11-10 - Cornerstone signs option agreement with Great Western Minerals Group Ltd on Chaleur REE property in northern New Brunswick
Under the option agreement the size of the subject property has increased from 200 mineral claims (the letter agreement) to 380 claims and, as a result, the underlying payment and work commitments have been revised. Great Western fulfilled its initial commitments under the letter agreement by issuing to Cornerstone 25,000 GWN shares and expending a minimum of $50,000 on exploration. Upon execution of the option agreement, Great Western made a cash payment to Cornerstone of $35,000 and will issue an additional 65,000 GWN shares following receipt of regulatory approval. Great Western may elect to make further payments of cash and shares totaling $75,000 and 340,000 respectively during the next three years and incur additional exploration expenditures totaling $1,350,000. The parties will then form a joint venture to further explore and develop mineral resources on the property. Great Western is operating the exploration programs during the option period in conjunction with their on-going Benjamin River REE project located adjacent to the Chaleur property.
"This option agreement validates Cornerstone's prospect generation business model," said Brooke Macdonald, President, Cornerstone Capital Resources Inc. "Our shareholders will benefit not only from the infusion of cash and shares from Great Western but also from their funding of a significant exploration program that is likely to greatly enhance the value of the Chaleur property."
The Chaleur property is underlain by the Siluro-Devonian Chaleurs Group, which comprises bimodal felsic and mafic volcanic rocks with minor intercalated sedimentary units. Locally these rocks are intruded by small bodies of Silurian or Devonian granites. In the district, a number of copper-iron skarn prospects are known in the metamorphic aureole of these intrusions. Great Western has been exploring its Benjamin River project immediately to the north where a number of heavy rare earth element enriched, apatite-diopside-magnetite dykes occur adjacent to one such intrusion.
2010 Exploration Program and Results
During 2010 Great Western completed exploration programs on two separate project areas on the Chaleur property: i) Claim Group 5323 (200 claims); and ii) Claim Group 5720 (180 claims). Exploration work included reconnaissance geological mapping, prospecting, mobile metal ion (MMI) soil geochemistry surveys and follow up bedrock chip sampling.
The MMI soil samples were collected at a grid spacing of 50 m x 100 m, and focused on areas where previous work by Cornerstone had identified anomalous REE concentrations in outcrop and stream sediment samples. A total of 819 MMI soil samples were collected over the east-central portion of Claim Group 5323, and 564 samples were collected over the southern portion of Claim Group 5720. With the exception of several isolated anomalies, the majority of MMI REE anomalies are concentrated along the banks and flood plains of streams and brooks. On Claim Group 5720, rock chip sampling of rhyolite outcrops exposed along the banks of two streams immediately above the MMI soil anomalies did not return significant REE values. Planned exploration work during 2011 will focus on identifying the source of the MMI soil anomalies utilizing more detailed geochemistry surveys, geological mapping and prospecting.
All MMI soil samples were prepared and analysed at SGS Minerals Services (SGS) in Toronto, ON utilizing the MMI-M package. Rock chip samples were prepared and analyzed for REE and whole rock by lithium metaborate fusion and ICP-OES at SRC (SRC) Geoanalytical Laboratories in Saskatoon, SK. Both SGS and SRC follow strict QA/QC protocols which includes the insertion of blanks, duplicates and standard reference materials into the sample stream.
This press release was prepared by Terry Brace, P.Geo., Cornerstone's VP Exploration and a Qualified Person (QP) in accordance with National Instrument (NI) 43-101. Exploration programs on the Chaleur property are being carried out under the supervision of John Pearson, P.Geo., Great Western's VP Exploration and a QP in accordance with NI 43-101.
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