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Re: Monday, June 11, 2007
Cornerstone May update - the Drills start turning
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I guess the question that we get asked most often these days is "When
will the drills start turning, especially in Ecuador?" The time lines
vary from project to project but in all cases the answer is the same,
"When all the necessary preparatory work is done to ensure that the
holes are being drilled in the best places according to all the data
we've compiled." After all, this is not only the most expensive part of
the exploration programs but it is often referred to as the truth
machine for good reason. The initial round of drill results is most
often accepted as being indicative of a projects potential. However,
many projects hastily drilled have been abandoned, only to be
successfully re-drilled later by new owners in a more methodical
fashion, often using new ideas. In our view that is reason enough to
try to get it right on the first round. Nevertheless, sometimes when
all such work has been done there are other factors such as equipment
availability, drilling permits and weather that can delay the actual
versus expected start of drilling. The following outlines our general
expectations regarding the drilling timelines for 2007 further to our
Exploration Update of May 7th;

1. Bobby's Pond VMS project which is under JV with Mountain Lake
Resources (MLR) -- a 750 m drill program commenced on May 15th and to
date we have not received any reports from our partner, MLR, who is
operating the project. (Location -- Buchan's Zn-Cu-Pb-Au-Ag Mining
District in Newfoundland)
http://www.cornerstoneresources.com/s/Newfoundland.asp?ReportID=136409

2. Little Deer Copper Deposit which is under JV with Thundermin
Resources -- a 5,000 m drill program is currently being planned and is
expected to commence during Q3. (Location -- Green Bay Cu-Au Mining
District in Newfoundland). We've had many inquiries about the Little
Deer JV (LDJV) with Thundermin. In 1974 the Little Deer Mine is
reported to have produced 2,715 tonnes of concentrate grading 23.48%
copper. The remaining mineral reserves were reported to be (non 43-101
compliant) 210,200 tonnes grading 1.53% copper. The Little Deer Mine
was connected, via underground workings, to the nearby Whalesback Mine,
which was closed due to a structural collapse in the early '70s. From
1965 to 1971, almost 71 million pounds of copper were recovered from
nearly 3.8 million tonnes of ore at the Whalesback Mine. The LDJV
partners feel that the Little Deer deposit has potential to be expanded
and we look forward to the drilling program. (See
http://www.cornerstoneresources.com/s/NewsReleases.asp &
http://www.cornerstoneresources.com/s/Newfoundland.asp?ReportID=183644)


3. Garland Lake Nickel project which is under JV with Celtic Minerals
-- a 750 m (minimum) drill program is currently being planned and is
expected to commence in late Q3 or early Q4. (Location -- Voisey's Bay
Ni-Cu-Co Mining District in Labrador)
http://www.cornerstoneresources.com/s/Labrador.asp?ReportID=136483

4. Shyri Gold project which is under JV with Coastport Capital -- a
15,000 m drill program is currently being planned and will commence
upon receipt of drill permits, now expected to be early Q3. (Location
-- contiguous with Iamgold's Quimsacocha gold project in Ecuador, which
hosts 3.4 million oz. gold)
http://www.cornerstoneresources.com/s/Ecuador.asp?ReportID=136203

5. La Plata VMS project which is under JV with Coastport Capital -- a
field program designed to further assess several untested coincident
geophysical and geochemical anomalies will be conducted during the
summer of 2007. Thereafter, the timing of the resumption of the
remaining 4,585 m from the Phase Two 8,000 m program will be subject to
equipment availability. (Location -- Macuchi Zn-Cu-Pb-Au-Ag Mining
District in Ecuador)
http://www.cornerstoneresources.com/s/Ecuador.asp?ReportID=136199

Based on the forgoing we have in excess of 26,000 m (85,300 feet) of
drilling "on the books" at the moment. There is potential for that
number to increase.

In our May 7th release we noted with regard to the Aillik Uranium
project which is under JV with Cash Minerals and will be the subject of
an airborne radiometric survey during Q3 - "Any anomalies detected by
the survey are expected to be drill tested in 2007", subject to
equipment availability.
http://www.cornerstoneresources.com/s/Labrador.asp?ReportID=160699

Also in our May 7th release we noted with regard to the Long Lake
project which is under JV with Cogitore -- "The (2006) drilling
returned broad intersections of altered and mineralized felsic
volcanics including several narrow sulphide stringers that gave assays
up to 3.2% Zn over 0.2 m. The partners are planning to conduct a
down-hole EM survey, subject to equipment availability." Further
drilling will be determined by the results of that survey.
http://www.cornerstoneresources.com/s/Newfoundland.asp?ReportID=136422

It is well known that Cornerstone subscribes to the Joint Venture (JV)
Business Model, classified as a prospect generator, and as such we are
focused on generating and / or acquiring projects of merit that we feel
have the potential to (1) add shareholder value, and (2) attract the
interest of a JV partner to fund further work that is necessary to
advance the project(s). 2006 and this year have been particularly busy
in that regard and we are at various stages of discussions with several
potential new partners on several projects. There is one such project
that has the potential to be drilled this year if such discussions
successfully result in a new JV agreement.

URANIUM:

Newfoundland and Labrador: One other thing to watch for will be the
results from the airborne radiometric survey that Cornerstone is
funding on the Deer Lake Uranium project, as noted in the May 7th
release. Usually we look for a partner to incur such an expense but in
this case the consensus between the geological staff and management is
that it is the right thing for Cornerstone to do at this time. Also,
there are cost savings to be achieved by coordinating the timing with
the Aillik airborne radiometric survey using the same contractor.
http://www.cornerstoneresources.com/s/Newfoundland.asp?ReportID=168321

New Brunswick: Another interesting development is that on June 6th the
Natural Resources Minister, Donald Arseneault, announced an agreement
between CVRD Inco Ltd. and the provincial government to search for
uranium in southwestern New Brunswick
http://www.canadaeast.com/ce2/docroot/article.php?articleID=7528. As
announced on April 10th Cornerstone had earlier staked a block of 102
claims (16.3 sq km) over an airborne radiometric anomaly on the
Proterozoic-Carboniferous unconformity in southern New Brunswick, and
subsequently added to that another 110 claims. The Cornerstone claim
block covers the southern 9 km portion of a 40 km long radioactive
trend along the unconformity. CVRD-Inco has recently staked a 19 km
portion along the trend, and Landmark Minerals a 12 km long adjacent
section. Cornerstone holds the Uranium rights to 151 claims of the
total172 claims at Dorchester and all but 10 claims on the 212 claims
at Elgin. The geology underlying our claims there is the same as that
which underlies the CVRD-Inco and Landmark claims. For more information
go to
http://www.cornerstoneresources.com/s/Newbrunswick.asp?ReportID=171723

WHAT ABOUT ECUADOR?

To answer that question we can do no better than summarize, with
permission, a recent comment by the Casey Group in The Room, the
subscriber's only home page for Casey Research at
http://www.caseyresearch.com/room.php

"Casey opined that the political risk discount being given to Ecuador
plays looks overblown to them". To read the full comment we refer you
to the Casey website http://www.caseyresearch.com/

A few weeks ago, a press report had it that Ecuador was going to slap a
lethal tax on foreign mining companies. We held to the view of Michael
Gray, a mining analyst at Pacific International Securities in
Vancouver, British Columbia, who was reported in the Financial Post on
May 25th as downplaying the report, noting that it contradicts the
signals coming from the Ecuador government and mining associations
"lobbying for a positive mining industry in Ecuador."

"This is a little bit out of left field. It does not add up, so
therefore I am advising clients accordingly," Gray said.

Gray was right as that story has now been discredited. It was totally
contrary to the government's earlier statements that confirmed its
desire to build a mining industry in Ecuador and create a stable
environment for foreign investment.

Indications of this are reflected in various news items such as,
http://english.eluniversal.com/2007/06/05/en_pol_art_ecuador-fm-keeps-dis_05A880221.shtml which links to an interesting article entitled
ECUADOR FOREIGN MINISTER KEEPS DISTANCE FROM VENEZUELA and
http://www.plenglish.com/article.asp?ID=%7BEB1FBA93-6BED-45E2-BDCA-BEF3EC1DF1E6%7D&language=EN which links to an interesting article entitled
ECUADOR FOREIGN MINISTER VISITS USA

GAMA GEOPHYSICS -- SHYRI PROJECT, ECUADOR -- announced June 7th

We've had a few ask, "What does this news release mean?" Along with the
chip and channel sampling, soil sampling and supportive reports by
various independent consultants, the results of the geophysical survey
so far supports the geological model we've been using to guide our
exploration efforts. Collectively all the work leads us to an
interpretation of mineralization at depth below the plateau. This view
is also supported by the Ermitas breccia, a late hydrothermal breccia
located on the plateau east of the Boquer�n zone, that contains
abundant silicic fragments, locally with pyrite-enargite
mineralization. As previously reported, an individual mineralized clast
from the breccia returned a grade of 3.0 g/t Au and the breccia matrix
returned a grade of 5.7 g/t Au, providing indirect evidence that the
breccia has sampled and carried gold mineralization hosted in a silicic
zone at depth. These grades indicate potential for discovery of a
buried, gold-mineralized, sulphide-bearing silicic zone(s) associated
with the broader alteration below the plateau, typical of high
sulphidation deposits, including Quimsacocha.
http://www.cornerstoneresources.com/s/NewsReleases.asp

OTHER:

Cornerstone has also initiated work programs on several 100% wholly
owned properties aimed at advancing the properties to the joint venture
stage. Included is work on:

.. The Caymatan Gold-Silver and Rinconada Gold Projects in Ecuador.
.. The recently announced Elgin Uranium-Copper Project in New Brunswick.
.. The Burin Gold Project on the island of Newfoundland. Cornerstone is
earning a 100% interest in the claims optioned from a local prospector
and has a 100% ownership of the claims recently staked.
.. The Codroy Project, also in Newfoundland and underlain by similar
geology to the Deer Lake project, is being evaluated for its uranium
potential.

For further information on these and other Cornerstone projects please
visit http://www.cornerstoneresources.com/s/Projects.asp.

All in all, a very busy field season ahead and there should be a fairly
consistent news flow as the year progresses.

MARKET AWARENESS:

We were quite pleased with the references and recommendations made
about Cornerstone by several letterwriters during the month of May.

1. On May 15th Jay Taylor, writing in the J. Taylor's Gold & Technology
Stocks described Cornerstone as "Undervalued" and suggested a BUY up to
$0.78. For more information on Jay Taylor go to
http://www.miningstocks.com/.

2. On May 18th John Kaiser, writing in the Kaiser Bottom Fish Report -
Express 2007-02 asked the question, "Can betting on both the Coastport
hare and the Cornerstone tortoise be smart?" and answered it with a
Yes. After June 15 the article will be unrestricted for general
viewing. For more information on John Kaiser go to
http://www.kaiserbottomfish.com/s/Home.asp.

3. On May 22nd Matt Badiali, writing in the S&A Gold Report Update
issued his Top Ten Prospect Generator picks in the junior mineral
exploration sector. Cornerstone was among that group who were invited
to make a presentation to Matt and his clients at the 5th Annual True
Wealth Gold & Commodities Conference in Long Beach, CA on May 30th. For
more information on Matt Badiali go to http://www.dailywealth.com/ or
http://www.stansberryresearch.com/. To view the Power Point
presentation made there go to
http://www.cornerstoneresources.com/s/Presentations.asp. To view an
interesting article on prospect generators, authored by Matthew
Badiali, go to
http://www.growthstockwire.com/archive/2007/jun/2007_jun_01.asp. Matt
has selected Cornerstone as one of his top ten picks in the prospect
generator group.

4. In his May 29th issue of Resource Opportunities Lawerence Roulston
provided a brief update to his readers about Cornerstone's work program
for 2007. For more information on Lawerence Roulston go to
http://www.resourceopportunities.com/s/Home.asp.

5. On May 31st in Chicago at the Doug Casey Gold & Silver Summit, Louie
Janes, senior research analyst with the Doug Casey Group, gave
Cornerstone (as what was described to me by one attendee) a phenomenal
recommendation on the Top micro cap pick panel. For more information on
the Casey Group go to http://www.caseyresearch.com/.

6. On June 4th Graeme Irvine, writing in his Global Profiles LLC,
featured Cornerstone for the third time in the past year. For more
information on Graeme Irvine go to http://www.globalprofiles.net.

*Note -- all references are reprinted with permission.

The week of June 17th we'll be attending the World Gold, PGM and
Diamond Investment Conference in Vancouver and holding several meetings
with institutional and other investors. For those of you who may plan
to attend we look forward to seeing you there.

For those who like to keep updated on trading statistics for the five
month period January through May 2007 a total of 16,394,519 Cornerstone
shares traded at an average price of $0.71. During the same five month
period in 2006, Cornerstone shares traded at an average price of $0.62.

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

Best regards.
Glen

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Copyright (c) 2007 CORNERSTONE CAPITAL RESOURCES INC. (CGP) All rights
reserved. For more information visit our website at
http://www.cornerstoneresources.com/ or send
mailto:info@cornerstoneresources.com
Message sent on Mon Jun 11, 2007 at 5:30:00 AM Pacific Time
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