Mount Pearl, NL, Canada: Cornerstone Capital Resources Inc. ("Cornerstone") (TSXV-CGP) (F-GWN) (B-GWN) (OTC-CTNXF) today announced it has re-negotiated the terms of the option agreement with SolGold Plc on Cornerstone's 5,000 hectare Cascabel gold-copper-silver property in northern Ecuador announced on July 24, 2012.|
- SolGold will acquire an initial 20% shareholding in Cornerstone's wholly-owned Ecuadoran subsidiary Exploraciones Novomining S.A. ("ENSA") which owns 100% of the Cascabel project and the La Encrucijada porphyry and epithermal gold project, with a right to acquire up to 85% of ENSA by making private placements totaling C$1.2 million in Cornerstone (subject to TSXV approval), completing a phase 1, 2,500 metre drill program at Cascabel planned to commence May 2013, and issuing to Cornerstone C$500,000 of SolGold shares.
Under the new agreement:
1. SolGold will immediately subscribe for Cornerstone shares at the higher of $0.05 cents a share or a 7-day volume weighted average price (VWAP) for a subscription amount of C$200,000 and be issued a 20% interest in ENSA.
Commenting on the renegotiation, Cornerstone's President & CEO Brooke Macdonald said,
2. By 24 March 2013 SolGold may acquire a further 10% interest giving it a direct 30% interest in ENSA by subscribing a further C$250,000 of Cornerstone shares at the higher of $0.05 cents a share or 7-day VWAP. Part of these funds will be used to renew tenure at ENSA's secondary project, La Encrucijada, situated in southern central Ecuador.
3. SolGold may then elect to take a placement in Cornerstone of C$500,000 at the higher of $0.05 cents or 7-day VWAP on the issuance of the environmental licences to allow drilling to occur at Cascabel. Should SolGold elect to undertake this placement, it will receive a further 20% interest in ENSA taking SolGold's position to 50% of ENSA.
4. SolGold may increase its interest in ENSA to 85% by:
- Completing a 2,500 metre drilling program capped at C$2.5 million including expenditure to date by SolGold;
- SolGold subscribing C$250,000 of Cornerstone shares at the higher of $0.05 cents or 7-day VWAP; and
- SolGold issuing to Cornerstone C$500,000 of SolGold shares priced at 7-day VWAP.
5. SolGold shall carry Cornerstone at a 15% interest in the project to completion of a bankable feasibility study (BFS) on SolGold's schedule and budget. If Cornerstone fails to fund its proportionate share of ongoing expenditures following completion of the BFS and its interest is diluted below 10% such interest will be converted to a 0.5% Net Smelter Return (NSR). SolGold may buy out this and other royalties on Cascabel for payments of US$7.5 million ($3.5 million to buy out Cornerstone's 0.5% NSR and $4 million to buy out an underlying 2% NSR to a 3rd party). SolGold may recover Cornerstone's carried costs to bankable feasibility study from 90% of Cornerstone's share of Cascabel project cash flows.
"This re-negotiated deal for Cascabel provides some needed private placement funding to Cornerstone, while retaining Cornerstone's right to a significant minority interest in the project. Recently announced exploration results provide considerable encouragement that the 25 sq km intrusive system at Cascabel will yield at least one major porphyry discovery. We are delighted to have SolGold as a partner and believe they are committed to advancing Cascabel as quickly as possible."
Yvan Crepeau, M.Ba., P.Geo., General Manager of Cornerstone Ecuador S.A. and a qualified person in accordance with National Instrument 43-101, is responsible for supervising the exploration program at the Cascabel project and has reviewed and approved the 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
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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,
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