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Re: Monday, March 10, 2008
Cornerstone Update
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Dear Subscriber;

It has become quite clear to us that many shareholders believe that the
Shyri project in Ecuador represents the full potential of Cornerstone.
Therefore the uncertainty caused by the change of government and
proposed new laws, along with 'must-sells' due to margin calls during
this credit crunch, have had a depressing effect on our stock price
during January and February. The good news is that the price has
gradually started to rebound. Since our last update of two months ago,
we've had many inquiries about the situation in Ecuador and the status
of our application for a permit to drill on the Shyri property. The
only comment we can make is that the application is going through the
required process and we have had no indication that the permit will not
be issued.

During the PDAC last week in Toronto, I had the opportunity to converse
with several executives of companies with advanced projects in Ecuador.
Some of these executives are in active discussion with the MMP and they
report that those discussions are going very well.

I am often 'accused' by my colleagues of being an eternal optimist. I
prefer to think of it in terms of optimistic realism. Rather than
seeing problems as roadblocks, I see them as opportunities to learn how
to do things differently and better. That requires a lot of thought and
hard work because it requires a culture where the mantra is "make it
happen". Nevertheless we must acknowledge that while that works well on
the factors that we can control there are external factors that are
beyond our control, and one of these factors is political risk.

I hold to the view that the current process in Ecuador with regard to a
new mining law will yield a workable law that will be attractive to
mining companies and beneficial to the country. The recent agreement
that we finalized with Newmont on our Macara project in southern
Ecuador indicates that the second largest gold producer in the world
shares our view. The risk / reward scenario is weighted in favor of
those who have the 'intestinal fortitude' to stay with it.

Since starting our first initiative in Ecuador early in 2005, we have
assembled a highly prospective suite of projects to which we expect to
continue to attract joint venture partners. Your company is very well
positioned to take advantage of the upturn that we feel will occur when
this current period of uncertainty is behind us.

The view that many shareholders apparently have, that the Shyri project
in Ecuador represents the full potential of Cornerstone, is a mistaken
view. Whatever the reason is for that viewpoint, it overlooks the many
other projects that we are working on that hold potential for success.
However I will not take on the task here of trying to dissuade those
that hold that view but I would encourage all to visit our website to
become familiar with the full scope of our projects.

I will leave comments on work in 2008 for a later update, after our
plans are finalized in April. Recently, however, we announced some
results from 2007 exploration on Aillik Uranium and Konrad Nickel
projects, both of which we expect to be highlights for 2008.

Finally, but by no means of lesser importance, I am very pleased with
the fact that Terry Brace has joined us in the role of VP Exploration.
Terry brings us a wealth of knowledge and experience that will be
invaluable in developing Cornerstone further. We are continuing to
build a team to prepare us for the next phase of development of your
company. This is just one of several steps in a process we began last
year and it is not yet completed.

Thank you for your ongoing support and please feel free to contact us
with any inquiries or concerns.

With permission from Brent Cook we include a reprint of his commentary
in a recent issue of his newsletter 'Exploration Insights'

Political risk and taxation
by Brent Cook

Probably one of the biggest problems with mineral deposits and mines is
that once you find one, it's pretty hard to pack it up and take it home
when you don't like the way your landlord and neighbors are behaving.
Increasing metal prices over the past few years and the perceived
profitability of mining have prompted a number of countries to try and
walk off with a bigger piece of the mining pie. This is a pie they
wanted nothing to do with when mining operations were struggling to
stay alive a few years back.

The US is debating imposing what would be one of the world's highest
mineral royalty taxes. It would require hard-rock mining companies to
pay gross royalties of 4% for existing mines and 8% for future mines on
public lands.

Alberta increased the 1% oil and gas royalty to a new rate that kicks
in above US$55 a barrel and increases to a maximum of 9% when oil is
over $120 a barrel. A post-payout royalty will also increase from 25%
to 40% at $120 per barrel.

The Argentinean Government is considering reneging on a 1993 law that
guaranteed no tax regime changes for 30 years from the moment a company
submitted feasibility studies. The country is reportedly forcing at
least some mining companies to pay export duties of 5% to 10% despite
the current mining laws to the contrary.

In South Africa, the recent draft royalty bill proposed a variable
royalty rate which is a function of gross sales and profitability. If
passed, it could effectively bring the earnings of very profitable
mines into line with marginal mines. An Equity Research report
suggested gold company earnings would see a 20% decrease.

Mongolia has also been in the news with various surprise tax ideas.
Last year they authorized a 68% windfall profit tax on gold and copper
producers when copper reaches US$2,600 a tonne and gold is over US$500
an ounce. Some ministers actually proposed an 80% tax if copper broke
the US$3,000 per tonne mark. Although negotiations are ongoing, the
Mongolian Government is considering a proposal allowing them to
exercise an option for of up to 34% ownership in Ivanhoe's copper
project

The list goes on with Chile imposing an additional 5% operating income
tax on copper mines, Zambia considering a windfall profits tax that
would increase mining taxes from 31% to 47% and the Democratic Republic
of Congo "reviewing" and canceling mining contracts. Elsewhere, Romania
has effectively killed any chance of Rosia Montana developing in the
near future, Crystallex is still waiting on a mining permit that has
been imminent for several years and Xstrata's Tampakan mine in the
Philippines is getting attacked by rebels on a regular basis.

The irony of these new taxes and such is that by the time most of the
new deposits the governments are coveting come into production, metal
prices will have probably collapsed and the new government will be
promoting tax breaks just to keep the jobs. They also seem to have
missed the fact that as metal prices have increased, labor, materials
and energy have increased almost in lock-step with the metals. Mine
margins have by and large not increased proportionally with the metal
prices.

End reprint.

Brent can be contacted at brentcook@cox.net

Best regards.
Glen

Glen H. McKay, President & CEO
Cornerstone Capital Resources Inc.
Excellence in Mineral Exploration
"People, Process, Projects"
TSXV - "CGP" / OTC - "CTNXF"
F - "GWN" / B - "GWN"
Email: mckay@crigold.com
Skype: glenmckay
www.cornerstoneresources.com
Toll Free 1-877-277-8377
Fax 1-709-747-1183

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Copyright (c) 2008 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 Mon Mar 10, 2008 at 5:00:00 AM Pacific Time
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