Cornerstone Cap Resources Inc (fka CTNXF)

[warant]

Update from CGP May 25/11
Brooke

26 Kyle Avenue
Mount Pearl, NL, A1N 4R5
Toll Free: 1-877-277-8377
1-709-745-8377
Email: [e-mail]
Website: www.cornerstoneresources.com
TSXV – “CGP”; F – “GWN”; B – “GWN”; OTC - “CTNXF”
May 25, 2011
EXPLORATION UPDATE
Dear Shareholder,
This letter will provide you with an update on some of our exploration projects in Ecuador, Chile and
Canada since our last letter on April 14th. Maps corresponding to these projects can be found at
http://www.cornerstoneresources.com.
ECUADOR
Shyri project – Phase 1 drilling at the Gama Prospect: To date, 6 holes of the planned 11 hole
(2,900 metres) drill program have been completed for a total of 1500 metres, and the rig is currently
being moved to drill site #7. These first holes were testing porphyry Cu-Mo-Au targets located in areas C,
D, E & F, in the Central and Southern part of the prospect area. The next holes will test stratabound or
stratigraphic-controlled disseminated high-sulphidation epithermal mineralization beneath and in the
vicinity of the La Ermita breccia. The target for holes #7 and #8 is a buried Quimsacocha deposit
analogue located beneath the plateau. We now estimate that Phase 1 drilling will be completed by the
end of June. Following receipt of additional assay results and their analysis and consultation with our
partner Intrepid Mines Limited, we expect to be in a position to issue a news release summarizing the
results of the first 5 holes of the program by May 31st or during the first week of June.
Shyri project – Vetas Grandes Prospect: This prospect is the next in line to be drill tested.
Preliminary meetings were held with local communities and authorities to inform them of our planned
activities and socio-environmental processes before initiating the required fieldwork necessary to
complete the Environmental Impact Study (EIS) which is a condition to drilling. We still estimate that
preparation and approval of the EIS will take about 6 months once fieldwork has begun.
Cascabel project: The exploration program on this project, which hosts porphyry and skarn type Cu-Au
mineralization within an extensive zone of highly anomalous gold detected in stream sediments, will begin
in early June.
La Encrucijada project: Exploration on this project, which hosts high sulphidation epithermal Au-Ag
mineralization, will begin in August.
CHILE
La Fortuna project: At La Fortuna we are targeting manto-type copper-silver and epithermal gold-silver
mineralization. As noted in the April 14th letter, the exploration program for this year will include
geological mapping, gridding, rock and soil sampling, ground geophysics (magnetometry and induced
polarization), trenching, data integration & modeling, drill target definition and possibly an initial drilling
program. So far, a 1:25,000 reconnaissance geological mapping and sampling has been completed. Rock
sampling (79 samples) indicates significant results for copper, and in a few cases for silver, lead (1.55%
Pb) and zinc (1.38 and 1.44% Zn), with 30 samples > 0.1% Cu, including 11 samples > 1% Cu, 19
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samples > 10 g/t Ag, including 5 samples > 100 g/t Ag with a maximum of 628 g/t Ag. Quantitative reassaying
for total and leachable copper for over-limit copper results (> 1% Cu) is underway. It is
estimated that most of the copper from these surface samples is leachable as indicated in previous
surveys. Gold anomalous samples (5 > 0.1 g/t Au with a maximum of 0.258 g/t) are usually associated
with anomalous copper-silver or lead-zinc. Most of the anomalous samples are located in the northern
part of the property where field work has been concentrated so far and are distributed over an area of
about 5 km by 3 km. Detailed exploration work over the most prospective areas will start in June as soon
as data are compiled and targets defined.
Miocene project: The Miocene project covers a large area of 14,770 km2 located north and along
trend of the Maricunga magmatic belt and to the north of Kinross’ La Coipa gold-silver mine, where we
are targeting gold, silver and copper mineralization. Concession applications were submitted for a total of
43,500 hectares in the northern part of the Miocene Area of Interest (AOI). So far, eight targets have
been field-evaluated and data are currently being compiled. Following field evaluation, the concession
applications have been reduced to 32,500 hectares. Many third party submittals within the AOI have been
received recently and are being evaluated.
CANADA
Little Deer project: The current $1.6 million diamond drilling program on the Little Deer copper deposit
is nearing completion. The program has utilized two drill rigs, and to date approximately 12,100 m of
drilling has been completed with an additional 500 m of drilling remaining.
As announced on April 26th, Cornerstone and 50% joint venture partner Thundermin Resources Inc.
(“Thundermin”) have retained P&E Mining Consultants Inc. (“P&E”) of Brampton, Ontario to complete an
updated National Instrument 43-101 ("NI 43-101") compliant mineral resource estimate for the Little
Deer deposit once the current drill program has been completed. P&E have also been retained to
complete an internal scoping review for the Little Deer project. This review will evaluate a range of
potential mining and operating scenarios for the project and provide the management of Cornerstone and
Thundermin with preliminary information on the economic viability of developing a new copper mine at
Little Deer.
El Strato project: The planned diamond drilling program on the El Strato gold project in north-central
Newfoundland is scheduled to begin in early June. The program comprises 1,000 m of drilling in
approximately 8 to 10 holes, which will primarily test anomalies generated by work completed in 2010
that included an Induced Polarization (IP) survey, soil geochemistry survey, prospecting and a follow-up
trenching program.
Red Cliff and Deer Harbour projects: Vale Exploration Canada Inc. (“VEC”) has fulfilled all its
obligations in year 1 of the Red Cliff and Deer Harbour option agreement, and the option has now
entered into year 2. In late April, VEC made the requisite $25,000 cash payment to Cornerstone due on
the 1st anniversary date of the agreement and exploration expenditures totaling approximately $380,000
have been filed for the properties. Currently VEC is carrying out a thorough review of the 2010
exploration and diamond drilling results, and 2011 exploration work will depend on conclusions resulting
from that review.
Chaleur project: On May 3rd Great Western Minerals Group Ltd. (“Great Western”) informed
Cornerstone that it was dropping the option on the Chaleur rare earth element (REE) property in northern
New Brunswick. Mobile metal ion (MMI) soil geochemistry surveys carried out during 2010 had identified
several REE anomalies concentrated along the banks and flood plains of streams and brooks. However,
follow-up rock chip sampling of adjacent outcrops did not return significant REE values. As such the MMI
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anomalies remain unsourced, and Great Western considers that they may in fact represent “false”
anomalies. Cornerstone will review Great Western’s report on the 2010 exploration work, which is
expected shortly, and will then determine what further work may be warranted.
Cautionary Notice:
Certain statements contained in this letter to shareholders may be considered as forward-looking. Such forward-looking
statements are subject to risks and uncertainties that could cause actual results to differ materially from estimated or implied
results. While Cornerstone anticipates that subsequent events may cause its views to change, it expressly disclaims any
obligation to update the forward-looking statements contained herein.
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.
For investor, corporate or media inquiries, please contact:
Investor Relations:
Email: [e-mail]
North America toll-free: 1 [phone]
Martti Kangas - Direct Line: 1 [phone]
Paul Benwell / Pat Kairns - Direct Line: 1 [phone]
Sincerely,
Brooke Macdonald
President