Re: Wednesday, October 17, 2007
Cornerstone - La Plata Update
Dear Shareholder or Subscriber;
You may be aware that Coastport has advised
Cornerstone that it will
not exercise its option to continue to earn in on the La Plata gold
rich polymetallic VMS project in Ecuador. See
We are pleased that Coastport has decided to focus
resources on its earn in and the further exploration of Cornerstone's
high sulphidation epithermal gold Gama target which
is part of our
Shyri project in Ecuador. The Gama target is near
During 2005 Cornerstone 'brokered' an earn-in deal on the La Plata
project for Coastport. In exchange for doing so Cornerstone would have
received 10% of Coastport's fully diluted shares and a 2% NSR upon full
earn in by Coastport.
Since then Coastport has met all of Cornerstone's obligations under the
agreement, including spending US$3M on exploration. Cornerstone also
holds about 750,000 Coastport shares which it acquired under the
Having now met the exploration expenditure requirement and by
completing the payment of $125,000 and issuing Cornerstone shares equal
to a value of $125,000 before December 31, 2007, Cornerstone may earn
a 51% interest in the La Plata
project if it so elects. In effect
Cornerstone may earn a controlling interest in what we feel is a highly
prospective project at very little cost. This is a great endorsement of
the JV business model which Cornerstone follows. It mitigates the
downside risks and provides much upside potential.
There is little doubt that the Phase I and Phase II drilling programs,
which were funded by Coastport, have enhanced our understanding of this
project. It probably too has added to any future resource calculation
for the La Mina
deposit (840,459 tons grading 4.8 g/t Au, 54.4 g/t Ag,
4.1% Zn, 4.2% Cu and 0.7% Pb; Historical Resource Estimate, Cambior,
1998 ). A highlight of the Phase I drilling program was a intersection
assaying up to 31.73 g/t Au, 289.39 g/t Ag, 18.16% Zn, 5.86% Cu and
1.61% Pb over 8.9 m
from drillhole LP-06-01.
Based on the recent field program undertaken by Bruce Mitton, PGeo,
Exploration Manager, Canada (our resident VMS expert) and the review by
renowned VMS consultant Dr. Jim Franklin, PGeo, who collectively have a
very positive view of La
Plata's potential, we will be seeking Board
approval to complete the earn in to 51% on La Plata.
I am asking our geological department to commence planning of a 4,585
metre Phase III drill program to follow up the recommendations of Mr.
Mitton and Mr. Franklin. You may recall that we drilled only 3,415
metres of an approved 8,000
metre Phase II program, for which the drill
permit is still valid.
We are also considering our funding options for the Phase III programs.
Although we could fund it ourselves the greater probability is that we
will make another earn in arrangement with a third party. Our VP
Exploration is already entertaining expressions of interest in this
Whatever happens, it is a fairly good bet that if La Plata
operating mine, Cornerstone and its shareholders will own a much larger
share than was possible under the previous arrangement with Coastport,
and with that in mind Cornerstone shareholders should not be
discouraged by this recent development.
Copyright (c) 2007 CORNERSTONE CAPITAL RESOURCES INC. (CGP) All rights
reserved. For more information visit our website at
http://www.cornerstoneresources.com/ or send
Message sent on Wed Oct 17, 2007 at 5:30:00 AM Pacific Time