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Re: Friday, August 03, 2007
Cornerstone July Update
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As I'll be traveling for the first two weeks in August and only
intermittently available, the monthly update is being provided a little
earlier than usual. Here's a quick report on project status since our
July 10th update;

1. Bobby's Pond VMS project which is under JV with Mountain Lake
Resources (MLR) -- On July 26th Mountain Lake Resources Inc. (TSX-V:
MOA) announced that it had encountered widespread base metals in two of
the three holes completed on the Cornerstone claims. Targeting for
additional drill holes will be determined once the results of the
downhole Pulse EM surveys have been received. Attention will be focused
this summer on field programs to generate targets for drill testing on
the Cornerstone Option to the northeast of Mountain Lake's 100% owned
mining lease. We are very pleased with these results from our first
drill program this season.
http://www.cornerstoneresources.com/s/NewsReleases.asp (Location --
Buchan's Zn-Cu-Pb-Au-Ag Mining District in Newfoundland)
http://www.cornerstoneresources.com/s/Newfoundland.asp?ReportID=136409

2. Little Deer Copper Deposit which is under JV with Thundermin
Resources -- as announced on July 10th a 5,300 m drill program has
commenced. (Location -- Green Bay Cu-Au Mining District in
Newfoundland). The LDJV partners feel that the Little Deer deposit has
potential to be expanded and we look forward to the results of the
drilling program. (See
http://www.cornerstoneresources.com/s/NewsReleases.asp &
http://www.cornerstoneresources.com/s/Newfoundland.asp?ReportID=183644)

3. Garland Lake Nickel project which is under JV with Celtic Minerals
-- a 750 m (minimum) drill program is currently being planned and is
now expected to start around mid August. (Location -- Voisey's Bay
Ni-Cu-Co Mining District in Labrador)
http://www.cornerstoneresources.com/s/Labrador.asp?ReportID=136483

4. Shyri Gold project which is under JV with Coastport Capital -- a
15,000 m drill program is currently being planned and will commence
upon receipt of drill permits. We've had many inquiries as to when the
permits are expected to be received. For more information refer to the
commentary near the end of this update. (Location -- contiguous with
Iamgold's Quimsacocha gold project in Ecuador, which hosts 3.4 million
oz. gold)
http://www.cornerstoneresources.com/s/Ecuador.asp?ReportID=136203

5. La Plata VMS project which is under JV with Coastport Capital -- a
field program designed to further assess several untested coincident
geophysical and geochemical anomalies started early in July. When that
program is completed, the timing of the resumption of the remaining
4,585 m from the Phase Two 8,000 m program will be subject to equipment
availability. (Location -- Macuchi Zn-Cu-Pb-Au-Ag Mining District in
Ecuador)
http://www.cornerstoneresources.com/s/Ecuador.asp?ReportID=136199

Based on the forgoing we have in excess of 26,300 m (86,285 feet) of
drilling "on the books" at the moment. There is potential for that
number to increase.

URANIUM:
Newfoundland and Labrador: The airborne radiometric survey that
Cornerstone is funding on the Deer Lake Uranium has been completed and
we await the interpretation of the results. The Aillik airborne
radiometric survey is underway. Cash Minerals plan to mobilize a
Reconnaissance crew to the site late August and if all goes as expected
drilling may occur during late September and October. If so this will
be additional to the 26,300 m of drilling which was announced earlier.
http://www.cornerstoneresources.com/s/Newfoundland.asp?ReportID=168321

New Brunswick: A field program is underway. For more information go to
http://www.cornerstoneresources.com/s/Newbrunswick.asp?ReportID=171723

OTHER:
Cornerstone has also initiated work programs on several 100% wholly
owned properties aimed at advancing the properties to the joint venture
stage. Included is work on:

- The Caymatan Gold-Silver and Rinconada Gold Projects in Ecuador.

- Cornerstone has land concession holdings in southern Ecuador
comprising approximately 130,000 ha. In addition we have a database
comprising >5000 BLEG, sand, silt, HM, samples covering >550,000 ha in
several areas of southern Ecuador considered highly prospective for
epithermal and porphyry deposits. It was instrumental in generating
our Shyri project. We are in the process of developing a comprehensive
regional program to use this data to develop new projects.

- The recently announced Elgin Uranium-Copper Project in New Brunswick.

- The Burin Gold Project on the island of Newfoundland. Cornerstone is
earning a 100% interest in the claims optioned from a local prospector
and has a 100% ownership of the claims recently staked.

- The Codroy Project, also in Newfoundland and underlain by similar
geology to the Deer Lake project, is being evaluated for its uranium
potential.

We continue to be very active in discussions and hosting property
visits with potential JV partners in all areas in which we are
operating. We expect to be in a position to announce new agreements
within the next four to eight weeks. In addition to these we are
entertaining serious expressions of interest on several other projects.

For further information on all Cornerstone projects please visit
http://www.cornerstoneresources.com/s/Projects.asp.

SITUATION IN ECUADOR:
There continues to be a number of news reports that are easing concerns
about the ongoing changes as regards the potential effect on the mining
industry. We include some links and headlines for your reference.

Ecuador names new economy minister
http://english.people.com.cn/90001/90777/6224655.html

Ecuador's future energy minister seeks dialogue with private oil
companies
http://www.marketwatch.com/news/story/ecuadors-future-energy-minister-seeks/story.aspx?guid=%7B7EBD297C-C7CF-45B5-9091-07EAD3F88EE2%7D

Ecuador to name moderate as deputy mining chief
http://www.reuters.com/article/bondsNews/idUSN2732985620070727

New Targets at IAMGOLD's Quimsacocha Project Show Promise
http://money.cnn.com/news/newsfeeds/articles/marketwire/0283861.htm

Quote from the News Release: "The President of Ecuador recently visited
the Cuenca (Azuay province) area and reaffirmed his government's
commitment to developing the legal, fiscal and regulatory framework for
a mining industry in Ecuador which is socially and environmentally
responsible and shares the economic benefits in an equitable way.
IAMGOLD fully supports the President's stated initiatives and is
looking forward to working with the new Minister of Oil and Mining, Dr.
Galo Alfredo Chiriboga Zambrano, to bring about positive changes for
the development of world class deposits such as Quimsacocha. The
pre-feasibility study is expected to be completed in the first quarter
of 2008."

IAMGOLD Announces Further Drill Results at Quimsacocha
http://money.cnn.com/news/newsfeeds/articles/marketwire/0275971.htm

As you no doubt recall we have an exploration target called the GAMA
prospect on our Shyri project, The main focus of the GAMA project is a
minimum 3.0 km by 5.0 km advanced argillic alteration system with
widespread massive and vuggy silica and quartz-alunite alteration,
similar to that found at Iamgold's 3.5 million ounce Quimsacocha gold
deposit located 15 km east-southeast of GAMA.

Commentary: Following the July 10th update one of our shareholders
contacted us with the following concern; quote in part "If I may
suggest something relating to the Ecuador reports - namely the
continued general use of the term NGO without naming anyone sets up an
adversarial tone across the board, as I read it, which I regard as
counter productive. We know that many NGO's are misguided and even
profoundly dedicated int'l workers, who devote and endanger their own
lives to serve,......." unquote. Readers of our monthly updates are
aware that we provide links to articles and comments made by others on
issues that may be of concern to Cornerstone, its projects and thus our
shareholders. We refrain from positioning ourselves on these matters
and concentrate on doing all we can to advance our projects to the
benefit of all stakeholders. In this context I think it is appropriate
to reprint a comment that was made in our January 4, 2007 update, which
reads as follows;

"I'd like to end this month's review with a comment on Corporate Social
Responsibility (CSR). Your Board has taken this matter very seriously.
You can read Cornerstone's Corporate Governance policies at
http://www.cornerstoneresources.com/s/Governance.asp?ReportID=159845.
However, talk (and printed text) is cheap, so what matters most are
corporate practices and actions which should clearly be in harmony with
stated policies.

We at Cornerstone recognize that mineral resources are owned by the
people of the jurisdiction in which they are located and that
development of those resources must provide maximum benefit to those
resource owners, especially local people and communities. We earn the
right to explore and develop mineral deposits by bringing to bear the
necessary technical expertise and financial resources. From the
outset, therefore, it is of utmost importance for us to establish
positive relationships with local people and to be forthrightly
transparent in communicating with them about the nature of our
programs, our methods of operations, potential environmental impacts of
our work and how we will mitigate such impacts, and the potential
economic impacts of our work. In short we have to build a platform of
mutual trust and create relationships on which responsible resource
development can proceed with the support and co-operation of local
people and communities, to the benefit of all stakeholders. We live in
an era when well educated, well informed people and groups actively
assert their legitimate concern for protecting the environment and
local populations. It is Cornerstone's objective to ensure that such
concerns are addressed throughout our projects and that our work is
conducted in conformity with the highest norms of environmental
protection and respect for human rights, including the rights of
workers and indigenous peoples. In practice we make every effort to
ensure that we go beyond full compliance with all standards in all
areas where we conduct operations." -- End quote.

During the past number of months there has been accelerated NGO
anti-mining activity in some regions in Ecuador that has made it
difficult for a number of exploration and mining companies that are
operating there. Cornerstone's management wisely decided to 'lay low'
during this period and delayed the start of the process required to
obtain drill permits until the situation improved in Azuay province
where our Shyri project is located. Recent events, some of which were
referenced in the news items linked earlier in this report, have
brought about a much more favorable environment. Following is a report
that I received on the weekend based on the view of our Ecuadorian
advisers;

"While we recognize the current socio-political risks in Ecuador we
feel that the situation has reached a turning point. The Ecuadorian
economy is slowing down due to two principle factors, 1. Oil revenues
are decreasing (revenues this year are down $170 M compared to the same
time last year) and 2. Decrease of foreign direct investment, the
latter being driven primarily by mining and oil and gas. The
government realizes that they have created an investment climate that
has stifled the development of these industries. The direct result is
lack of jobs in rural areas, the areas most in of need of investment.
The former MEM Minister and his close advisors and outside radical
supporters have been noticed. They are the principle impediment to
development. The areas most affected are now demanding action from the
government. President Correa's popularity is down below 60% form a
high of 80%. Correa is making positive steps to adjust as he is a
pragmatist and has always been. He just appointed a new minister
(Chiriboga) for mines and petroleum, seen to be pro development. He in
turn appointed a moderate candidate to head mining. On Thursday a
closed meeting of all the leaders of the majority of communities in
Azuay to discuss mining in their province voted 90-95% in favor of
responsible mining development. They intend to have another meeting
and will draft a resolution that will be presented to authorities in
Quito (the capital city). The provinces and communities in general are
in support of mining because of the direct benefits of good paying jobs
in areas that traditionally have people living a subsistence existence.
The assertion of the autonomy of the communities and provinces will
rule the day. They are voters too! So we feel the pendulum is
starting to swing the other way."

Cornerstone is now moving forward through the process required to
obtain drill permits and indications at this time are positive.

MARKET AWARENESS:
>From July 24th - 27th we exhibited at the Agora Financial Investment
Symposium in Vancouver. There will not be any conference activity
during August.

The July edition of Casey's International Speculator recommended CGP as
a BEST BUY. http://www.caseyresearch.com

On July 30th Graeme Irvine, Global Profiles LLC,
girvine@globalprofiles.net made the following comment in his published
daily report. See http://www.globalprofiles.net

This week's featured link: Cornerstone Capital Resources Inc. TSX.V:
CGP.

I think the new government in Ecuador has demonstrated that earlier pro
Chavez fears were overdone, and that they are willing to work with
outside investors in the mining industry. I will be looking to add CGP
back to the portfolio before the end of summer. (Note, Graeme had sold
his position in CGP due to concerns about Ecuador)

Cornerstone Capital Resources Inc. has a strong and dedicated technical
team who are focused on generating new projects that have great
potential for discovery. Cornerstone leverages its own exploration
funding through joint venture and strategic partnerships, providing
shareholders with potential for success at lower risk. Cornerstone has
a diversified portfolio of gold, silver, copper, nickel, VMS, and
uranium properties in Canada and Ecuador.

http://www.cornerstoneresources.com/s/Home.asp

For those who like to keep updated on trading statistics, for the seven
month period January through July 2007 a total of 23,136,182
Cornerstone shares traded at an average price of $0.71. During July a
total of 3,131,221 Cornerstone shares traded at an average price of
$0.76

As usual your comments, suggestions and inquiries are very welcome.

Best regards.
Glen

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Copyright (c) 2007 CORNERSTONE CAPITAL RESOURCES INC. (CGP) All rights
reserved. For more information visit our website at
http://www.cornerstoneresources.com/ or send
mailto:info@cornerstoneresources.com
Message sent on Fri Aug 3, 2007 at 5:30:00 AM Pacific Time
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