Cornerstone Capital Resources Inc.

Cornerstone Capital Resources Inc.

February 25, 2005 15:43 ET

Cornerstone Acquires Gold Projects in Ecuador


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: CORNERSTONE CAPITAL RESOURCES INC.

TSX VENTURE SYMBOL: CGP

FEBRUARY 25, 2005 - 15:43 ET

Cornerstone Acquires Gold Projects in Ecuador

MOUNT PEARL, NEWFOUNDLAND--(CCNMatthews - Feb. 25, 2005) - Cornerstone
Capital Resources Inc. (TSX VENTURE:CGP) is pleased to announce that it
has initiated an exploration program in Ecuador. The company has
acquired rights to properties in the highly prospective
epithermal/porphyry belts in the southeastern region of the country and
access to a geochemical database covering large areas of southern
Ecuador. The acquired properties include ground contiguous with
Iamgold's Quimsacocha Project where drilling has encountered a series of
high-grade intersections.

Cornerstone will be establishing a wholly owned subsidiary, Cornerstone
Ecuador S.A., on behalf of which it has entered into an agreement with
Sierra Minera (Sierramin) S.A., a private Ecuadorian mining and mineral
exploration company, and others, to acquire 100% interest in mineral
properties in southeastern Ecuador totaling 282 km2 in area. 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.

Initial exploration focus will be on the Shyri property, an area
approximately 12 by 19 km that straddles the Ganarin Belt, a 50 km long
belt featuring volcanic centers and numerous epithermal gold-silver
prospects. The Shyri property is also south of and immediately adjacent
to the Quimsacocha project where Iamgold recently announced drill
intersections assaying up to 9.5 g/t Au and 46.7 g/t Ag over 101 m
(Iamgold Press Releases dated Nov 8, 2004 and Jan 26, 2005). The Shyri
property is the site of the fabled Spanish colonial era Canaribamba gold
mines. The property is underlain by an argillic altered
volcanic/intrusive sequence cut by a 6 km2 diatreme intrusive pipe
complex. The diatreme hosts two known gold-silver bearing, epithermal
vein systems, the largest of which has been outlined over an area of 700
by 300 m. Recent work by Sierramin has identified multiple
low-sulphidation epithermal-style quartz veins up to 1.5 m wide. Results
from the Sierramin work include grab sample assays to 6.7 g/t Au and 70
g/t Ag over 0.8 m from an outcropping vein and up to 233 g/t Au and 344
g/t Ag from quartz vein float downstream from artisanal mine workings.

The Rinconada Project, a property of approximately 32 km2 located near
the Ecuador-Peru border, hosts gold bearing quartz-tourmaline veins and
breccias associated with an intrusive body. Recent work by Sierramin has
returned assay values from channel samples to 23.8 g/t Au over 1.0 m and
7.3 g/t Au over 1.8 m. The Monterrey Project, approximately 20 km2 in
area, hosts gold mineralization associated with altered and brecciated
intrusive rocks cutting meta-volcanics and meta-sediments. Recent
channel sampling by Sierramin returned assays of 7.3 g/t Au over 1.1 m.
Widespread stream, silt and heavy mineral anomalies occur across both
project areas. A map showing the locations of all the properties may be
viewed on the Cornerstone Web site at www.cornerstoneresources.com.

Glen McKay, President, said that Cornerstone decided to launch its first
international venture in Ecuador because it views the country as an area
of emerging exploration opportunities. The prolific porphyry and
epithermal metallogenic belts of northern Peru may be interpreted to
extend into relatively under-explored Ecuador. The country revised its
mining code and tax regime in 2000-2001 to facilitate exploration and
mining investment. Mr. McKay stated: "The opportunity to work in Ecuador
is also attractive because we are able to partner with Sierramin, a
reputable and experienced Ecuadorian company. The arrangement gives
Cornerstone the immediate working capability to apply its business model
and proven exploration approach and quickly advance our Ecuador projects
to the drill ready stage for potential joint venture participation. The
agreement is our corporate mantra, 'People, Process, Projects', in
action. We see this acquisition as an attractive exploration opportunity
with potential for near term rewards for our shareholders that
complements our ongoing program in Newfoundland & Labrador."

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. Requirements to maintain the agreement through the
first year include cash payments of US$50,000 plus US$50,000 in shares
and exploration expenditures of US$175,000. The acquisition is subject
to a 3% Net Smelter Royalty of which Cornerstone may purchase 1% for
US$4 million and an additional up to 1% at market value. The agreement
also provides for Cornerstone to retain Minera Cachabi C. Ltda.
(Mineca), an associate company of Sierramin, to utilize Mineca's
personnel and resources to operate the projects.

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.

Cornerstone Capital Resources Inc. will hold Cornerstone Ecuador S. A.
through Cornerstone International Limited, a company registered in the
Bahamas to hold Cornerstone's international assets.

In other developments, the private placement of $250,000, announced on
February 2, was fully subscribed by Falconbridge Limited on February 7
pursuant to the Cornerstone/Falconbridge Labrador Strategic Alliance
agreement announced in September 2004. Recently, 100,000 options to buy
common shares at $0.32 (market close plus one cent on date of
appointment as per corporate policy) were granted to a newly appointed
Director. Also, Candente Resource Corp. advised Cornerstone of its
intention not to continue with its option agreements on the Island Pond
and Paul's Pond projects. Cornerstone has received expressions of
interest from other potential Joint Venture partners and is currently
holding discussions on these and other properties.

Cornerstone Capital Resources Inc. is a well-funded mineral exploration
company based in Mount Pearl, Newfoundland & Labrador, Canada, with a
diversified portfolio of projects targeting gold, nickel, copper and
polymetallic (VMS) deposits. 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.

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Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    Cornerstone Capital Resources Inc.
    Glen H. McKay
    President
    Toll Free at 1- 877-277-8377
    Email: investor@crigold.com
    Website: www.cornerstoneresources.com
    The TSX Venture Exchange does not accept responsibility for the adequacy
    or accuracy of this release.