MOUNT PEARL, NEWFOUNDLAND AND LABRADOR--(Marketwire - Oct. 29, 2009) - Cornerstone Capital Resources Inc. (TSX VENTURE:CGP) (FRANKFURT:GWN) (BERLIN:GWN) (PINK SHEETS:CTNXF) and Intrepid Mines Ltd. (TSX:IAU) (ASX:IAU) announce that they have signed a binding letter of intent (LOI) outlining the terms of an option/joint venture arrangement for Cornerstone's Shyri property in southern Ecuador. Under the terms of the LOI, Intrepid has the ability to earn an initial 60% interest in the Shyri property by making an initial cash payment of $US 250,000 and a $US 500,000 private placement in Cornerstone shares based on the TSX-V weighted average market price over the previous five business days, plus 20%. Intrepid has also committed to spending $US 6.0 million dollars over 5 years, including a firm commitment of $US 1.0 million in the first year.
Intrepid will have the further right to earn an additional 20% interest in a specific area of the Shyri property of up to 5000 ha defined as a Project Area. Upon designation of a Project Area, Intrepid will make a $US 750,000 private placement in Cornerstone. To earn the additional interest, Intrepid will complete a bankable feasibility study or incur expenditures of $US 20 million, whichever comes first, and make a cash payment to Cornerstone of up to $US 5.0 million based on the gold equivalent ounces in the mineral reserve. There is no limit to the number of Project Areas Intrepid may designate within the property and each 'stand-alone' Project Area requires the same earn-in requirements.
During the earn-in period Cornerstone will serve as Project Manager for the exploration programs under the technical direction of Intrepid as Operator. Cornerstone will provide administrative and technical services using its Ecuadorian-based staff for which it will charge a 10% administrative fee.
"We are very pleased to have Intrepid as a partner on the Shyri project," said Colin McKenzie, Cornerstone's President & CEO. "They bring a wealth of knowledge and skill in working in similar geological environments from their successful Tujuh Bukit project in Indonesia. This transaction validates Cornerstone's strategic decision to maintain its assets and relationships in Ecuador, one of the world's most significant and underdeveloped mineral districts. With the renewed commitment by the Ecuadorian government to facilitate the development of the mining sector in the country, we are confident that we will be able to demonstrate that our projects have significant economic value."
Cornerstone and Intrepid are preparing the final terms and conditions of the earn-in and joint venture and expect to conclude a Definitive Agreement within 75 days.
The 300 km2 Shyri property is located in Azuay province, southern Ecuador, about 25 km west of the city of Cuenca. The property encompasses three gold prospects, Gama, Vetas Grandes, and Canaribamba. It is strategically located between the 3.5 million ounce Quimsacocha gold project to the east and the Rio Blanco gold project to the northwest.
The Gama prospect comprises an extensive, sub-horizontal zone of high sulphidation alteration measuring a minimum of 8.5 km by 3 km. The alteration is strongly zoned and centred over two high level, porphyry-type intrusions at the 3500 m to 3800 m elevations, the same elevation as the nearby Quimsacocha deposit. An interpreted post-mineralization auriferous hydrothermal breccias zone, the Ermitas breccias, contains vuggy silica fragments in a sulphide matrix and a broad northwest-trending gold-in-soil anomaly is associated with the alteration zone.
The Vetas Grandes gold mineralization was discovered by Cornerstone in 2005, 20 km south of Gama. The prospect comprises multiple, ENE trending epithermal quartz veins and vein breccias measuring from 1.0 to 7.0 m in width within a zone at least 2 km long and 1.5 km wide. Mineralized veins containing gold and silver are exposed over a vertical relief of 300 m with the highest gold values localized at vein intersections and where veins outcrop around the 3220 m elevation.
The Canaribamba prospect is an intermediate sulphidation, disseminated and vein-type gold system situated in a large, multi-phase diatreme breccia complex. The area has a history of artisanal mining of high grade veins over at least 300 m of elevation and in the 1970's four short drill holes were completed on one of the four recognized vein systems. Work by Cornerstone expanded known gold mineralization another 500 m east with the discovery of the Guabisay structure.
Cornerstone has completed extensive geological, geochemical and geophysical (magnetic and IP) surveys over the prospects and has outlined several high priority drill targets in each area.
The technical content of this news release has been reviewed by Terry Brace, P.Geo, Cornerstone's VP Exploration and a Qualified Person in accordance with NI43-101.
Cornerstone Capital Resources Inc. is a mineral exploration company based in Mount Pearl, Newfoundland and Labrador, Canada, with a diversified portfolio of projects in Canada and Ecuador and a strong technical team that has proven its ability to identify, acquire and advance properties of merit. The company's business model is based on generating exploration projects whose subsequent development is funded primarily through joint venture partnerships.
Certain statements contained in this press release 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.
On Behalf of the Board,
Colin B. McKenzie, President & CEONeither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.