CORNERSTONE CAPITAL RESOURCES INC : http://www.cornerstoneresources.com/ : QwikReport

News

#April 10, 2019
19-09 - Cascabel Exploration Update -- Alpala 2019 Drilling Campaign and Update on Investment in ENSA

  Ottawa, ON, Canada: Cornerstone Capital Resources Inc. ("Cornerstone" or "the Company") (TSXV:CGP) (Frankfurt:GWN) (Berlin:GWN) (OTC:CTNXF) is pleased to announce the following update on the exploration program at its Cascabel copper-gold porphyry joint venture exploration project in northern Ecuador, in which the Company has a 15% interest financed through to completion of a feasibility study and repayable out of Cornerstone's share of project cash flow, plus 9.22% of the shares of joint venture partner and project operator SolGold Plc, for a total direct and indirect interest in Cascabel of approximately 23%.

Figures referred to in this news release can be seen in PDF format by accessing the version of this release on the Company's website (www.cornerstoneresources.com) or by clicking on the link below:

http://www.cornerstoneresources.com/i/pdf/NR19-09Figures.pdf.

HIGHLIGHTS:

  • 2019 drilling campaign along the greater Alpala trend providing further growth to the Alpala deposit at Alpala NW, Trivinio, Alpala Western Limb and Alpala South.
    • 189,984m of diamond drilling comprising 168 drill holes completed to-date on the Alpala Deposit, representing a further 56,408m of drilling completed since release of the updated mineral resource estimate announced November 20, 2018 ("MRE#2", see below for link to Technical Report filed January 3, 2019), with 6,654m of recent drilling with assay results pending.
  • Updates to in-house models, estimated from an additional 49,794m of diamond drilling since MRE#2, support expectations for resource growth across both indicated and inferred categories.
  • Discoveries of previously unknown high grade (>1.5% CuEq1) and medium grade (>0.7% CuEq) mineralization intersected within existing low grade Inferred Resource areas at Alpala highlight ongoing upgrades to existing resource base at Trivinio (Hole 93), Alpala North (Hole 75), Alpala Northwest (Hole 86), and Alpala South (Hole 89).
  • Drilling highlights:
    • Potential at Trivinio bolstered by Hole 93 intersection: 862m @ 0.43% CuEq (0.32% Cu, 0.16g/t Au, from 1314m depth, 345m true width2), 520m (true width 208m) of which lies outside the existing Inferred Resource area.
    • Alpala North mineralization remains open to the north, as shown by Hole 75 intersection: 1918m@ 0.53% CuEq (0.41% Cu, 0.19g/t Au, from 320m depth, 767m true width), 288m (true width 115m) of which lies outside the existing Inferred Resource area.
    • Discovery of previously unknown QD10 source intrusion at Alpala Northwest, intersected in Hole 86: 318m @ 0.67% CuEq (0.54% Cu, 0.22g/t Au , from 1052m depth, 127m true width, incl. 100m @ 1.34% CuEq), highlights potential for further significant resource extension as the 2019 drilling campaign continues.
    • Alpala South mineralization remains open to the south and towards surface, as revealed by Hole 89 intersection: 420m @ 0.61% CuEq (0.43% Cu, 0.30g/t Au , from 334m depth, 168m true width).
  • Geotechnical, hydrogeological and sterilization drill testing commences at Cascabel, ahead of expected release of Preliminary Economic Assessment (PEA) report.

Cornerstone CEO, Brooke Macdonald, said: "Cornerstone is encouraged by these resource upgrade drilling results, expected to further expand and enrich the existing resource base at the Alpala deposit, as well as resource extension drill hole results outside the previous resource area which promise further growth for the 2019 drilling campaign ahead."

FURTHER INFORMATION:
Cascabel is located in northwestern Ecuador in an under-explored northern section of the Andean Copper Belt (Figure 1).

Mineral Resource Extension & Upgrade -- 2019 Drilling Campaign
The 2019 drilling campaign at Cascabel is presently employing 10 drilling rigs (Figures 2 and 3). The drilling fleet currently has three rigs focused on resource upgrade drilling (Rigs 2, 5, and 7), five rigs focused on resource extension drilling (Rigs 3, 4, 6, 8, and 9), and two rigs focused on geotechnical, hydrogeological and sterilizisation drilling (Rigs 1 and 13).

A further 2 man-portable rigs (Rigs 14 and 15) are under final construction & upgrade phase at the HP Drilling workshops, and are planned to join the Cascabel drilling fleet in May 2019 to expedite geotechnical and hydrogeological drill testing and ongoing monitoring programs.

Ongoing drilling, along the greater Alpala trend is providing further growth to the Alpala Mineral Resource Estimate at Alpala NW, Trivinio, Alpala Western Limb and Alpala South.

Recent drilling supports expectations for future resource growth across both indicated and inferred categories (Figures 4 and 5).

The current in-house database is built from 183,330m of drill core samples, the same number of rock-saw trench samples. This represents an additional 49,754m of diamond drilling since release of MRE#2.

To date a current total of 189,984m of diamond drilling comprising 168 drill holes has been completed on the Alpala Deposit, including 109 drill holes (Holes 1-109), 36 daughter holes, 8 re-drills, and 17 over-runs. This represent a further 56,408m of drilling completed since release of MRE#2. 6,654m of recent drilling has assay results pending.

Discoveries of previously unknown high grade (>1.5%CuEq) and medium grade (>0.7% CuEq) mineralization intersected within existing low grade Inferred Resource areas at Alpala highlight potential for upgrades to the existing resource base at Trivinio (Hole 93), Alpala North (Hole 75), Alpala Northwest (Hole 86), and Alpala South (Hole 89). See Table 1 below.

Hole ID Depth From (m) Depth To (m) Interval (m) True Width (m) Cu (%) Au (g/t) CuEq (%) Cut-off (CuEq%)
CSD-18-075 320 2238 1918 767 0.41 0.19 0.53 0.10
CSD-18-075 778 880 102 41 0.69 0.45 0.97 0.80
CSD-18-086 1052 1370 318 127 0.54 0.22 0.67 0.20
CSD-18-086 1200 1300 100 40 1.04 0.48 1.34 0.60
CSD-18-089 334 754 420 168 0.43 0.30 0.61 0.10
CSD-18-089 628 710 82 33 0.61 0.71 1.06 0.60
CSD-18-093 1314 2176 862 345 0.32 0.16 0.43 0.10
CSD-18-093 1560 1644 84 34 0.76 0.57 1.12 0.60
Table 1. Drill hole intercepts

Geotechnical, hydrogeological and sterilizisation drill testing commences at Cascabel, ahead of expected release of Preliminary Economic Assessment report.

January 2019 Mineral Resource Estimate
In January 2019, an updated Alpala Deposit Mineral Resource Estimate ("MRE#2") and an independent National Instrument 43-101 technical report on the Alpala Deposit was completed. MRE#2 was estimated from 133,576m of diamond drilling, and 2743m of rock-saw samples from 262 surface rock exposure trenches.

MRE#2, using a 0.2% CuEq cut-off grade, currently comprises:

  • 2.05 Bt @ 0.60% CuEq in the Indicated category (8.4 Mt Cu and 19.4 Moz Au), and
  • 900 Mt @ 0.35% CuEq in the Inferred category (2.5 Mt Cu and 3.8 Moz Au).

Within the deposit a medium-grade core exists, using a 0.45% CuEq cut-off grade, comprising:
  • 810 Mt @ 1.03% CuEq in the Indicated category (5.4 Mt Cu,15 Moz Au), and
  • 150 Mt @ 0.65% CuEq in the Inferred category (0.7 Mt Cu and 1.2 Moz Au).

Using a 0.7% CuEq cut-off grade, MRE#2 comprises:
  • 490 Mt @ 1.37% CuEq in the Indicated category (4.1 Mt Cu and 13.0 Moz Au), and
  • 50 Mt @ 0.93% CuEq in the Inferred category (0.4 Mt Cu and 0.7 Moz gold Au).

A high-grade core forms the lower centre of the deposit, using a 0.9% CuEq cut-off grade, comprising
  • 400 Mt @ 1.49% CuEq in the Indicated category (3.6 Mt Cu and 11.9 Moz Au), and
  • 20 Mt @ 1.05% CuEq in the Inferred category (0.2 Mt Cu and 0.4 Moz gold Au).

The full National Instrument 43-101 technical report entitled "A Technical Report on an Updated Mineral Resource Estimate for the Alpala Deposit, Cascabel Project, Northern Ecuador" can be found at the following link: http://www.cornerstoneresources.com/i/pdf/AlpalaMRE_1218.pdf

About the Cascabel Joint Venture with SolGold:
Exploraciones Novomining S.A. ("ENSA"), an Ecuadorean company owned by SolGold Plc and Cornerstone, holds 100% of the Cascabel concession. Subject to the satisfaction of certain conditions, including SolGold's fully funding the project through to completion of a feasibility study, SolGold Plc will own 85% of the equity of ENSA and Cornerstone will own the remaining 15% of ENSA. SolGold is funding 100% of the exploration at Cascabel and is the operator of the project. SolGold shall receive 90% of Cornerstone's distribution of earnings or dividends from ENSA to which Cornerstone would otherwise be entitled until such time as the amounts so received equal the aggregate amount of expenditures incurred by SolGold that would have otherwise been payable by Cornerstone, plus interest thereon from the dates such expenditures were incurred at a rate per annum equal to LIBOR plus 2 per cent until such time as SolGold is fully reimbursed.

Logging, sampling, assaying and reporting
Holes referred to in this release were or are being drilled using HTW, NTW, NQ and BQ core sizes (respectively 7.1, 5.6, 4.8 and 3.7 cm diameter). Geotechnical measurements such as core recovery, fracturing, rock quality designations (RQD's), specific gravity and photographic logging are performed systematically prior to assaying. The core is logged, magnetic susceptibility measured and key alteration minerals identified by experienced loggers and sometimes using an on-site portable spectrometer. Core is then sawed in half at the ENSA core logging facility, and half of the core is delivered by ENSA employees for preparation at ALS Minerals Laboratories (ALS) sample preparation facility in Quito. Core samples are prepared crushing to 70% passing 2 mm (10 mesh), splitting 250 g and pulverizing to 85% passing 75 microns (200 mesh) (ALS code CRU-31, SPL21 and PUL-32). Prepared samples are then shipped to ALS in Lima, Peru where samples are assayed for a multi-element suite (ALS code ME-MSP61, 1g split, 4-acid digestion, ICP-MS finish). Over limit results for Ag (> 100 g/t) and Cu, (> 1%) are systematically re-assayed (ALS code Ag-AA62, 4-acid digestion, AAS finish). Gold is assayed using a 30 g split, Fire Assay (FA) and AA finish (ALS code Au-AA23).

Quality assurance / Quality control (QA/QC)
The ALS Laboratory is a qualified assayer that performs and makes available internal assaying controls. Duplicates, certified blanks and standards are systematically used (1 control sample every 15-20 samples). Rejects, a 100 g pulp for each core sample and the remaining half-core are stored for future use and controls.

Qualified Person:
Yvan Crepeau, MBA, P.Geo., Cornerstone's Vice President, Exploration and a qualified person in accordance with National Instrument 43-101, is responsible for supervising the exploration program at the Cascabel project for Cornerstone and has reviewed and approved the information contained in this news release.

Update on Investment in ENSA
In its financial statements for the three and nine months ended September 30, 2018, the Company reported the estimated fair market value for accounting purposes of its investment in ENSA at $23,700,000 and noted that, as a result of the November 20, 2018 disclosure of the updated mineral resource estimate for the Alpala deposit, it intended to engage a valuation firm to assist in the reevaluation of that investment after receipt of the National Instrument 43-101 technical report on the Alpala Deposit, which was subsequently filed on Sedar on January 3, 2019. The Company engaged the same valuation firm, received the updated valuation report and management selected what it believes is a conservative valuation of ENSA within the range provided in the report. The estimated fair value of the Company's long-term investment in ENSA for financial statement reporting purposes as at December 31, 2018 is $103,600,000.

About Cornerstone:
Cornerstone Capital Resources Inc. is a mineral exploration company with a diversified portfolio of projects in Ecuador and Chile, including in the Cascabel gold-enriched copper porphyry joint venture in north west Ecuador.

Further information is available on Cornerstone's website: www.cornerstoneresources.com and on Twitter. For investor, corporate or media inquiries, please contact:

Investor Relations:
Mario Drolet (Montreal); Email: Mario@mi3.ca;
Tel. (514) 346-3813

Corporate Matters: David Loveys, CFO; Email: loveys@cornerstoneresources.ca;
Tel. (343) 689-0714

Due to anti-spam laws, many shareholders and others who were previously signed up to receive email updates and who are no longer receiving them may need to re-subscribe at http://www.cornerstoneresources.com/s/InformationRequest.asp

Cautionary Notice:
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 after 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,
Brooke Macdonald
President and CEO

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.

1 All references in this news release to copper equivalent (CuEq) grades are composed of copper and gold values, calculated using a gold conversion factor of 0.63, determined using an updated copper price of USD3.00/pound and an updated gold price of USD1300/ounce.

2 True widths of down hole intersections are estimated by project operator SolGold to be approximately 25-50%.

 
#April 08, 2019
19-08 - Cornerstone announces issuance of Bramaderos environmental license - drilling to commence shortly

  Ottawa, ON, Canada: Cornerstone Capital Resources Inc. ("Cornerstone" or "the Company") (TSXV-CGP) (F-GWN) (B-GWN) (OTC-CTNXF) announces the Environmental License for diamond drilling at its Bramaderos gold and copper project in Ecuador has been issued by the Ecuadorian Ministry of Environment.

Figures and photos related to this news release can be seen in PDF format by accessing the version of this release on the Company's website (www.cornerstoneresources.com) or by clicking on the link below:

http://www.cornerstoneresources.com/i/pdf/NR19-08Figures.pdf.

Cornerstone, and its joint venture funding partner ASX listed Sunstone Metals Inc., have mobilized a drill rig to the Bramaderos site (see Photo 1) and drilling is expected to commence shortly.

First assay results are expected in late May to early June based on an anticipated time frame of 2-3 weeks to complete the first drill hole to a depth of ~500m, followed by 1-2 weeks to complete logging and sampling of the drill hole, and anticipating a turn-around time of approximately 4 weeks for sample preparation and assay results.

Drilling will commence at the Limon target where surface trenching assayed 97.6m at 0.71g/t gold and 0.23% copper over a poorly outcropping porphyry system (see news release 18-18 dated May 29, 2018).

The initial drill program is anticipated to be approximately 5,000m and will also include holes at Bramaderos Main to follow up on historical drilling that intersected 248m at 0.56g/t gold and 0.14% copper and recent surface trenching that delivered 615m at 0.52g/t gold and 0.11% copper (see news release 18-17 dated May 9, 2018), and at West Zone where surface trenching has delivered 15.6m at 6.1g/t gold (see news release 17-40 dated November 8, 2017) (see Figure 1).

About Bramaderos
The Bramaderos concession is owned by Cornerstone subsidiary La Plata Minerales S.A. ("PLAMIN"), which has signed a binding letter of intent with Sunstone Metals Ltd. (formerly Avalon Minerals Ltd.) (ASX: STM), whereby Sunstone has the right to earn a 51% interest in the project by spending US$3.4 million over 3 years to complete a phase 1 drill program. If this first option is earned, Sunstone can go to 70% by funding a bankable feasibility study, and can go to 80% by financing 100% of the cost of construction of a mine and mill (see news release 17-08 dated April 10, 2017).

Qualified Person:
Yvan Crepeau, MBA, P.Geo., Cornerstone's Vice President, Exploration and a qualified person in accordance with National Instrument 43-101, is responsible for supervising the exploration program at the Bramaderos project for Cornerstone and has reviewed and approved the information contained in this news release.

Sampling and assaying
Rock samples are collected by PLAMIN's personnel, placed in plastic bags, labeled and sealed, and stored in a secure place until delivery by PLAMIN employees to the LAC y Asociados ISO 9001-2008 certified sample preparation facility in Cuenca, Ecuador.

Rock samples are prepared crushing to 70% passing 2 mm (10 mesh), splitting 250 g and pulverizing to 85% passing 75 microns (200 mesh) (MSA code PRP-910). Prepared samples are then shipped to MS Analytical Services (MSA), an ISO 9001-2008 laboratory in Langley, BC, Canada, where samples are assayed for a multi-element suite (MSA code IMS-136, 15.0 g split, Aqua Regia digestion, ICP-AES/MS finish) and gold by Fire Assay (MSA code FAS-111, 30 g fusion, AAS finish). Over limit results for Cu (>1%) are systematically re-assayed (MSA code ICF-6Cu, 0.2 g, 4-acid digestion, ICP-AES finish). Gold is assayed using a 30 g split, Fire Assay (FA) and AAS finish (MSA code FAS 111). Over limit results for Au (>10 g/t) are systematically re-assayed (MSA code FAS-415, FA, 30g., gravimetric finish).

Soil samples are dried at low temperature, screened to 80 mesh (MSA code PRP-757), a 15 grams portion is then assayed for a multi-elements suite (MSA code IMS-136, Aqua Regia digestion, ICP-AES/MS finish).

Quality assurance / Quality control (QA/QC)
The MSA Analytical Laboratory is a qualified assayer that performs and makes available internal assaying controls. Duplicates, certified blanks and standards are systematically used (1 control sample every 20-25 samples) as part of PLAMIN's QA/QC program. Rejects, a 100 g pulp for each rock sample, are stored for future use and controls.

About Cornerstone:
Cornerstone Capital Resources Inc. is a mineral exploration company with a diversified portfolio of projects in Ecuador and Chile, including in the Cascabel gold-enriched copper porphyry joint venture in north west Ecuador. Exploraciones Novomining S.A. ("ENSA"), an Ecuadorean company owned by SolGold Plc and Cornerstone, holds 100% of the Cascabel concession. Subject to the satisfaction of certain conditions, including SolGold's fully funding the project through to feasibility, SolGold Plc will own 85% of the equity of ENSA and Cornerstone will own the remaining 15% of ENSA. SolGold Plc is funding 100% of the exploration at Cascabel and is the operator of the project.

Further information is available on Cornerstone's website: www.cornerstoneresources.com and on Twitter. For investor, corporate or media inquiries, please contact:

Investor Relations:
Mario Drolet; Email: Mario@mi3.ca; Tel. (514) 904-1333

Due to anti-spam laws, many shareholders and others who were previously signed up to receive email updates and who are no longer receiving them may need to re-subscribe at http://www.cornerstoneresources.com/s/InformationRequest.asp

Cautionary Notice:
This news release may contain 'Forward-Looking Statements' that involve risks and uncertainties, such as statements of Cornerstone's beliefs, plans, objectives, strategies, intentions and expectations. The words "potential," "anticipate," "forecast," "believe," "estimate," "intend", "trends", "indicate", "expect," "may," "should," "could", "project," "plan," or the negative or other variations of these words 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 after 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,
Brooke Macdonald
President and CEO

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.

 
#March 14, 2019
19-07 - Cornerstone announces approval of Bramaderos EIA -- Drill Rig to be mobilized to site immediately

  Ottawa, ON, Canada: Cornerstone Capital Resources Inc. ("Cornerstone" or "the Company") (TSXV-CGP) (F-GWN) (B-GWN) (OTC-CTNXF) announces the Environmental Impact Assessment (EIA) required for the issuance of an Environmental Licence for diamond drilling at its Bramaderos gold and copper project in Ecuador has been approved by the Ecuadorian Ministry of Environment.

Figures related to this news release can be seen in PDF format by accessing the version of this release on the Company's website (www.cornerstoneresources.com) or by clicking on the link below:

http://www.cornerstoneresources.com/i/pdf/NR19-07Figures.pdf.

It is expected that the Environmental Licence will be issued in the next week once an environmental bond has been posted.

Cornerstone, and its joint venture funding partner ASX listed Sunstone Metals Inc., will now mobilize a drill rig to the Bramaderos site and drilling is expected to commence within the next 2-3 weeks. First assay results are expected in late May or early June.

Drilling will commence at the Limon target where surface trenching has delivered 97.6m at 0.71g/t gold and 0.23% copper over a poorly outcropping porphyry system (see news release 18-18 dated May 29, 2018).

The initial drill program is anticipated to be approximately 5,000m and will also include holes at Bramaderos Main to follow up on historical drilling that intersected 248m at 0.56g/t gold and 0.14% copper and recent surface trenching that delivered 615m at 0.52g/t gold and 0.11% copper (see news release 18-17 dated May 9, 2018), and at West Zone where surface trenching has delivered 15.6m at 6.1g/t gold (see news release 17-40 dated November 8, 2017).

About Bramaderos
The Bramaderos concession is owned by Cornerstone subsidiary La Plata Minerales S.A. ("PLAMIN"), which has signed a binding letter of intent with Sunstone Metals Ltd. (formerly Avalon Minerals Ltd.) (ASX: STM), whereby Sunstone has the right to earn a 51% interest in the project by spending US$3.4 million over 3 years to complete a phase 1 drill program. If this first option is earned, Sunstone can go to 70% by funding a bankable feasibility study, and can go to 80% by financing 100% of the cost of construction of a mine and mill (see news release 17-08 dated April 10, 2017).

Qualified Person:
Yvan Crepeau, MBA, P.Geo., Cornerstone's Vice President, Exploration and a qualified person in accordance with National Instrument 43-101, is responsible for supervising the exploration program at the Bramaderos project for Cornerstone and has reviewed and approved the information contained in this news release.

Sampling and assaying
Rock samples are collected by PLAMIN's personnel, placed in plastic bags, labeled and sealed, and stored in a secure place until delivery by PLAMIN employees to the LAC y Asociados ISO 9001-2008 certified sample preparation facility in Cuenca, Ecuador.

Rock samples are prepared crushing to 70% passing 2 mm (10 mesh), splitting 250 g and pulverizing to 85% passing 75 microns (200 mesh) (MSA code PRP-910). Prepared samples are then shipped to MS Analytical Services (MSA), an ISO 9001-2008 laboratory in Langley, BC, Canada, where samples are assayed for a multi-element suite (MSA code IMS-136, 15.0 g split, Aqua Regia digestion, ICP-AES/MS finish) and gold by Fire Assay (MSA code FAS-111, 30 g fusion, AAS finish). Over limit results for Cu (>1%) are systematically re-assayed (MSA code ICF-6Cu, 0.2 g, 4-acid digestion, ICP-AES finish). Gold is assayed using a 30 g split, Fire Assay (FA) and AAS finish (MSA code FAS 111). Over limit results for Au (>10 g/t) are systematically re-assayed (MSA code FAS-415, FA, 30g., gravimetric finish).

Soil samples are dried at low temperature, screened to 80 mesh (MSA code PRP-757), a 15 grams portion is then assayed for a multi-elements suite (MSA code IMS-136, Aqua Regia digestion, ICP-AES/MS finish).

Quality assurance / Quality control (QA/QC)
The MSA Analytical Laboratory is a qualified assayer that performs and makes available internal assaying controls. Duplicates, certified blanks and standards are systematically used (1 control sample every 20-25 samples) as part of PLAMIN's QA/QC program. Rejects, a 100 g pulp for each rock sample, are stored for future use and controls.

About Cornerstone:
Cornerstone Capital Resources Inc. is a mineral exploration company with a diversified portfolio of projects in Ecuador and Chile, including in the Cascabel gold-enriched copper porphyry joint venture in north west Ecuador. Exploraciones Novomining S.A. ("ENSA"), an Ecuadorean company owned by SolGold Plc and Cornerstone, holds 100% of the Cascabel concession. Subject to the satisfaction of certain conditions, including SolGold's fully funding the project through to feasibility, SolGold Plc will own 85% of the equity of ENSA and Cornerstone will own the remaining 15% of ENSA. SolGold Plc is funding 100% of the exploration at Cascabel and is the operator of the project.

Further information is available on Cornerstone's website: www.cornerstoneresources.com and on Twitter. For investor, corporate or media inquiries, please contact:

Investor Relations:
Mario Drolet; Email: Mario@mi3.ca; Tel. (514) 904-1333

Due to anti-spam laws, many shareholders and others who were previously signed up to receive email updates and who are no longer receiving them may need to re-subscribe at http://www.cornerstoneresources.com/s/InformationRequest.asp

Cautionary Notice:
This news release may contain 'Forward-Looking Statements' that involve risks and uncertainties, such as statements of Cornerstone's beliefs, plans, objectives, strategies, intentions and expectations. The words "potential," "anticipate," "forecast," "believe," "estimate," "intend", "trends", "indicate", "expect," "may," "should," "could", "project," "plan," or the negative or other variations of these words 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 after 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,
Brooke Macdonald
President and CEO

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.

 
#March 08, 2019
19-06 - Cornerstone Board Rejects Hostile Bid Proposal by SolGold

  Ottawa, ON, Canada: Cornerstone Capital Resources Inc. ("Cornerstone" or "the Company") (TSXV:CGP) (Frankfurt:GWN) (Berlin:GWN) (OTC:CTNXF) today announced that its Board of Directors, upon the unanimous recommendation of an independent committee of the Board and following a detailed review conducted in consultation with its financial and legal advisors, has unanimously determined to reject SolGold plc's ("SolGold") unsolicited proposal to acquire Cornerstone (the "Hostile Bid") on the basis that it is not in the best interests of Cornerstone's shareholders.

The Board has rejected the proposed Hostile Bid without having received the formal bid given SolGold's consistent track record of delays:

  • late to publish drill results and updates to the market on Cascabel with the last press released update on exploration in November 2018;
  • late on releasing the Cascabel maiden resource statement;
  • late on releasing the preliminary economic assessment for Cascabel which was originally expected in January 2019, then Q1 2019 and now the most recent SolGold presentation is suggesting Q2 2019; and
  • now nearly 40 days since announcing its intention to make a takeover bid for Cornerstone.

"The Board is unanimous that SolGold's proposal substantially undervalues Cornerstone, a fact that has clearly been recognized by our shareholders with holders of approximately 59% of the outstanding common shares having now advised Cornerstone that they will not support SolGold's proposed bid" said Greg Chamandy, Chairman of the Cornerstone Board.

The Cornerstone Board firmly believes that SolGold's proposed Hostile Bid has no chance of success and has determined to highlight the following for the benefit of Cornerstone's shareholders:

1. THE PROPOSED HOSTILE BID HAS BEEN REJECTED BY SHAREHOLDERS AND IS INCAPABLE OF MEETING THE STATUTORY MINIMUM TENDER CONDITION

Shareholders that collectively own or exercise control of approximately 59% of the outstanding common shares of the Company have advised Cornerstone that they will not support the terms announced by SolGold. Canadian takeover rules require the majority of Cornerstone's outstanding common shares (excluding those shares held by SolGold) be tendered to a formal offer before any shares can be taken up. Given that the statutory minimum tender condition cannot be waived by SolGold, the proposed Hostile Bid is incapable of being completed on the basis that it lacks sufficient shareholder support.

2. THE PROPOSED HOSTILE BID SIGNIFICANTLY UNDERVALUES CORNERSTONE

SolGold is offering 0.55 of a SolGold share for each Cornerstone common share tendered into the proposed Hostile Bid. At current market prices, this would be approximately C$0.35 per common share, or total consideration for all of Cornerstone's outstanding common shares of approximately C$226 million. The Board views this consideration as inadequate based on the substantial value of Cornerstone's assets.

The Hostile Bid Fails to Recognize the Strategic Value of the Company's Asset Base

Exploraciones Novomining S.A. ("ENSA"), an Ecuadorean company owned by SolGold and Cornerstone, holds 100% of the Cascabel concession. Subject to the satisfaction of certain conditions, including SolGold fully funding the project through to feasibility, SolGold will own 85% of the equity of ENSA and Cornerstone 15%. Cornerstone also owns approximately 9.2% of the outstanding shares of SolGold. In effect, Cornerstone has a combined direct and indirect 22.8% interest in the Cascabel concession in addition to Cornerstone's ENAMI joint venture and other assets.

SolGold is responsible for funding 100% of the exploration at Cascabel, including funding Cornerstone's 15% interest, until completion of a bankable feasibility study. Following completion of a bankable feasibility study, SolGold is entitled to receive 90% of Cornerstone's distribution of earnings or dividends from ENSA until such time as the amounts so received equal the aggregate amount of expenditures incurred by SolGold that would have otherwise been payable by Cornerstone, plus interest thereon from the dates such expenditures were incurred at a rate per annum equal to LIBOR plus 2%.

The benefit to Cornerstone's shareholders of the Company's strategic 15% carried interest in ENSA is apparent considering the significant dilution SolGold's shareholders have experienced and are likely to continue to experience as a result of SolGold's attempts to finance the substantial ongoing development costs associated with the Cascabel project. In less than 18 months Cornerstone's former 11.25% ownership interest in SolGold's shares has been diluted by over 18% to 9.2%.

The significant value of Cornerstone's carried interest is clearly demonstrated in the following example. Assuming that the total costs of the Cascabel project to completion of feasibility will be US$300 million, SolGold must fund US$45 million to cover Cornerstone's portion of the development costs in addition to the US$255 million required for SolGold's interest. In effect SolGold must fund US$100 million for every US$85 million it needs to finance for its 85% interest. If SolGold finances its development costs by issuing equity, the resultant incremental dilution borne solely by SolGold's shareholders is at least 18% (which doesn't account for commissions, fees, discounts and other costs associated with any such financing).

More generally, the value of Cornerstone's carried interest can be expressed by the following equation:

Value of Carried Interest to Cornerstone (% of Cascabel Interest)

Conservatively assuming that Cornerstone could otherwise finance its carried interest on a zero discount and zero cost basis, the value of Cornerstone's carried interest is equal to approximately an additional 5% interest in the Cascabel project. The strategic benefit and value to Cornerstone of its carried interest is even greater when considering the costs of development through to a bankable feasibility study on comparable projects are well in excess of US$300 million.

Furthermore, as noted above, Cornerstone's attributable costs prior to feasibility will be repaid in the future out of 90% of Cornerstone's share of earnings from ENSA. If a mine is built, Cornerstone repays its carried interest at an interest cost per annum equal to LIBOR plus 2%, which is well below the cost of capital for both Cornerstone and SolGold. In effect, SolGold is required to fund Cornerstone's 15% carried interest on terms much more favourable to Cornerstone than SolGold's cost to finance, which accretes additional value to Cornerstone's shareholders and further dilutes SolGold's shareholders.

The Proposed Hostile Bid is Well Below Precedent Transactions

The proposed Hostile Bid represents a significant discount to the multiples in precedent transactions involving other mineral exploration companies. Assuming SolGold had liquid shares acceptable to Cornerstone's shareholders, the proposed Hostile Bid implies a valuation for Cornerstone of approximately US$0.02 per copper equivalent resource pound whereas precedent transactions with assets of lower grade and smaller size represent an average implied valuation of approximately US$0.07 per copper equivalent resource pound. SolGold would need to approximately triple their implied bid for Cornerstone to match the average from precedent transactions.

The Hostile Bid is at a Significant Discount to the Implied Value for Cornerstone Paid by BHP and Newcrest for their Non-Controlling Interest in SolGold

On October 15, 2018, BHP Billiton Holdings Limited ("BHP") acquired 100,000,000 SolGold shares at a price of £0.45 per SolGold share, which implied a price of ~C$0.63 per Cornerstone common share.

Similarly, on December 14, 2018, Newcrest Mining Limited ("Newcrest") acquired 27,870,000 SolGold shares at a price of £0.40 per SolGold share, which implied a price of ~C$0.56 per Cornerstone common share.

SolGold would need to increase their implied price for Cornerstone's common shares by approximately 62% and 84% to match the implied price paid by Newcrest and BHP, respectively, for their non-controlling interests in SolGold.

The Proposed Exchange Ratio is Vastly Out of Proportion to Cornerstone's Combined Direct and Indirect Interest

As of January 30, 2019, the exchange ratio proposed by SolGold would result in Cornerstone's shareholders owning approximately 18.4% of SolGold on a fully diluted in-the-money basis (assuming cancellation of cross-held shares) compared to Cornerstone's combined direct and indirect 22.8% interest in the Cascabel concession (assuming zero additional value for Cornerstone's carried interest). This represents an approximate 20% reduction for Cornerstone's shareholders (assuming zero value is ascribed to Cornerstone's other assets). Including the value of Cornerstone's carried interest as described above, the discount for Cornerstone's shareholders increases to over approximately 33%. Assuming SolGold had liquid shares acceptable to Cornerstone's shareholders, SolGold would need to increase the exchange ratio to in excess of 0.89 SolGold shares per Cornerstone common share to avoid a reduction in value for Cornerstone's shareholders.

The Proposed Exchange Ratio is Below the Exchange Ratio at which SolGold Shareholders Swapped their SolGold Shares for a Non-Controlling Interest in Cornerstone

In 2017, Cornerstone acquired SolGold shares in consideration for the issuance of Cornerstone common shares at an effective exchange ratio of approximately 0.65 SolGold shares per Cornerstone common share as compared to the exchange ratio under the proposed Hostile Bid of 0.55. SolGold shareholders that participated in the share swaps received 18% fewer shares in Cornerstone for a non-controlling interest as compared to the proposed Hostile Bid for control of Cornerstone. In comparison, this suggests that no premium is being offered as part of the consideration under the proposed Hostile Bid and that the consideration under the proposed Hostile Bid is at a significant discount.

The Timing of the Proposed Hostile Bid is Highly Suspect

The Board believes that SolGold announced the proposed Hostile Bid to:

  • exploit its inside knowledge about the Cascabel project prior to the release of the preliminary economic assessment for Cascabel and before material information was appropriately disseminated to Cornerstone and the market;
  • pre-empt Cornerstone's ability to enter into a value enhancing transaction with third parties such as BHP given its unusual standstill that does not expire until October 2020; and
  • deny Cornerstone's shareholders the opportunity to realize the value of Cornerstone's carried interest in the Cascabel project.

3. SOLGOLD'S SHARES ARE HIGHLY ILLIQUID WITH A HISTORY OF SIGNIFICANT DILUTION AND NO CERTAINTY OF VALUE

SolGold Shares are Illiquid both in the U.K. and Canada

SolGold's average daily liquidity is extremely limited which would adversely impact the ability for Cornerstone's shareholders to monetize their SolGold shares without creating significant selling pressure. Based on the last 12 months' average daily trading of SolGold's shares in both the U.K. and Canada, it would take over five years of trading (over 1,300 trading days) to monetize the SolGold shares that would be issued as consideration under the proposed Hostile Bid, assuming responsible trading at 15% of the total volume on the LSE. On the TSX, where the SolGold shares are even more illiquid, it would take over 183 years or over 46,000 trading days to monetize the SolGold shares.

SolGold is expected to Dilute Existing Shareholders Further to Fund through to Feasibility

SolGold shareholders have experienced and are likely to continue to experience significant dilution as a result of SolGold's efforts to finance the substantial ongoing development costs associated with the Cascabel project. Ongoing drilling and work towards completing various stage-gate studies including the feasibility study are expected to require further dilutive financings by SolGold. On the other hand, to maintain Cornerstone's current direct interest in Cascabel, no financing is required until after the completion of the feasibility study. Cornerstone's shareholders will benefit if a robust feasibility study is delivered, following which Cornerstone will be required to fund its 15% interest in Cascabel and SolGold will be required to fund its 85% interest.

4. SOLGOLD IS MIRED BY SUSPECT CORPORATE GOVERNANCE AND SELF-DEALING PRACTICES

SolGold is Largely Controlled by a Group with Conflicting Loyalties and Divided Attention

Many of SolGold's directors and officers overlap with those of one of its major shareholders, DGR Global Limited ("DGR"). DGR was founded by Nicholas Mather, the Chief Executive Officer of SolGold, who also acts as Managing Director and Chief Executive Officer of DGR. As founder, Mather owns 19.43% of DGR and appears to commonly staff his associates to the management team and/or board of directors of DGR's "portfolio" companies, including SolGold.

Many of SolGold's directors and officers split their attention with three other publicly traded entities related to DGR: Aus Tin Mining, IronRidge Resources and Dark Horse Resources Limited. Brian Moller, the chairman of the board of SolGold, is perhaps the most egregious example of Mather staffing his associates at DGR's various portfolio companies, as he serves alongside Mather as a non-executive director of DGR itself as well as two of its publicly traded portfolio companies. Yet despite the common directorship and clear connection to Mather, Moller is touted as the "independent" chairman of SolGold.

This pattern of rewarding associates for their loyalty continues with SolGold's management team, as each of Mather, Karl Schlobohm (SolGold's Corporate Secretary) and Priy Jayasuriya (SolGold's Chief Financial Officer) all fill similar positions with each of DGR and its three publicly traded portfolio companies.

Mather and his team's influence on SolGold through DGR is important -- given their control and conflicting loyalties, Mather and his team could effectively exclude independent shareholders from major decisions, or favour actions to benefit his own or his associates' interests at the expense of SolGold's other shareholders.

SolGold's Largest Independent Shareholder has Limited Say and Non-Related SolGold Shareholders are Effectively Neutered

Newcrest is SolGold's largest independent shareholder with 15.2% of SolGold and is required to vote alongside the non-independent SolGold Board until October 2019 on certain matters. This provides Mather and his associates with significant influence over SolGold and in the words of Mather: "[Newcrest] can't make life difficult for [SolGold]"1.

Cornerstone estimates that the vast majority of SolGold's independent shareholders (excluding votes in favour of the resolutions attributable to Newcrest, SolGold board members and other insiders) voted against several egregious resolutions put forward by the SolGold board at SolGold's 2017 AGM, including:

  • Over 90% voted AGAINST increasing the directors annual remuneration by over 60%;
  • Over 74% voted AGAINST adoption of the share option plan which enables SolGold to issue 10% of the basic shares outstanding, which as of the date of this release would be in excess of 184,632,100 options to acquire shares; and
  • Over 60% voted AGAINST granting 26,250,000 share options to Samuel Holdings Pty Ltd, a company controlled by Mather.

All three of the above resolutions were passed given the self-interested voting by Mather and his associates, at the expense of all other SolGold shareholders.

The SolGold Board has a History of Diverting Benefits to Insiders at the Expense of all other Shareholders

SolGold's board of directors has authorized punitively dilutive financings for the benefit of SolGold insiders and associates of Mather at the expense of SolGold's other shareholders. For example, in March 2016, SolGold issued 87,449,092 shares at 2.3p to DGR and Tenstar Trading Limited for settlement of loans and convertible notes, notwithstanding that it is highly unusual for any exploration company to finance its operations with debt given the destructive effect it can have on equity value. A total of 142,311,592 shares were issued to DGR and Tenstar Trading Limited in 2016 for settlement of debts.

In addition, SolGold has established a loan plan in order to "assist" employees in exercising stock options. The plan essentially allows certain insiders of SolGold to pay for the exercise of options using an interest free loan from SolGold. On October 29, 2018, SolGold enabled certain insiders to exercise 19,950,000 options through an interest free loan. However, these employee benefits were not disclosed to SolGold's shareholders or the market until February 13, 2019 -- over 108 days after the loans were made. Further, independent shareholders of SolGold were not asked to approve these loans. As the same concessions were not available to SolGold's other securityholders, the interest free loans demonstrate the self-interested and rapacious conduct of Mather and Moller.

5. CORNERSTONE IS UNIQUELY POSITIONED, MAKING IT AN ATTRACTIVE OPTION FOR THOSE LOOKING TO ACQUIRE A DIRECT INTEREST IN CASCABEL

As enumerated above, Cornerstone's combined direct and indirect 22.8% interest in the Cascabel concession is unique, as it provides an attractive opportunity for a potential acquirer to secure a strategic position in the Cascabel project, widely considered to have the potential to be a world class mineral property due to its significant copper and gold resources. The Board believes that this, in part, may be why many of Cornerstone's shareholders have advised the Company that they do not support the proposed Hostile Bid.

The Board believes it is entirely reasonable for parties other than SolGold to consider a possible acquisition transaction of Cornerstone appealing, as interested third parties have an opportunity to secure a position in Cascabel that is superior to both BHP and Newcrest. Sophisticated mineral resource companies could leverage Cornerstone's strategic position to acquire an even larger interest in the Cascabel concession.

The strategic value of Cornerstone could enable an acquiror to do a creeping takeover of SolGold (either alone or with BHP and/or Newcrest) and severely limit the financing options for SolGold.

The Board does not consider an acquisition of Cornerstone to only be attractive to those looking to acquire a controlling interest in Cascabel. Maintaining both a direct and indirect stake in SolGold creates competitive pressure that would not exist if the Cascabel concession was consolidated under one umbrella. In the Board's view, Cornerstone's combined interest also significantly increases the buyer universe for Cornerstone, making it attractive to royalty companies and private equity participants in addition to mining companies.

On March 7, 2019 Cornerstone delivered the following letter to SolGold's board of directors proposing an obvious alternative in which both Cornerstone and SolGold conduct a formal auction for 100% of Cascabel with all potential acquirors, including BHP, released from any and all standstills and unnecessary encumbrances:

VIA EMAIL

March 7, 2019

Board of Directors
SolGold plc
Level 27, 111 Eagle Street
Brisbane, Australia 4000

Re: SolGold's Proposed Hostile Bid

Cornerstone, with the assistance of our financial and legal advisors, has undertaken a detailed review and analysis of SolGold's press releases dated January 31, 2019 and February 8, 2019 proposing to acquire all of the outstanding common shares of Cornerstone Capital Resources Inc. under a takeover bid. Consistent with its focus on the best interests of our company and its stakeholders and on maximizing shareholder value, our board has determined that the proposal set forth in your press releases is not in the best interests of Cornerstone shareholders. The proposed hostile bid has now been rejected by Cornerstone shareholders that collectively own approximately 59% of the outstanding Cornerstone shares and simply cannot succeed -- prior to your proposal even being formalized, it has already failed.

The proposed hostile bid is a significant waste of time and resources. We previously discussed a potential combination between SolGold and Cornerstone that you declined for non-commercial reasons. Specifically, Cornerstone wanted to ensure proper stewardship of the Cascabel project under a professional and competent CEO and Chairman and with an appropriately qualified board of directors at the helm to maximize value for all shareholders.

As Cornerstone is focused on maximizing shareholder value, one obvious alternative that we propose Cornerstone and SolGold pursue is to conduct a formal auction for 100% of Cascabel with all potential acquirers, including BHP, released from any and all standstills and unnecessary encumbrances. This would level the playing field plus all remaining assets in our respective companies would be spun-out to our respective shareholders. Otherwise SolGold can continue down the current path of a failed hostile bid and SolGold shareholders are likely to face a creeping takeover and never receive a proper control premium.

SolGold's directors and officers should also clearly and transparently disclose their direct and indirect ownership in Cornerstone. We suspect many SolGold shareholders would be very surprised to discover that certain directors and officers may have misaligned interests where they indirectly benefit from the proposed hostile bid through their shareholdings in Cornerstone. This would also answer the question we have received dozens of times on why would SolGold launch a hostile bid, well below fair value and simply an attempt to put Cornerstone in play, when they could never get the necessary shareholder support to be successful.

We expect SolGold's board of directors will see the rationale in conducting a formal auction for 100% of Cascabel, to the benefit of all shareholders, and look forward to your prompt response.

On behalf of our board of directors,

/s/ GREG CHAMANDY

Greg Chamandy
Chairman of the Board

Advisors
Cornerstone's financial advisor is Maxit Capital LP and its legal counsel is Davies Ward Phillips & Vineberg LLP.

About the Cascabel Joint Venture with SolGold:
Exploraciones Novomining S.A. ("ENSA"), an Ecuadorean company owned by SolGold Plc and Cornerstone, holds 100% of the Cascabel concession. Subject to the satisfaction of certain conditions, including SolGold's fully funding the project through to feasibility, SolGold Plc will own 85% of the equity of ENSA and Cornerstone will own the remaining 15% of ENSA. SolGold is funding 100% of the exploration at Cascabel and is the operator of the project. SolGold is entitled to receive 90% of Cornerstone's distribution of earnings or dividends from ENSA to which Cornerstone would otherwise be entitled until such time as the amounts so received equal the aggregate amount of expenditures incurred by SolGold that would have otherwise been payable by Cornerstone, plus interest thereon from the dates such expenditures were incurred at a rate per annum equal to LIBOR plus 2%.

About Cornerstone:

Cornerstone Capital Resources Inc. is a mineral exploration company with a diversified portfolio of projects in Ecuador and Chile, including in the Cascabel gold-enriched copper porphyry joint venture in north west Ecuador.

Further information is available on Cornerstone's website: www.cornerstoneresources.com and on Twitter. For investor, corporate or media inquiries, please contact:

Investor Relations:
Mario Drolet (Montreal); Email: Mario@mi3.ca;
Tel. (514) 346-3813

Corporate Matters: David Loveys, CFO; Email: loveys@cornerstoneresources.ca;
Tel. (343) 689-0714

Due to anti-spam laws, many shareholders and others who were previously signed up to receive email updates and who are no longer receiving them may need to re-subscribe at http://www.cornerstoneresources.com/s/InformationRequest.asp

Cautionary Notice:
This news release may contain 'Forward-Looking Statements' that involve risks and uncertainties, such as statements of Cornerstone's beliefs, plans, objectives, strategies, intentions and expectations. The words "potential," "anticipate," "forecast," "believe," "estimate," "intend," "trends," "indicate," "expect," "may," "likely," "should," "could," "potential," "project," "plan," or the negative or other variations of these words and similar expressions are intended to be among the statements that identify 'Forward-Looking Statements.' Examples of such 'Forward Looking Statements' in this news release include, but are not limited to, expectations regarding Cornerstone's and ENSA's prospects for growth, profitability and shareholder value creation; the availability of financing to fund Cornerstone's and SolGold's obligations; the development costs associated with the Cascabel project; the value and trading volumes of SolGold shares; the response to, likelihood of success and consequences of the Hostile Bid; the terms of the Hostile Bid; and the availability of strategic alternative transactions emerging. 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. These uncertainties may cause actual results and developments 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 after 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,
Brooke Macdonald
President and CEO

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.

1 Company Presentation by SolGold CEO Nick Mather at the Denver Gold Forum, 2018.

 
#February 19, 2019
19-05 - Cornerstone and Newcrest sign Option and Farm-in Heads of Agreement for the Caña Brava gold-copper Project in Ecuador

  Ottawa, ON, Canada: Cornerstone Capital Resources Inc. ("Cornerstone" or "the Company") (TSXV:CGP) (Frankfurt:GWN) (Berlin:GWN) (OTC:CTNXF) is pleased to announce that Cornerstone and its subsidiary Cañabrava Mining S.A. have signed an option and farm-in Heads of Agreement with Newcrest International Pty Limited ("Newcrest"), a subsidiary of Newcrest Mining Limited (ASX: NCM) for Cornerstone's Caña Brava and Tioloma properties in Ecuador (the "Project"), targeting epithermal gold-silver and porphyry gold-copper deposits in south central Ecuador.

HIGHLIGHTS (all $ are US$):

  • Subject to due diligence and negotiation of definitive documentation, Newcrest has the option to earn up to a 75% interest in the Project in stages, as follows:
    • Initial Option Period (runs from date of the definitive agreement until 18 months after receipt of Drilling Permit): making an up-front payment to Cornerstone of $100,000, and spending a minimum of $2 million (committed);
    • Stage 1 (4 years): paying $500,000 to Cornerstone and spending a further $8 million (with a minimum of $500,000 in each year to maintain the option) to earn a 51% interest in the Project;
    • Stage 2 (2 years): paying $650,000 to Cornerstone and completing a positive Preliminary Economic Assessment in accordance with National Instrument 43-101 on any target area in the Project, to increase its interest in the Project to 65% (Newcrest may extend Stage 2 an additional year by paying Cornerstone $250,000); and
    • Stage 3 (2 years): incurring expenditures of $100 million or completing a bankable feasibility study (BFS), whichever occurs first, to increase its interest in the Project to 75% (Newcrest may extend Stage 3 by up to an additional 2 years by paying $500,000 to Cornerstone for each 1 year extension).
  • If Newcrest earns a 75% interest, Cornerstone will have the option for 90 days to convert up to 10% (2/5th) of its 25% project equity into a net smelter returns (NSR) royalty at the rate of 5% equity per 1% NSR (with minimum conversion of 5% equity interest). Newcrest will have the right to buy down the royalty to 1.5% NSR at fair market value after delivery of the BFS.
  • Cornerstone's carried interest ends at the end of Stage 3 or sooner if Newcrest fails to complete any Stage after completing Stage 1 or if Newcrest elects not to proceed with Stage 2 or 3, following which Cornerstone will be required to contribute or suffer dilution of its participating interest according to a formula. If Newcrest completes Stage 1 and elects not to proceed to Stage 2, it will revert to a 49% non-controlling interest.
  • Cornerstone's carried interest is not repayable out of project cash flows or otherwise.
  • Newcrest will be the operator at its own cost during the Initial Option Period, for a 5% fee during Stages 1, 2 and 3, and at 3% fee thereafter.
President and CEO Brooke Macdonald said: "Newcrest is one of the largest gold mining companies in the world, operating mines in Australia, Papua New Guinea, and Indonesia, and we are pleased to have entered into this Heads of Agreement with them. Newcrest is also partnering with us on the Miocene project in Chile (see news release dated December 10, 2018). Cornerstone looks forward to seeing the Ecuadorian government providing regulatory certainty in the near term on the pathway for drilling."

Figures referred to in this news release can be seen in PDF format by accessing the version of this release on the Company's website (www.cornerstoneresources.com) or by clicking on the link below:

http://www.cornerstoneresources.com/i/pdf/NR19-05Figures.pdf.

About Caña Brava and Tioloma

Caña Brava - Gold/Copper - (Cornerstone has the right to earn 100%)
On February 26, 2015, the Company announced results from prospecting and geological mapping surveys carried out during 2014 on the Caña Brava property located in south-central Ecuador. The surveys identified (1) two significant porphyry Cu-Au targets well defined by coincident geological, geochemical and ground magnetic anomalies, (2) an intermediate sulphidation, higher grade, epithermal Au-Ag-Cu veins-breccia system mapped on the northern margin of the porphyry targets, and (3) a high sulphidation epithermal Au-Ag system recognized in the northeast corner of the property. Subsequently, a trenching program was completed (20 trenches, 599 metres, 301 channel samples), spectrometry (Terraspec) work carried out on soil samples (552), rock chips and channel samples (706) and a Phase 1 drill program has been prepared. An EIA was begun in July 2018, including an environmental base line study and consultation process. Base line study field work has been completed. The EIA will be submitted to the Ministry of Environment in the coming weeks. The Company has the right to earn a 100% interest in the Caña Brava project from the original owner in return for cash option payments of $40,000 each 6 months until the Company decides to exercise the option by making a final payment of $350,000. The $350,000 payment may be made early, and the option exercised at any time.

Tioloma -- Gold (100% Cornerstone)
Cornerstone acquired the Tioloma property in March 2017 for strategic purposes; the property wraps around three sides of the Caña Brava property, thereby enlarging, and effectively creating a protective area of interest around, the Caña Brava property and on strike with a well-defined regional mineralized trend.

About Cornerstone:
Cornerstone Capital Resources Inc. is a mineral exploration company with a diversified portfolio of projects in Ecuador and Chile, including the Cascabel gold-enriched copper porphyry joint venture in north west Ecuador, in which the Company has a 15% interest financed through to completion of a feasibility study and repayable out of Cornerstone's share of project earnings or dividends, plus 9.22% of the shares of joint venture partner and project operator SolGold Plc, for a total direct and indirect interest in Cascabel of approximately 23%.

Qualified Person:
Yvan Crepeau, MBA, P.Geo., Cornerstone's Vice President, Exploration and a qualified person in accordance with National Instrument 43-101, is responsible for supervising the exploration program at the Miocene project for Cornerstone and has reviewed and approved the information contained in this news release.

Further information is available on Cornerstone's website: www.cornerstoneresources.com and on Twitter. For investor, corporate or media inquiries, please contact:

Investor Relations:
Mario Drolet (Montreal); Email: Mario@mi3.ca;
Tel. (514) 346-3813

Corporate Matters: Dave Loveys, CFO; Email: loveys@cornerstoneresources.ca; Tel. (343) 689-0714

Due to anti-spam laws, many shareholders and others who were previously signed up to receive email updates and who are no longer receiving them may need to re-subscribe at http://www.cornerstoneresources.com/s/InformationRequest.asp

Cautionary Notice:
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 after 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,
Brooke Macdonald
President and CEO

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.

 

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