CEO Letter to Shareholders

Dear Shareholder;

Since my last letter to you on January 25th, 2011 there have been a
number of developments in your company which I wish to comment on.

New President
On February 24th we announced that H. Brooke Macdonald, a Director of
Cornerstone since 2009, had been appointed President, replacing yours
truly in that role. Having Brooke, a respected and seasoned industry
professional, as President is an important step for the Company for the
next stage of its development. He brings the experience, knowledge and
skills necessary to ensure that we realize the potential of our current
broad portfolio of projects and take full advantage of new
opportunities. As we enlarge our portfolio of projects in Ecuador and
expand into other jurisdictions in Latin America, Brooke's intimate
knowledge of the region and his fluency in Spanish are critically
needed assets at this time. I am very pleased that Brooke is joining
our senior management team at this important juncture.

Cash Position and Partner Funding of Key Projects
We continue to be focused on generating new projects that have great
potential for discovery and we are committed to realize significant
returns for our shareholders. Cornerstone leverages its own exploration
funding through joint venture and strategic partnerships, providing
shareholders with potential for success at lower risk and less
dilution. We have great confidence in our projects and we look forward
to advancing them to create significant value for investors who have
patiently supported the Company.

Cornerstone is well funded and commitments from our JV partners
constitute significant validation of the strength of Cornerstone's
projects. 50% of work on the Little Deer copper project in Newfoundland
is funded by partner Thundermin Resources. 100% of the funding for our
other flagship property, Shyri in Ecuador (including the current drill
program at the Gama target), is being provided by partner Intrepid
Mines, which is committed to spending at least $1 million on the
property in 2011. Great Western Minerals is funding 100% percent of the
work on the Company's Chaleur rare earth elements (REE) property in New
Brunswick (see news release dated March 1, 2011). 100% of work on our
Macara property in southern Ecuador is being funded by Newmont Ventures
Limited, a subsidiary of Newmont Mining Corporation (see news release
dated March 30, 2010). 100% of work on our Letitia Lake REE property in
central Labrador is being funded by Rare Earth Metals Inc. to earn a
51% interest in the property (see news release dated February 16,
2010), and 100% of work on our Red Cliff copper property on the east
coast of Newfoundland is being funded by Vale Exploration Canada Inc.
to earn a 60% interest (see news release dated May 4, 2010).

Cornerstone currently has approximately $2.2 million in the bank. On or
before April 21st, we expect to add approximately $700,000 to our
treasury from the exercise of warrants at an exercise price of $0.25.
The warrants were issued in connection with a private placement
announced on November 12, 2009; they were called by the Company on
March 14th and will expire if not exercised by April 21st. On March
24th we expect to be able to call another 4,687,500 warrants, at an
exercise price of $0.20, thereby causing them to expire if not
exercised within 30 days of the date they are called. These latter
warrants were issued in connection with a private placement announced
on November 22, 2010, and if exercised would add another $937,500 to
our treasury. Cornerstone also owns marketable securities with an
approximate value of $550,000, which could be converted to cash if
necessary.

In short, we believe that Cornerstone has sufficient cash on hand to
meet all its commitments and to advance its strategic objectives well
into 2012. Proceeds from the exercise of all outstanding warrants and
liquidation of the marketable securities, with current cash on hand,
gives Cornerstone potential total cash resources of approximately $4.3
million.

Little Deer Copper
On January 27th we announced that drilling had recommenced on the
Little Deer copper deposit with two drill rigs. The primary purpose of
the current drill program is to increase the estimated mineral
resources outlined to date in the deposit to the five to six million
tonne range. While we are confident that is an achievable goal, I must
note that the potential increase to the Little Deer mineral resource is
conceptual in nature and it is uncertain whether further exploration
will result in an expansion of the resource as currently defined.

Cornerstone and our joint venture partner Thundermin Resources must
decide prior to July 12, 2011 whether to exercise the option to acquire
a part of the property that is subject to an underlying agreement with
a third party. If we elect to exercise, we must make a payment to the
third party which is based on a formula but which we currently estimate
to be approximately $1.5 million, 50% or an estimated $750,000 of which
must be paid by Cornerstone.   At Cornerstone's election the payment
may be in cash or Cornerstone shares.

Ecuador
We are confident that it will become increasingly apparent that Ecuador
welcomes environmentally friendly, socially responsible, sustainable
mining development and we are positioning Cornerstone to be a major
player in this underexplored land of fabulous mineral potential.

We expect that Ecuador will very shortly achieve an important milestone
in implementing its new mineral exploration and development regime,
with the signing of the first mineral exploitation contracts governing
advanced projects. On March 5th a report at
http://www.miningweekly.com/article/ecuador-expects-to-sign-first-two-contracts-by-april-minister-2011-03-05 stated that the government of
Ecuador expects to have the first mineral exploitation contracts signed
in the coming months with foreign firms wanting to develop identified
mineral deposits in the country. The Minister for Nonrenewable
Resources, Wilson Pastor, was quoted as saying: "By April we believe we
will have signed at least two mineral exploitation contracts, and by
June, we will have the third strategic project signed. There are two
more deals for advanced exploration that will be sealed next year." The
new contracts will include details of royalties to be paid to the
government.

Ecuador passed a new mining law in January 2009, replacing a mandate
that had ordered a suspension of all mining and exploration work in the
country almost a year earlier.  The provisions of the new law are now
being fully implemented, thereby enabling Cornerstone and other
companies to recommence exploration and development activity.

At the PDAC on March 8th the Ecuadorian delegation, headed by newly
appointed Vice Minister of Mines, Federico Auqilla, mentioned
Cornerstone as one of the exploration companies filling the pipeline
with the second generation of projects for the country, and said they
expected to have the first two mineral exploitation contracts signed by
April 15th. The Vice Minister, a mining engineer from the city of
Cuenca who is known as a long time supporter of foreign investment,
delivered a message from President Rafael Correa that Ecuador is
committed to developing a world-class mining sector and realizes it
needs foreign investment to do this.

Coincidentally also on March 8th, we announced that drilling had
started on our highly prospective Gama prospect on the Shyri property.
As I write this letter the drilling is ongoing and we await the first
results from the drilling.

During 2006/07 there was heightened anticipation about our Shyri
property. Several mining analysts and letter writers who had visited it
were of the opinion that all three prospects on the Shyri property -
Gama, Vetas Grandes and Ca�aribamba - were high priority targets. Work
completed on those prospects up until the imposition of the Mining
Moratorium further supported that conclusion.

Based on the geological potential of the Shyri project alone, many
analysts and letter writers were recommending CGP before the
moratorium. CGP traded as high as $0.89 at that time. One should keep
in mind that the price of gold in 2007 was less than 50% of what it is
today. Also your company has many more high potential properties than
it did in 2007.  In the months ahead, in addition to drilling Gama, we
will be working to advance the Vetas Grandes and Ca�aribamba prospects
to the drill ready stage.

We recently expanded our activities in Ecuador with our February 17th
announcement that we had acquired 100% of the shares of Santa Barbara
Copper and Gold S.A. ("SBCG"), thereby acquiring the La Encrucijada and
Cascabel properties. We will attempt to advance both properties to the
drill ready stage this year. Prior to beginning work on La Encrucijada,
we will need to carry out consultations with the local community, which
could delay the commencement of work on that property.

Chile
On February 22nd we announced that we had signed an agreement to
explore the Miocene gold-silver-copper project located in the Regions
of Atacama and Antofagasta of northern Chile.

On March 15th we announced that we had signed an agreement to acquire
the La Fortuna copper-silver-gold project located in the Valpara�so
Region of central Chile.

These two projects were selected after two years of careful research by
our experienced geological team. We plan to advance these two
properties to the drill ready stage by the end of the first quarter of
2012.

Rare Earth Element Properties
On March 1st we announced that we had signed a formal option agreement
granting Great Western Minerals Group Ltd (TSXV-GWG) the right to earn
a 51% interest in Cornerstone's Chaleur rare earth element (REE)
property in northern New Brunswick.

On March 8th we announced that Rare Earth Metals Inc. (TSXV-RA) had
elected to enter the second year of the option agreement respecting our
Letitia Lake rare earth element (REE) properties in central Labrador.

Those two projects give your company exposure to a group of commodities
that is receiving a lot of attention these days. To read a commentary
on the importance of rare earth elements go to link
http://financialedge.investopedia.com/financial-edge/0211/China-Dominates-Rare-Earth-Metals-Market.aspx

El Strato Gold
On February 1st we announced a decision to defer the planned winter
diamond drilling program on the El Strato gold property in
north-central Newfoundland until this coming summer. Unseasonably mild
temperatures this winter have resulted in a lack of suitable lake ice
thickness and ground freeze-up conditions, thus making access
difficult. Cornerstone will commence the drilling program in early
summer as soon as ground conditions are suitable.

To keep updated on news from Cornerstone please ensure that you are
subscribed to our email alerts by updating your profile at
http://www.cornerstoneresources.com/s/SendMessage.asp. We also
encourage you to take the time to familiarize yourself with our other
projects and our people by visiting our website.

The direct link to a recent CEO video interview is:
http://www.cornerstoneresources.com/i/media/SHCornerstone.asx

The link to recent CEO audio interviews is:
http://www.cornerstoneresources.com/s/Interviews.asp

The link to a recently updated Corporate presentation with narration is:
http://rblcommunications.com/webcasts/Cornerstone/CGPmarch2011/CGPmarch2011.html

For investor, corporate or media inquiries, please contact:

Investor Relations:
Email: communications@crigold.com
North America toll-free: 1 (877) 277-8377
Martti Kangas - Direct Line: 1 (647) 521-9261
Paul Benwell / Pat Kairns - Direct Line: 1 (514) 904-1333

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

Best regards.
Glen
 
Glen H. McKay
Executive Vice -- Chairman & CEO
Cornerstone Capital Resources Inc.
Excellence in Mineral Exploration
"People, Process, Projects"
TSXV - "CGP" / OTC - "CTNXF"
F - "GWN" / B - "GWN"
Email: ghmckay@crigold.com
Skype: glenmckay
www.cornerstoneresources.com
Toll Free 1-877-277-8377