Intrepid Mines Limited

Intrepid Mines Limited

October 29, 2009 21:10 ET

Intrepid Mines and Cornerstone Resources Sign Binding Term Sheet for the Shyri Gold-Silver-Copper Property, Ecuador

BRISBANE, AUSTRALIA--(Marketwire - Oct. 29, 2009) - Intrepid Mines Ltd (TSX:IAU)(ASX:IAU) ("Intrepid") and Cornerstone Capital Resources Inc. (TSX VENTURE:CGP) ("Cornerstone") announce that they have signed a binding Term Sheet outlining the terms of an option/joint venture arrangement over Cornerstone's Shyri property in Ecuador.

The 300 km2 Shyri property is located in Azuay province, southern Ecuador, about 25 km west of the city of Cuenca. The property encompasses three gold prospects, Gama, Vetas Grandes, and Cañaribamba. It is strategically located between IAMGOLD's 3.5 million ounce Quimsacocha gold project to the east and International Minerals' Rio Blanco gold project to the northwest. 

Brad Gordon, Intrepid's CEO, commented, "Intrepid is pleased to be partnering with Cornerstone on the Shyri project. We are keen to apply the knowledge and skill acquired from working in similar geological environments at Tujuh Bukit in Indonesia to this exciting project. We see great potential at Shyri."

The Term Sheet allows for Intrepid to earn a 60% interest in the Shyri property by making an initial cash payment of US$250,000 and making a US$500,000 private placement in Cornerstone shares, based on the TSX-V weighted average market price over the previous five business days, plus a 20% premium. Intrepid has also committed to spending US$6 million dollars over 5 years, including a commitment of US$1 million in the first year. Intrepid may withdraw from the arrangement at any time after expending US$1 million.

The grant of the option in respect of the joint venture will be conditional upon the fulfillment of conditions precedent including obtaining regulatory and third party approvals and the execution of formal option and joint venture documentation.

Intrepid will have the further right to earn an additional 20% interest in a specific area of the Shyri property of up to 5,000 hectares defined as a Project Area. Upon designation of a Project Area, Intrepid will make a further US$750,000 private placement in Cornerstone. To earn the additional interest, Intrepid will complete a bankable feasibility study or incur expenditures of US$20 million, whichever comes first, and make a cash payment to Cornerstone of between US$1.5 million and US$5 million, based on the gold equivalent ounces in the mineral reserve. There is no limit to the number of Project Areas Intrepid may designate within the property and each 'stand-alone' Project Area has the same earn-in requirements.

During the earn-in period, Cornerstone will serve as Project Manager for the exploration programs under the technical direction of Intrepid as Operator. 

Intrepid and Cornerstone are preparing the final terms and conditions of the earn-in and joint venture and expect to conclude a Definitive Agreement within 75 days.

About Shyri

The Gama prospect comprises an extensive, sub-horizontal zone of high sulphidation alteration measuring a minimum of 8.5 km by 3 km. The alteration is strongly zoned and centred over two high level, porphyry-type intrusions at the 3500m to 3800m elevations, the same elevation as the nearby Quimsacocha deposit. An interpreted post-mineralisation auriferous breccia zone, the Ermitas breccias, contains vuggy silica fragments in a sulphide matrix and a broad northwest trending gold-in-soil anomaly is associated with the alteration zone. 

The Vetas Grandes gold mineralisation, 20 km south of Gama, was discovered by Cornerstone in 2005. The prospect comprises multiple, ENE trending epithermal quartz veins and vein breccias measuring from 1 to 7m in width within a zone at least 2 km long and 1.5 km wide. Veins containing gold and silver are exposed over a vertical relief of 300m with the highest gold values localised at vein intersections and where veins outcrop around the 3,220m elevation. 

The Cañaribamba prospect is an intermediate sulphidation, disseminated and vein-type gold system situated in a large, multi-phase diatreme breccia complex. The area has a history of artisanal mining of high grade veins over at least 300m of elevation and in the 1970's four short drill holes were completed on one of the four recognized vein systems. Work by Cornerstone expanded known gold mineralisation another 500m east with the discovery of the Guabisay structure. 

Cornerstone has completed extensive geological, geochemical and geophysical (magnetic and IP) surveys over the prospects and has outlined several high priority drill targets in each area.

About Intrepid

Intrepid Mines is an international precious metals production, development and exploration company with operations in Australia, Indonesia and Mexico. The Company's vision is to build long-term value for shareholders by becoming a significant international gold producer, with its highly prospective key assets sustaining future growth. Its history of deliberate and considered action on growth opportunity is part of its strategy to become a significant participant in the international gold sector.

About Cornerstone

Cornerstone Capital Resources Inc. is a mineral exploration company based in Mount Pearl, Newfoundland and 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.


This announcement contains certain forward-looking statements, relating to, but not limited to Intrepid's expectations, intentions, plans and beliefs. Forward-looking information can often be identified by forward-looking words such as 'anticipate', 'believe', 'expect', 'goal', 'plan', 'intend', 'estimate', 'may' and 'will' or similar words suggesting future outcomes, or other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future outcomes, or statements about future events or performance. Forward-looking information may include reserve and resource estimates, estimates of future production, unit costs, costs of capital projects, and timing of commencement of operations and is based on current expectations that involve a number of business risks and uncertainties. Factors that could cause actual results to differ materially from any forward-looking statement include, but are not limited to, failure to establish estimated resources and reserves, the grade and recovery of ore which is mined varying from estimates, capital and operating costs varying significantly from estimates, delays in obtaining or failures to obtain required governmental, environmental or other project approvals, inflation, changes in exchange rates, fluctuations in commodity prices, delays in the development of projects and other factors. Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ materially from those expressed or implied.

Shareholders and potential investors are cautioned not to place undue reliance on forward-looking information. By its nature, forward-looking information involves numerous assumptions, inherent risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and various future events will not occur. Intrepid undertakes no obligation to update publicly or otherwise revise any forward-looking information whether as a result of new information, future events or other such factors which affect this information, except as required by law.

Statements relating to gold resource estimates are expressions of judgment, based on knowledge and experience and may require revision based on actual production experience. Such estimates are necessarily imprecise and depend to some extent on statistical inferences and other assumptions, such as gold prices, cut-off grades and operating costs, which may prove to be inaccurate. The drill programme at Shyri is insufficiently advanced to define a resource estimate and it is uncertain if further drilling will result in the determination of a resource statement at the project.


Cornerstone exercises a strict chain of sample custody during its exploration program at Shyri. Samples are securely packaged, batched, and then transported under supervision to ACME-Cuenca for sample preparation and then shipped to ACME-Vancouver for assaying. At the laboratory, the samples are prepared by crushing and pulverizing and a 15 gram charge is assayed using ICP/ES & MS. Re-assaying is made using 30g. FA/AA finish is applied on samples with >10000 ppb Au, and for over limit for the other elements.


The information in this announcement that relates to exploration results is based on information compiled by or under the supervision of Terry Brace, P. Geo, Cornerstone's VP Exploration. Mr Brace has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" and as a Qualified Person as defined in the Canadian National Instrument 43-101 (standards of Disclosure for Mineral Projects). Mr Brace consents to the inclusion in the announcement of the matters based on his information in the form and context in which it appears.

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