placements shall be subject to Exchange approval, and proceeds of all private placements will be used for general corporate purposes.
Prior to Solomon Gold earning its initial 65% interest, Cornerstone will be the operator of the property on a cost plus 10% basis, and Solomon Gold will direct the technical program.
Following Solomon Gold's earning of its initial 65% interest, Cornerstone and Solomon Gold will enter into a joint venture and will fund their respective proportionate shares of ongoing expenditures and be subject to dilution according to a standard formula. After the entering into of the joint venture, Solomon Gold will have the option for one year to elect to earn an additional 20% interest in Cascabel by funding exploration towards the completion of a National Instrument 43-101 ("NI 43-101") bankable feasibility study ("BFS") within 18 months of making such election. The cost to Solomon Gold of the BFS is capped at US$20 million, after which the parties will contribute on a pro-rata basis. If Solomon Gold timeously exercises its right to earn the additional 20% interest, then any amounts spent by Cornerstone prior to that exercise and post Solomon Gold earning its initial 65% interest will be reimbursed to Cornerstone by Solomon Gold at 200% of expenditures incurred. Within 90 days of completion of the BFS, subject to Exchange approval, Solomon Gold shall issue to Cornerstone, at no cost to Cornerstone, ordinary (common) shares of Solomon Gold equal to 2% of the ordinary (common) shares of Solomon Gold then issued and outstanding. If Cornerstone fails to fund its proportionate share of ongoing expenditures and its interest is diluted below 10%, such interest will be converted to a 1% assignable Net Smelter Return ("NSR") on the property. Solomon Gold may purchase the NSR from Cornerstone on the following terms: Half of the NSR for US$1.5 million within 90 days following completion of the BFS; and the remaining half of the NSR for US$2.0 million within 90 days following a production decision.
"We are very pleased to have Solomon Gold as our partner on the Cascabel project, their technical team brings solid expertise gained in similar geological environments, and both companies have complementary skills that will benefit the project," said Brooke Macdonald, Cornerstone's President & CEO. "This partnership highlights Cornerstone's project generator business model -- finding and acquiring high potential properties, and then securing a cost and risk sharing partnership with a value-added partner such as Solomon, and in the case of Cascabel doing so within one year of property acquisition."
Malcolm Norris, CEO of Solomon, said, "This is an exciting time for Solomon Gold. The Cascabel property demonstrates all the features that we would like to see in an early stage gold-copper porphyry project, and to partner with a highly respected company such as Cornerstone enhances the probability of success. We will commence field work in May and move the project towards the drilling stage as soon as possible."
The Cascabel property is located approximately 120 km north of Quito and 20 km south of the Colombian border. Access is very good via a paved road from the provincial capital city of Ibarra to San Lorenzo city, on the Pacific coast, and secondary gravel roads to the central part of the 50 km2 property. An environmental license for the initial exploration phase was granted by the Ministry of Environment on July 12, 2011. Exploration work including geology, geochemistry, geophysics and hand-dug trenching and pitting, is allowed for a 4-year period under this environmental license. Cornerstone has complied with all regulations on this project and no further authorization is necessary to initiate field work.
Maps showing the geology and exploration results to date may be viewed at www.cornerstoneresources.com. Highlights of assay results for the 179 rock samples (grabs and representative rock chips) announced on September 13, 2011 show that precious and base metals are anomalous over most of the property area:
Free gold has been identified by panning in most of the streams of the area (49 pan concentrates out of 64 show the presence of gold) with higher amounts of gold grains (10-30) concentrated in the headwaters of the Rio Parambas, Rio Cachaco and Rio Cristal. Some of the streams have not yet been surveyed and/or followed up.
||Average of all values
|93 samples (52%)
||26 samples (14%)
||Average of all values
|43 samples (24%)
||10 samples (5%)
||Average of all values
|144 samples (80%)
||36 samples (20%)
Regional geology and mineralization
The Cascabel area is underlain by Upper Cretaceous sedimentary rocks which are overlain by Oligocene to Miocene andesitic flows and breccias. These units are intruded by Miocene age batholiths and stocks of granodiorite and diorite. Major regional tectonic structures in the area strike northeast. One such structure, the Apuela regional fault, transects the southeast part of the Cascabel property. Several mineral prospects which are hosted in the same geological belt, have been identified in the Cascabel district including the Chical (Au-Ag) and Rio Amarillo (Au-Ag-Cu) epithermal prospects located 12 km to the northwest and 12 km to the south of the property respectively. Cascabel is located upstream from an extensive alluvial gold district, Playa de Oro, located 50 km to the west. The Junin porphyry copper-molybdenum deposit (undeveloped NI 43-101 compliant inferred resource of 982 Mt @ 0.89% Cu, 0.04% Mo and 1.9 g/t Ag) lies 65 km to the southwest.
Yvan Crepeau, M.Ba., P.Geo, President of Cornerstone Ecuador SA and a qualified person in accordance with National Instrument 43-101, is responsible for the Cascabel exploration program and has reviewed and approved the technical information contained in this news release.
Cornerstone Capital Resources Inc. is a mineral exploration company based in Mount Pearl, Newfoundland and Labrador, Canada, with a diversified portfolio of projects in Canada, Ecuador and Chile, and a strong technical team that has proven its ability to identify, acquire and advance properties of merit. The company's business model is based on generating exploration projects whose subsequent development is funded primarily through joint venture partnerships. Commitments from JV partners constitute significant validation of the strength of Cornerstone's projects.
Further information is available on Cornerstone's website: www.cornerstoneresources.com or for investor, corporate or media inquiries, please contact:
North America toll-free: 1 (877) 277-8377
Martti Kangas - Direct Line: 1 (416) 367-5124
Paul Benwell / Pat Kairns - Direct Line: 1 (514) 904-1333
The link to a recent Corporate presentation is:
Investors can also access Cornerstone on Twitter
About Solomon Gold
Solomon Gold's exploration projects are located in Queensland, Australia and the Solomon Islands. In Australia, they comprise the Rannes, Mt Perry, Cracow West and Normanby Projects. In the Solomon Islands they comprise the Fauro Project (located on Fauro Island), and the Guadalcanal Joint Venture with Newmont Mining Corporation.
At the Rannes project Solomon Gold has announced Inferred resources of 25.5 million tonnes at 1.0 g/t gold equivalent (gold + silver) for 812,000 ounces of gold equivalent (486,935 ounces of gold and 13,014,294 ounces of silver; see announcement dated 30 November 2011 for details of the resource statement and gold equivalent ratios). The 2012 exploration program, including drilling to define new ore positions and grow the resource, has commenced.
Exploration continues at Mt. Perry, Normanby and Cracow West with drilling expected to commence in Q2 2012.
In the Solomon Islands, final data from the 2011 exploration program on the Fauro project has been reviewed and plans for 2012 are being prepared. The 2012 Guadalcanal Joint Venture exploration program with NVL Solomon Islands Limited (a subsidiary of NYSE‐listed Newmont Mining Corporation) has commenced with drilling on highly prospective gold‐copper porphyry targets expected to resume in April 2012.
Solomon Gold's strategy is to be an integrated gold and copper explorer, developer and miner.
Solomon Gold's Board includes accomplished professionals with strong track records in the areas of exploration, mine development in Australasia and Melanesia, investment, finance and law. Board and Management have significantly vested interests in the Company holding approximately 16.3% of its issued share capital.
Solomon Gold is based in Brisbane, Queensland, Australia. The Company listed on London's Alternative Investment Market in 2006, under the AIM Code 'SOLG' and currently has 313,381,934 shares on issue and 11,264,000 options exercisable at 50p on issue. Further details concerning the Company's key projects and personnel can be found at www.solomongold.com.
This news release 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 news release 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 news release. 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.
On Behalf of the Board,
President and CEO
Further information is available on the Cornerstone Web site at www.cornerstoneresources.com; via e-mail at email@example.com; or toll free at 1-877-277-8377.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.