Feb 18 2011
Cornerstone Capital Resources Inc. (TSX VENTURE:CGP) (FRANKFURT:GWN) (BERLIN:GWN) (PINK SHEETS:CTNXF) announces it has signed a binding letter of intent to acquire 100% of the shares of Santa Barbara Copper and Gold S.A., a wholly-owned Ecuadorian subsidiary of Santa Barbara Resources Limited (TSXV-SBL).
A definitive agreement is expected to be signed by March 15, 2011 following a period of due diligence. The key assets of SBCG are the La Encrucijada and Cascabel projects.
LA ENCRUCIJADA PROJECT
The La Encrucijada project is located in Loja province in southern Ecuador, approximately 70 km south of the city of Cuenca and midway between Cornerstone's Shyri and Caña Brava properties. The property lies within a northeast trending belt which hosts high-sulphidation epithermal gold-silver systems and associated porphyry systems at depth. It is underlain by flat-lying Tertiary intermediate to felsic volcanic rocks which are locally intruded by diorite plugs. Extensive areas of felsic hydrothermal breccias have been mapped in the central part of the property, and porphyry-style potassic alteration underlies silica-alunite advanced argillic alteration. Anomalous gold (>0.1 g/t Au) and silver (>10 g/t Ag) is widespread throughout the area. Higher grade gold (7 samples >1 g/t Au, up to 5.23 g/t Au) and silver (18 samples >30 g/t Ag, up to 1,110 g/t Ag) is commonly associated with silica alteration and veins, as well as breccias and structures (faults and mylonite zones). Very little work has been carried out on the property. Channel sampling of rock outcrops by SBCG along the Alumbre River, 2 km to the north, returned 110 m averaging 0.67 g/t Au and 1.7 g/t Ag, including a higher grade 45 m-wide section averaging 0.95 g/t Au and 2.4 g/t Ag. A limited soil geochemistry survey (531 samples) has been carried out in the central part of the property. Results define a northwest-striking gold and silver soil anomaly which is more than 1 km in length, and is open to the southeast.
Three concessions (31.25 km2) located in the central part of the property are optioned from a 3rd party, with SBCG holding the right to earn a 100% interest in return for cash payments of $60,000 per year beginning in year 4 and a final payment of $400,000 to exercise the option. The option agreement had been in effect for 18 months when exploration work was suspended by the Mining Mandate. SBCG owns a 100% interest in two additional concessions covering 49.6 km2 which surround and are contiguous with these optioned concessions.
CASCABEL PROJECT
The Cascabel project is located in the Imbabura province in northern Ecuador, approximately 120 km north of Quito. The property comprises a single 50 km2 concession which is 100% owned by SBCG. The area is underlain by Cretaceous – Tertiary volcanic and sedimentary rocks which are intruded by a granodioritic stock. Very limited field work has been carried out by SBCG. Historic exploration includes stream sediment geochemistry surveys comprising approximately 340 samples which were collected in and around the property. A well defined multi-element (gold-copper-lead-zinc) anomaly measuring approximately 10 km2 has been identified with associated large areas of silica-sericite-pyrite-clay alteration. Several secondary stream sediment anomalies have also been identified within the property limits. Historic stream sediment samples have returned assay results ranging from trace up to 3.36 g/t Au and 456 ppm Cu. Rock grab samples of floats and outcrops collected by previous owners have returned assay results ranging from trace up to 1.03 g/t Au, 4.4 g/t Ag, 1.90% Cu and 0.71% Zn. Coarse free gold occurs in most streams throughout the property. Recent rock sampling (14 samples) by SBCG returned anomalous gold (5 samples > 0.1 g/t Au, up to 1.8 g/t Au), silver (2 samples > 15 g/t Ag, up to 80.7 g/t Ag), copper (12 samples > 130 ppm Cu, up to 0.21% Cu) and zinc (8 samples > 130 ppm Zn, up to 1.0% Zn). SBCG considers the area to be prospective for both porphyry and skarn-style mineralization.
The La Encrucijada and Cascabel properties are not located in environmentally sensitive areas, and delays are not anticipated in acquiring permits to resume exploration. Preliminary Environmental Impact Studies ("PEIS") have been approved for both projects, Environmental Audits ("AA") have been socialized and internally approved at the Ministry of Environment ("ME"), and Environmental Licenses ("EL") should be granted in the near future.
"We are very pleased to announce the acquisition of SBCG and the Encrucijada and Cascabel projects", said Glen H. McKay, Cornerstone's President & CEO. "It is our intention to acquire additional projects in Ecuador, a country that offers tremendous exploration potential. The Encrucijada and Cascabel projects are the type of early-stage projects that fit well with Cornerstone's business model of prospect generator, and we're excited about initiating additional work programs in this under-explored area. Our immediate goal is to advance the projects to the drill-ready stage for potential joint venture participation."
Cornerstone will acquire a 100% interest in SBCG and all its assets for a cash payment of $20,000 and a 2% Net Smelter Return ("NSR") royalty on any future mineral production on each property. Cornerstone retains the right to purchase one-half (1%) of the NSR for $1,000,000 within 3 months following completion of a feasibility study, and the remaining one-half (1%) NSR for $3,000,000 within 3 months following a production decision.
Yvan Crepeau, MBa., P.Geo, President of Cornerstone Ecuador S.A. ("CESA") and a qualified person in accordance with National Instrument 43-101, has reviewed and approved the technical information contained in this new release.
Other News
As previously announced, during the past two years CESA's team has been actively examining exploration opportunities in other mining friendly South American jurisdictions. Currently we have reached agreement on one such opportunity and full details of the earn-in agreement will be announced in the near future. We have signed a letter of intent on another and expect to sign a definitive agreement on it shortly.
Cornerstone is pleased to report that it has received $1,700,000 cash to date from warrant exercises as a result of the Company's notice to warrant holders earlier in January 2011. The final date for exercise of these warrants is March 7, 2011. If the remaining warrants are exercised the Company will receive a further $100,000.
Source: Cornerstone Capital Resources Inc.