Cornerstone Capital Resources Inc.

Cornerstone Capital Resources Inc.

March 28, 2006 08:00 ET

Cornerstone Plans $5.5 Million in Exploration in 2006

MOUNT PEARL, NEWFOUNDLAND AND LABRADOR--(CCNMatthews - March 28, 2006) - Cornerstone Capital Resources Inc. (TSX VENTURE:CGP) is pleased to report that 2006 will be a record year for exploration activity on its projects in Canada and Ecuador. Current plans call for exploration expenditures in 2006 to reach an estimated CDN$5.5 million, of which more than 85%, or about CDN$4.7 million will be funded by Cornerstone's joint venture partners. The work will include several drilling programs with a minimum of 10,000 metres over seven projects.

Glen McKay, President, stated: "Cornerstone shareholders should see a steady flow of exploration news, including drill results, over the year. The record amount of exploration activity represents the fulfillment of a year of intense work on developing new projects and partnerships. We were successful in generating new high potential projects in each of the regions we have been targeting - Labrador, Newfoundland and Ecuador - and in concluding joint venture agreements to pursue those projects".

Highlights of 2006 joint venture project plans include:


Together with partner Agnico-Eagle Mines Ltd. (TSX-AGE), Cornerstone plans to drill between 1,500 and 2,000 m on its El Strato gold property. Drilling will test coincident IP and gold-in-soil anomalies, and follow-up on gold mineralization intersected in 2005 including intersections assaying up to 10.6 g/t Au over 1.13 m (press release dated October 27, 2005; This represents the second year of a four year option agreement with Agnico-Eagle whereby the company can earn a 51% interest in the property by spending CDN$1.95 million on exploration and paying Cornerstone CDN$150,000.

After an initial year of jointly funded reconnaissance work, Phelps Dodge Corporation of Canada, Limited ("Phelps Dodge") has agreed to enter into a definitive joint venture agreement on the Codroy Sediment-hosted Stratiform Copper (SSC) project. As operator, Cornerstone plans to complete 1,000 to 1,200 m of drilling on the project in western Newfoundland, in follow-up to results generated by prospecting and geochemical sampling completed in 2005 (press release dated August 23, 2005; The program will test stratigraphic units that host anomalous copper mineralization yielding grab sample assays of up to 1.62% Cu with 6.4 g/t Ag. Phelps Dodge will fully fund the 2006 program under a joint venture agreement that gives them the right to earn a 51% interest in the property by spending US$3 million on exploration and making cash payments totaling US$225,000 over three years.

With partner Thundermin Resources Inc. (TSX:THR), Cornerstone is planning to complete a minimum 1,000 m drill program on its Cape Ray gold property in southwestern Newfoundland. This program will focus largely on following up favourable drilling results generated during the 2004 drilling program at the Windowglass Hill prospect, where mineralization assaying up to 7.54 g/t Au and 49.1 g/t Ag over 5.15 m, including 14.5 g/t Au and 60.8 g/t Ag over 2.2 m (press release dated January 20, 2005; The 2006 program represents Thundermin's third year of a four year option and earn-in agreement whereby Thundermin has the right to earn a 55% interest in the project by spending CDN1.75 million on exploration and making cash and share payments totaling CDN$100,000 and 150,000 shares respectively.

Cornerstone and Woodruff Capital Management Inc. (TSX-V:WOO), recently entered into an option and earn-in joint venture agreement on the Long Lake volcanogenic massive sulphide project in central Newfoundland (press release dated March 01, 2006; Cornerstone is the operator of the program that will involve drill testing a 1.2 km long untested airborne geophysical conductor associated with a broadly coincident base metal-in-till geochemical anomaly. Plans entail completing 400 m of diamond drilling in the first year of an agreement whereby Woodruff can earn a 51% interest in the property by spending CDN$1.5 million on exploration and making cash payments totaling CDN$100,000 over four years. The property is located 60 km southwest of Aur Resources' Duck Pond project where Aur is currently building a mine and mill complex to exploit reserves of 4.1 million tonnes at an average grade of 3.3% Cu, 5.7% Zn, 59.3 g/t Ag and 0.86 g/t Au (Aur 2004 Annual report).


Under a recently announced joint venture agreement (news release dated March 24, 2006;, Celtic Minerals (TSX-V:CME), is committed to exploring Cornerstone's Garland Ni project, 30 km southeast of Inco's Voisey's Bay mine. The three year agreement commits Celtic to spending a minimum of CDN$0.5 million in the first year. The 2006 program is expected to include airborne gravity gradiometry and ground magnetotelluric (MT) surveys and is designed to detect buried mineralization similar to that mined at Voisey's Bay. Celtic has the right to earn a 51% interest in the property by spending CDN$3 million over three years and making cash payments totaling CDN$450,000. This area around Garland Lake has recently been highlighted by senior management of Inco as having significant potential for discovery of Ni-Cu-Co sulphide deposits similar to Voisey's Bay and Cornerstone's property is entirely enclosed by claims staked by Inco in August 2005 which cover an area of 1,721 km2 south of Voisey's Bay.

The foregoing discussion of Newfoundland and Labrador projects has been reviewed and approved by Paul Moore, M.Sc., P.Geo., Chief Geologist for Cornerstone and a Qualified Person as defined in National Instrument 43-101.


Drilling is planned to commence in April on the La Plata project in Ecuador under Cornerstone's joint venture agreement with Coastport Capital (TSX-V:CPP) (news release dated November 23, 2005; The property hosts gold-rich VMS mineralization, including the La Mina deposit, where drilled intersections from limited previous exploration drilling of up to 11.4 m grading 14.5 g/t Au, 103.6 g/t Ag, 9.35% Cu and 3.9% Zn were reported. A preliminary resource prepared by Cambior Mines Inc in 1998, presents a summary of inferred mineral resources(1), based on 28 widely spaced diamond drill holes, as follows:

Tonnage(tons) Au(g/t) Ag(g/t) Cu(%) Zn(%) Pb(%)
Total Resources 840,459 4.8 54.4 4.1 4.2 0.7

(1) Note: Resources referred to within this release are not compliant with the requirements of National Instrument 43-101. Cornerstone nor Coastport have undertaken an independent investigation of the resource estimates nor independently analyzed the results of the previous exploration work in order to verify the classification of these resources. The historical estimates, therefore, should not be relied upon. Nevertheless, Cornerstone and Coastport believe that these historical estimates provide a conceptual indication of the exploration potential of the property. The Companies wish to clarify that the resources reported in the Jan 06/06 news release were not verified by Cornerstone or Coastport and are hereby retracted.

Drilling will include approximately 2,500 m in the La Mina deposit, and will also test the Guatuza and San Pablo prospects. The program will also include borehole Pulse EM geophysics and 65 km of surface IP geophysics. Exploration expenditures of US$1 million are a requirement to maintain the agreement through the first year.

The La Plata agreement gives Coastport the right to acquire Cornerstone's 70% interest in the property with total exploration expenditure of US$3 million, cash and share payments of US$350,000 each, production of a bankable feasibility study, and arranging mine financing, all within eight years. To fully vest, Coastport must give Cornerstone additional shares representing 10% of its fully diluted share capitalization and a 1% NSR.

The Shyri project, also under joint venture to Coastport Capital (news release dated January 20, 2006;, is currently being advanced through geochemical and geophysical surveys as well as prospecting, mapping and hand-trenching covering a range of gold-silver prospects. A preliminary 3,000 m drill program is being planned for mid-late summer start-up and will test several targets. The project covers an area of over 450 sq km in south-central Ecuador and lies immediately adjacent to IAMGold Corporation's Quimsacocha project. Work on the project since acquisition in February 2005 has identified numerous high grade gold and silver prospects, demonstrating potential for low and high sulphidation precious metal deposits in several target areas across the property, several of which have returned bonanza grade assays (news releases dated February 20, 2006;

Under the Shyri agreement, Coastport will have the right to acquire 100% of the property after exploration expenditure of US$8 million, and option payments of US$490,000 each in cash and shares, all over a period of 4 years or less. Coastport may then acquire its 100% interest by issuing shares to Cornerstone representing 40% of the fully diluted share capitalization of Coastport and granting Cornerstone a 1% net smelter royalty. Cornerstone is the operator until earn-in.

The foregoing discussion of Ecuador projects has been reviewed and approved by Mike Basha, P.Eng., P.Geo., Vice President, Exploration for Cornerstone and a Qualified Person as defined in National Instrument 43-101.

Other Projects

In addition to the above joint venture-funded programs, Cornerstone also plans to spend approximately CDN$0.8 million to advance several of its 100% owned projects and to generate additional projects of merit. Areas of focus will include the Voisey's Bay Ni-Cu-Co mining district in Labrador as well as opportunities in Ecuador. The company hopes to conclude additional joint ventures as the year progresses.

Cornerstone's business model is predicated on generating high quality exploration projects which have the potential to yield outstanding returns to the company and its shareholders but which can be financed through joint venture partnerships. Cornerstone's current and past joint venture partners include Agnico Eagle, Candente, Celtic Minerals, Coastport Capital, Falconbridge Mining, Inmet Mining, Woodruff Capital Management, Kermode Resources, Moydow Mines, Noranda Inc, Phelps Dodge Mining, and Thundermin Resources.

On Behalf of the Board of Directors

Glen H. McKay, President

WARNING: This news release contains forward looking information. The reader is cautioned that assumptions used in the preparation of such information, although considered accurate at the time of preparation, may prove incorrect. The actual results may vary materially from the information provided herein. Consequently, there is no representation by Cornerstone or Coastport that actual results achieved will be the same as those forecast.

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

Contact Information

  • Cornerstone Capital Resources Inc.
    Glen McKay
    Toll free 1-877-277-8377
    Cornerstone Capital Resources Inc.
    Mike Basha
    VP Exploration
    Toll free 1-877-277-8377
    Cornerstone Capital Resources Inc.
    Paul Moore
    Chief Geologist
    Toll free 1-877-277-8377
    Cornerstone Capital Resources Inc.
    Rosanne Williams
    Manager Corporate Communications
    Toll free 1-877-277-8377
    Cornerstone Capital Resources Inc.
    109 Clyde Avenue
    Mount Pearl, NL A1N 4R9
    Toll Free: 1-877-277-8377 or 1-709-745-8377