Cornerstone Capital Resources Inc.

Cornerstone Capital Resources Inc.

October 30, 2006 08:00 ET

Cornerstone Provides Update on Joint Ventures in Newfoundland & Labrador

MOUNT PEARL, NEWFOUNDLAND--(CCNMatthews - Oct. 30, 2006) - Cornerstone Capital Resources Inc. (TSX VENTURE:CGP) (FWB:GWN) (BERLIN:GWN) is pleased to provide an update on its joint ventured projects in Newfoundland and Labrador. The five projects target copper, zinc, gold and nickel. Cornerstone estimates that 2006 exploration expenditures on the projects will total CDN$1.5 million. Work to date has included four diamond drill programs totaling 4,502 m. The results are summarized below.

El Strato Au Project- Agnico-Eagle Mines JV

Cornerstone recently completed a 2,125 metre drill program, funded by partner Agnico-Eagle Mines Ltd. (TSX:AGE). Drilling tested coincident IP and gold-in-soil anomalies and followed-up 2005 drill holes that intersected mineralized veins with results of up to 10.6 g/t Au over 1.13 m (News release October 27, 2005). The 2006 drill program returned significant gold values from multiple veins that define mineralized gold systems including a 100 m x 120 m alteration zone with quartz-carbonate veins at the Northeast Extension Showing ( Assay highlights include 6.9 g/t Au over 0.20 m from drill hole ES-06-13 and 2.8 g/t Au over 0.3 m from hole ES-06-14. Other assay values from this showing area include 1.8 g/t Au over 0.8 m in hole ES-06-11 and 4.9 g/t Au over 0.20 m in hole ES-06-13. Drill hole ES-06-15 was collared at the Crooked Creek Showing, 500 m northeast of the Northeast Extension Showing, where it intersected five veins that returned assays up to 7.3 g/t Au over 0.45 m, 5.6 g/t Au over 0.31 m, and 1.7 g/t Au over 0.70 m. Three additional drill holes were collared in the Fox Pond area, 3 km northeast of the Crooked Creek Showing, to test chargeability/resistivity anomalies and returned only anomalous gold values up to 394 ppb Au over 0.30 m. All reported widths are core lengths. The 2006 work 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.

Codroy Cu Project - Phelps Dodge JV

Cornerstone and Phelps Dodge Corporation of Canada Limited recently completed 917 metres of drilling in five holes on the Codroy Sediment-hosted Stratiform Copper (SSC) project in southwest Newfoundland. The drilling was conducted in follow-up to positive results generated during the 2005 prospecting program and was designed to test favourable stratigraphic horizons that were shown to host widespread copper mineralization. Previously collected grab and chip samples from the beds assayed up to 1.62% Cu. Each drill hole intersected multiple reduced grey beds, less than 1 m to 14 m in width, which had demonstrated potential to host copper mineralization. Assays result highlights are 1,461 ppm Cu over a core length of 0.50 m in hole CD-06-02 and 2,610 ppm Cu over a core length of 0.70 m in hole CD-06-04. Other grey beds intersected gave elevated copper values less than 1,000 ppm. Phelps Dodge funded the 2006 program under an 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. Cornerstone is the program operator.

Cape Ray Au Project - Thundermin Resources JV

With partner Thundermin Resources Inc. (TSX:THR), Cornerstone completed 1,060 metres of drilling across three mineralized zones on the Cape Ray gold property in southwestern Newfoundland. This program followed up 2004 drill results from the Windowglass Hill prospect that included drilled intersections up to 7.54 g/t Au and 49.1 g/t Ag over 5.15 m (News release January 20, 2005). The 2006 drill program was largely focused on testing the down-dip continuation of gently dipping auriferous quartz vein sets at the Windowglass Hill Main Zone and other shallow targets. Results of the 2006 program include drilled intersections up to 4.6 g/t Au and 189.7 g/t Ag over 0.95 m (hole WGH-06-024), and 1.3 g/t Au and 1.2 g/t Ag over 6.57 m (hole WGH-06-25) from the Main Zone. A new vein system was intersected 0.6 km to the northeast (Area 3) in hole WGH-06-26 which returned assays of 12.9 g/t Au and 113.9 g/t Ag over 0.70 m ( All sample widths reported here are approximate true widths, based on observed core angles. The 2006 program represents Thundermin's fourth year of a five year option and earn-in agreement whereby Thundermin has the right to earn a 55% interest in the project by spending CDN$1.75 million on exploration and making cash and share payments totaling CDN$100,000 and 150,000 shares respectively.

Long Lake VMS Project - Cogitore Resources JV

Cornerstone and Cogitore Resources Inc., (TSX-V:WOO), completed 400 m of diamond drilling on the Long Lake joint venture in central Newfoundland. The project is considered prospective for high grade volcanogenic massive sulphides and is located 60 km southwest of AUR Resources' Duck Pond project. AUR is currently developing a mine at Duck Pond 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 2005 Annual report). The 2006 drill program tested a 1.2 km long geophysical conductor associated with a broadly coincident base metal-in-till geochemical anomaly. The drilling returned broad intersections of altered and mineralized felsic volcanics including several narrow sulphide stringers that gave assays up to 3.2% Zn over 0.2 m. Cogitore 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.

Garland Ni Project - Celtic Minerals JV

Celtic Minerals (TSX-V:CME) continue to explore Cornerstone's Garland Ni project, 30 km southeast of Inco's Voisey's Bay mine. Celtic, as operator of the joint venture, have completed Magnetotelluric (MT) surveys in follow-up to targets generated by a shared airborne gravity-gradiometry survey conducted by Inco over the project earlier this year. Final MT results have now been received from the contractor, Quantec Geoscience Ltd., who recommends drill testing two zones of low resistivity located at a depth of 650 m. The targets are located on the flank of an airborne gravity gradiometry anomaly within the southern block of the Garland property, 8 km southeast of Inco's Plugger Hill prospect ( and Celtic are considering the targets for drilling and will advise Cornerstone whether they will drill the targets later this year or defer until 2007. Celtic has the right to earn a 51% interest in the 53 km2 property by spending CDN$3 million over three years and making cash payments totaling CDN$450,000. This area has been highlighted by Inco as having significant potential for discovery of Ni-Cu-Co sulphide deposits similar to the Voisey's Bay mine. The Garland property is entirely enclosed by claims controlled by Inco.


With joint venture exploration programs essentially complete for 2006, our respective partners will be reviewing results and remaining exploration targets for each project in the coming months to decide if they wish to pursue their joint ventured projects in 2007. Cornerstone believes each of the projects merits continued exploration.

As defined in National Instrument 43-101, Paul Moore, M.Sc., P.Geo., Chief Geologist for Cornerstone, is the Qualified Person for this press release and all technical information regarding the Garland project. Bruce Mitton, P.Geo., and Andrew Hussey, P. Geo., both Qualified Persons as per NI43-101, are respectively responsible for all technical information pertaining to the El Strato, Codroy, and Cape Ray projects and for the Long Lake project. Drill cores were sampled by splitting the core longitudinally with a diamond saw. One half of the core was used for assay and the other retained for future reference. Eastern Analytical Laboratories Ltd. of Springdale, Newfoundland & Labrador, assayed all samples for base metals and gold. Gold was determined by fire assay and other elements by Inductively Coupled Plasma Spectrometry (ICP). A method of quality control involving check assaying and insertion of previously prepared standards for each batch of 30 samples was maintained throughout each project. ACME Analytical Laboratories Ltd of Vancouver completed ICP Mass Spectrometry analysis of all Codroy Project core samples. The core samples were crushed at Eastern Analytical Laboratory and the pulp samples shipped to Vancouver for analysis.

Cornerstone gratefully acknowledges funding assistance provided for the El Strato, Codroy and Cape Ray drilling programs from the Government of Newfoundland & Labrador under the Junior Exploration Assistance Program (JEA).

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 and which can be financed through joint venture partnerships. Cornerstone's current and past joint venture partners include Agnico-Eagle Mines, Candente Resource Corp., Celtic Minerals, Coastport Capital, Cogitore Resources, Falconbridge, Inmet Mining, Kermode Resources, Moydow Mines, Noranda, Phelps Dodge, and Thundermin Resources.

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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