Cornerstone Capital Resources Inc.

Cornerstone Capital Resources Inc.

May 12, 2005 11:02 ET

Cornerstone Provides Update on Ecuador Project

MOUNT PEARL, NEWFOUNDLAND--(CCNMatthews - May 12, 2005) - Cornerstone Capital Resources Inc. ("Cornerstone") (TSX VENTURE:CGP) is pleased to provide an update on initial reconnaissance exploration on its Ecuador projects.

Through it's wholly owned subsidiary, Cornerstone Ecuador S.A., Cornerstone recently announced it had entered into an agreement with Sierra Minera (Sierramin) S.A., a private Ecuadorian mining and mineral exploration company, to acquire 100% interest in three mineral properties in southern Ecuador totaling over 500 km2 in area (Cornerstone press release dated February 25, 2005). A reconnaissance mapping/prospecting and sampling program is currently underway on the Shyri, Rinconada and Monterrey concessions. The results reported herein were generated during an initial reconnaissance exploration program, focused on the Shyri property, which is located immediately south of and adjacent to IAMgold's Quimsacocha project. IAMgold recently announced drill intersections from Quimsacocha assaying up to 9.5 g/t Au and 46.7 g/t Ag over 101 m; 61.9 g/t Au and 66 g/t Ag over 28 m (Iamgold Press Releases dated Jan 26, 2005 and April 18, 2005).

Partial assay results received to date from the reconnaissance mapping/prospecting and sampling program have identified at least three gold-bearing, low-sulphidation epithermal style vein/stockwork systems. These systems appear to be part of a larger epithermal gold bearing field which, based on preliminary mapping and sampling, is over 1600 m long and 900 m wide. Of 69 chip and grab rock samples collected from this area, including 64 from outcrop, 14 returned assay values greater than 1.0 g/t Au. To date, three main mineralized areas have been defined within the Canaribamba area of the Shyri property:

- The Alberto Prospect, exposed continuously over a minimum 50 m strike length and 40 m vertically along a steep slope, contains multiple veins ranging up to 1.1 m wide individually. Preliminary chip sampling has returned values of 21.7 g/t Au and 73.6 g/t Ag over 0.4 m, and 7.2 g/t Au and greater than 100 g/t Ag (assays pending) over 0.6 m. A grab sample of one of the veins returned 30.9 g/t Au and 46.9 g/t Ag.

- The Pinglio Prospect includes both extensive recent and historic artisanal mine workings. There, sampling within a 300 m by 50 m area of an extensively argillic-altered diatreme breccia, cut by multiple narrow quartz veins up to 20 cm wide, returned assay values up to 27.7 g/t Au and 13.8 g/t Ag, 4.2 g/t Au, 3.9 g/t Au and 3.4 g/t Au from grab samples.

- Chip sampling of veins within the Ramos Porteros Prospect returned assay values of 4.2 g/t Au and 7.7 g/t Ag over 1.0 m, and 2.3 g/t Au and 25.5 g/t Ag over 0.5 m.

Additionally, results are pending from sampling of several new potential gold-bearing systems identified elsewhere on the property during this program.

The mineralization at Canaribamba is hosted within the margin of a 6 km2 diatreme intrusive pipe complex which cuts an extensively argillic altered volcanic/intrusive sequence. The Shyri property straddles the Ganarin Belt, a 50 km long belt featuring volcanic centers and numerous epithermal gold-silver prospects and is the site of the fabled Spanish colonial era gold mines.

The agreement gives Cornerstone the right to acquire an undivided 100% interest in the Sierramin properties by incurring exploration expenditures of US$1.15 million, making cash payments of US$200,000, and issuing Cornerstone Capital Resources shares to the value of US$200,000 over four years. The agreement also gives Cornerstone access to a detailed regional geochemical database comprised of over 5000 heavy mineral, BLEG, sand, silt and rock samples collected over approximately 5,500 km2 of southern Ecuador. The database was generated in the mid to late 1990's at a cost of approximately US$1.6 million but has seen little follow-up. Cornerstone is evaluating the database with a view to acquiring additional concessions under the terms of the agreement.

The Qualified Person for these projects, as per the definition in National Instrument 43-101, is Mike Basha, P.Eng., P.Geo., Exploration Manager for Cornerstone.

In other news, as announced on April 15, 2005 certain insiders have been retained to provide ongoing management, consulting and legal services. At the option of the consultants, the Company may issue shares, on a quarterly basis, as compensation for the services rendered. All these consultants have agreed to accept shares as compensation and the Company has issued 257,569 common shares at a deemed issue price of $0.36 for services rendered during the First Quarter.

Cornerstone Capital Resources Inc. is a mineral exploration company based in Mount Pearl, Newfoundland & Labrador, Canada, with a diversified portfolio of projects in Canada and Ecuador 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. Cornerstone's current and past joint venture partners include Agnico Eagle, Candente, Falconbridge, Inmet/Woodruff, Kermode, Moydow, Noranda, Phelps Dodge, and Thundermin.

On Behalf of the Board of Directors

Glen H. McKay, President

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

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