Cornerstone Capital Resources – For Tomorrow’s Gold & Copper Needs

We learn how Cornerstone Capital Resources Mineral Exploration Operations are laying the groundwork for the electric vehicle revolution.

Cornerstone Capital Resources is the founding partner of the Cascabel project in Ecuador, the only available Tier 1 copper-gold asset in the world not owned by a global, multi-national mining company.

The “Alpala” deposit on Cascabel hosts a measured and indicated resource of 21 million ounces of gold, 21 billion lbs. of copper, and 92 million ounces of silver, two-thirds of which is in the measured category.

The Cascabel resource has been endorsed by BHP, the largest mining company in the world and owner of 13.6% of SolGold, and Newcrest Mining, the largest gold producer in Australia with a 13.5% share of SolGold (or ~11.5% of Cascabel each), and by Franco Nevada, the royalty company that last year provided SolGold with US$100 million in feasibility study funding in return for a 1% net smelter returns (NSR) royalty on SolGold’s 85% share of the project.

Cornerstone owns a 15% direct interest in Cascabel, carried through to the completion of a bankable feasibility study and repayable at Libor plus 2% out of Cornerstone’s share of earnings or dividends from a mine, as well as owning 6.9% of the shares of its joint-venture partner and operator, SolGold. This places Cornerstone’s ownership at effectively 21% of the resource.

The Golden Hour

It is a time of opportunity for Cornerstone, with the industry just now beginning to realise the company is onto a good thing.

“We are undervalued compared to SolGold, despite sharing the same principal underlying asset, a gap in valuation we believe will close up when we and SolGold are acquired by a major mining company looking for large, long-life copper and gold development projects,” says Brooke Macdonald, CEO and President of Cornerstone Capital Resources.

Indeed, just recently named Cornerstone one of eight companies with properties to watch, thanks to the buzz around the Cascabel resource.

“When built, it will be the largest gold and largest copper mine in Ecuador, and with long term gold and copper prices expected to remain high sooner or later we will be acquired for our 21% interest,” Macdonald tells us.

That prediction is not borne out of optimism alone. As the electric vehicle revolution looms the demand for copper is expected to skyrocket over the coming decade, leading to an ever-greater need for gold and copper development projects.

“The fact that President Joe Biden’s proposed infrastructure plan contemplates building 500,000 charging stations across the U.S. and tax credits for EV buyers tells you that this is real and coming at us fast,” Macdonald says. “Every week it seems I receive another analyst report on the higher long term copper price forecast, the most recent ones dated March 23rd by Morgan Stanley entitled ‘Copper and Renewables – the red metal is key to the green revolution’, and April 13th by Goldman Sachs entitled ‘Green Metals – Copper is the new oil.’”

The outlook for gold is also hopeful.

“With respect to gold, all of the monetary and borrowed fiscal stimulus are an indication that while interest rates may creep upwards a bit if inflation goes above 2% per year in the U.S., rates will stay lower for longer and gold will do well in such an environment,” Macdonald adds.

Back in the Field

The future looks bright, but the truth is the present and recent past could be brighter. While it seems, we are coming out of the other side of the COVID-19 crisis, the journey back to normality is an uphill one.

“We have gotten our geologists back into the field after the initial lockdowns of last year during the COVID pandemic. Other than strict COVID safety protocols things are getting back to normal,” Macdonald tells us. “Because many of our projects are funded by partners, we don’t have to keep issuing shares to fund expensive drilling programs and diluting our shareholders.”

Of course, it helps that Cornerstone was always one of the first to move into the market. Cornerstone has been operating in Ecuador since 2005, longer than almost anyone, and that is reflected in the make-up of Cornerstone’s staff.

“Most of our key technical people have been with us a long time. It is a competitive market for geologists, environmental engineers, technicians, and good community & social responsibility (CSR) professionals due to the demand created by other companies having moved in in the past four years, but we have managed to retain our staff,” Macdonald explains. “We feel we have a first-mover advantage not only in having picked up some of the best early-stage exploration projects in what is considered the last underexplored country in the Andes but also in having hired and retained some of the best people.”

With the best people and a resource with this much potential, there are good times ahead for Cornerstone. A pre-feasibility study (PFS) for Cascabel is expected by the end of 2021. Meanwhile, project operator SolGold is now looking at a slightly smaller, more selective operation that it thinks can be brought into production much faster than the previously envisioned plan, mining 30% less material, while still producing the same amount of copper.

The study will focus on the high-grade core of 359 million tonnes grading 1.47% Copper Equivalent (CuEq) and the higher-grade material mined in the early stages, a lower initial capital expenditure, a re-assessment of the potential for near-surface mining operations at the Alpala deposit, and finally, the drilling of satellite targets including Tandayama America, Aguiñaga, and Moran. The Alpala deposit measures approximately 900m in height and 500m in diameter. Given its size and geometry, SolGold, the project operator, has reported it is optimistic that the PFS will demonstrate that it is amenable to underground caving mining methods.

Cascabel is set to be a landmark achievement for Cornerstone, but it is not their first project in Ecuador. The company has contributed to successful projects at Bramaderos alongside its 87.5% partner Sunstone Metals testing the Au-Ag-Base metals extensive epithermal system at the Espiritu target and testing porphyry Au-Cu mineralization at the Brama target and is continuing to prepare its 100% owned property, the Bella Maria porphyry Au-Cu project for drilling. For four years it has been exploring at its Rio Magdalena porphyry Cu-Au and Espejo porphyry Cu-Mo projects in northern Ecuador alongside the Ecuadorian State Mining Company ENAMI EP and has identified significant Cu-Au targets at a surface that are comparable and even larger in size and higher in intensity than what has been discovered at Cascabel at the same exploration stage back in 2012-2013.

As demand for gold and copper continues to grow to meet the needs of the electric revolution, Cornerstone is right there ready to meet them.

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