Gold Market Action Signals Massive Liquidity Back Stop Operation GLD, SLV

  C.S. As with our recent Call on Apple, nothing here will be scientifically proven - all our markets are rigged and are pure Esoteric Fiction now. Our feeling tells us that recent carnage in Gold and Gold miners, particularly, is the preparation to the Massive Liquidity Back Stop Operation. 

Charles Nenner Calls For Silver and Gold Bottom - We Call For Apple To Cool Down AAPL, GLD, SLV

  Any such operation means the QE up to the infinity whatever it will be called. The action will be coordinated and must be unleashed on a truly huge scale in order to attempt to save the insolvent financial system from "the run on the banks". Battle Field will be in Europe - now Europe threatens to push all world economy into another recession. UK - the land of the brave, where all experiments with QE were started first - is already in recession technically. Austerity will be dying hard, but the Paul Krugman is now the bedside book.

The Gold Bug Manifesto By Paul Krugman: End This Depression Now

  What form this operation will take is not so important: there are rumors about Silver Bullet with banking super guarantee in Europe or it could be another LTRO spiced with World Wide Coordinated FED and Central Banks swap operations - the end result is that the liquidity will be flooding the system with record low Treasury Yields. The magnitude of the action will be very important - European banking system is under capitalised by 2.9 Trillion Euros now, according to UBS.

   Gold smells any currency debasement - here we are talking about worldwide phenomena - so it will be killed first. Panic in the sector has already shaken all weak hands and once the public has realised what is coming gold will resume its uptrend.

Gold, Silver and Commodities have grown up and will live their own life in the Bull Market while General Market will be busted by recession.

   Chart above provides us with some Technical confirmation of our Esoteric sensations, we have two very strong Reversal Candles on Weekly. Daily chart below is painting the Double Bottom Reversal with the recent retest of the low.

  Gold miners were living lately in their own world - all excitement about the Sugar High general market action has left them behind.

  We are at the 2010 Low on the Weekly chart - two year of gains were wiped out from the last October. GDX is trying to build the Reversal - we have the Reversal Candle and Volume signal. Move above MA200 will confirm the Buy signal here.

  Gold Miners Daily chart is already excited with the new opportunity and screaming Buy on MACD, Volume on week of May 14th provided the confirmation of the positive move out of Oversold condition.

  The real drama is on the chart above. Gold Junior Miners could be the New Misery Index of the New Normal. You do not know, what the financial pain means, if you were not investing in Gold, Silver, Copper, Lithium and REE juniors lately. Here Juniors managed to hit the 2010 Low. We have the Bullish Engulfing Candles now, Volume signal and the next move Up should confirm the Buy on MACD.

  Daily chart above shows Buy with Strong Reversal Candle in the week of May 14th, Volume signal and retest of the Low in the week of May 21st, with Double Bottom Reversal. This elevator goes very fast in both directions, but not all passengers will be taken UP - collateral damage will claim the weak companies who was not able to finance and keep their projects.

   Guidance will be the quality of teams, projects and who is behind the company - we are talking here about the opportunity not seen from February 2010, when market never looked back until Top in April 2011.

Gold and rare earths juniors in the bargain basement - Lundin

  Update: April 29th, 2012 - CDNX Daily chart shows some signals of life coming back. 

  We could not agree more with Brien Lundin - time has proven his calls before and time will tell us again whether he is right now.

Consolidation Potential for Lithium Juniors GXY.ax, LI.v, ILC.v, ORE.ax, RM.v

'We have been talking here about the security of supply of strategic commodities for quite a while. All major players in Lithium batteries market prefer to keep chips close and bought strategic stakes in lithium developers. Now we have a consolidation in Lithium junior miners started by Galaxy Resources. From the four Lithium darlings we are following here: International Lithium, Rodinia Lithium, Lithium One and Orocodre - Lithium One is taken out now.

James West - the founder of Midas Letter - still has his golden touch.James West has been talking about Lithium One and International Lithium in his recent Energy Report and now one of his picks in this sector is bought out. Galaxy move will add Lithium and Potash brine in Argentina to the portfolio of hard rock mining lithium in Australia, lithium chemical plant in China and lithium battery plant in the making in China as well. Can we talk about vertical integration in the Lithium industry already now?"




MineWeb:


Gold and rare earths juniors in the bargain basement - Lundin

Brien Lundin, chief executive of Jefferson Financial says he's slowly accumulating gold and rare earths sector juniors on the cheap that have big news in their forecasts. Gold Report interview.

Author: Brian Sylvester

Posted:  Saturday , 07 Apr 2012


TORONTO -
The Gold Report: You've compared the gold market to the weather because it's about that predictable. What does your experience tell you about navigating a market like this?
Brien Lundin: You have to be nimble and keep your eye on the big picture. Every asset class is searching for a trend. The U.S. economy is in transition. The equity markets are in transition. Everything is in limbo searching for the next trend line. There's just no telling whether that next direction is upward or downward.

In times like this, investors need to look beyond the day-to-day headlines. They need to keep the bigger picture in mind, focus on buying value on the dips and not getting too aggressive in any case.

TGR: You were recently at the Prospectors and Developers Association Conference in Toronto. What's the common refrain you're hearing from investors and what's your response?

BL: They're wondering when things are going to turn around. I wish I could provide them with the answer because I'm searching for that answer myself. We needed calmer markets, which we have now. We don't have the dancing-along-the-precipice type of markets that we had earlier this year when it seemed Europe could crater at any moment. Now we need to have some recognition that there is going to continue to be an easy-money environment as a backdrop and that there will continue to be monetary inflation to support the commodity markets and, most important, gold. Until we have fairly steady, non-crisis-driven markets with a consensus toward monetary easing, we won't see investors turn to the more speculative assets, such as mining shares.

TGR: Many gold investors believe that continued growth in the U.S. economy will eliminate the need for further quantitative easing (QE) by the U.S. Federal Reserve, which could suppress the gold price. You argue that there is already $1.5 trillion in the system that hasn't been deployed by the Federal Reserve. In February, you wrote, "This money officially doesn't exist. Until the nation's banks start withdrawing it to make loans and insert the funds into the economy, sustained U.S. economic growth, in other words, won't be the end of liquidity injections. Instead, it will mark the beginning of a new phase, as the velocity of today's huge overhanging money supply accelerates and inflation truly kicks in." That sounds promising for precious metals prices, but are banks ready to start lending their hoards of cash?

BL: Simply put, they aren't yet. What I was talking about was a scenario of economic growth, one in which the banks would not only be able to start lending again but would also be eager to start lending to capture that greater margin by creating loans. Under that scenario of economic growth, bank lending would increase and there would be a shot of adrenaline hitting the market as reserves become currency.

The key is that so much debt and currency have already been created that gold wins in virtually any economic scenario, whether it's economic growth or a continued easy-money environment in a more sluggish economy. Under either scenario over the long term, gold is a winner precisely because there's already so much debt and currency.

TGR: Do you have any timeline for that scenario to take place?

BL: One of the important timelines is presented by the presidential election in the U.S. That is going to be a key inflection point for the markets. If the current administration is retained, there would be more easy-money policies. Those policies won't suddenly end if we see a Republican elected, however, because there's been so much debt created in the U.S. and Europe. There's no way to escape that burden through economic growth, austerity plans or tax hikes. We cannot manage that mountain of debt that's already been accumulated. The only way to address it is through monetary inflation, by making the debt less valuable by increasing the quantity of dollars and euros.

TGR: You can't do that with gold.

BL: That's why gold is gold. As J.P. Morgan is rumored to have said, "Gold is money. That's it."

TGR: Gold and silver equities have lagged the prices of their respective commodities since December 2010. What tangible move in the gold price is necessary to lift share prices to float the boat of all these junior companies? They're not even moving on good drill results right now.

BL: It's as much a matter of time as price. It's not just a matter of getting a $100/oz, $200/oz or a $300/oz rise in the gold price, which, of course, would move the juniors if it occurred in a steady fashion against the backdrop of normalcy in the markets and economy. That rise would need to occur over a period of time long enough so that investors would be comfortable in taking on risk. Juniors cannot thrive in an environment where investors are searching for safety.

TGR: As an approach to the moribund gold equities market, you recommend a stick-to-your-knitting strategy of continuing the "slow but steady accumulation of undervalued companies with news on the way." Are you expecting some positive news in the near future?

BL: There are a lot of bargains out there that aren't just grassroots exploration companies with an idea and not much more. These are companies that either have resources or are very likely to turn out very positive news in the near term.

TGR: The rare earth elements sector took a big hit in 2011, but you still see value in a few plays. Tell us why rare earths still remain on your radar?

BL: The economic fundamentals have not changed. These plays go in and out of fashion in the markets and there are bursts of buying here and there. A number of these plays are still much undervalued.

TGR: It's been a pleasure speaking with you.

With a career spanning three decades in the investment markets, Brien Lundin serves as president and CEO of Jefferson Financial, a highly regarded publisher of market analyses and producer of investment-oriented events. Under the Jefferson Financial umbrella, Lundin publishes and edits Gold Newsletter, a cornerstone of precious metals advisories since 1971. He also hosts the New Orleans Investment Conference, the oldest and most respected investment event of its kind.

Sprott Shifts From Gold Bullion To Gold Stocks, Explains Why ilc.v, tnr.v, czx.v, rm.v, lmr.v, abn.v, asm.v, btt.v, bva.v, bvg.v, epz.v, fst.v, gbn.v, hao.v, jnn.v, ks.v, ktn.v, kxm.v, mgn, mxr.v, rvm.to, svb, ura.v, nup.ax, srz.ax, usa.ax

ZeroHedge:

Sprott Shifts From Gold Bullion To Gold Stocks, Explains Why

Submitted by Tyler Durden on 09/14/2011 16:32 -0400

• Equity Markets
 
• Eric Sprott
 
• Futures market
 
• International Monetary Fund
 
• Precious Metals
 
• Reality
• Reserve Currency
 
• Sovereigns
 
• Volatility

From Eric Sprott and David Baker

Gold Stocks: Ready, Set,…

Last week, the HUI Gold Index marked a new all-time high as it surpassed 600. Recent gold equity investors were undoubtedly happy with this move, but for longer-term holders, the recent strength is actually somewhat disappointing. If you review the chart below, you’ll notice that while the gold price has almost doubled since early 2008, the HUI Index has appreciated by a mere 22% over the same period (see Chart A). If the HUI was justified at 500 in early ’08, it should surely be justified at 1,000 today, given the appreciation of the gold price over that time. So why have the equities lagged?

Chart A

Source:  Bloomberg

First and foremost: the sell-side’s abysmal gold price estimates. Table 1 shows the average gold price that analysts are using to value gold equities today. While the futures market is comfortably forecasting a continuation of today’s levels, the majority of sell-side analysts refuse to update their gold price estimates to reflect its recent strength. A rising gold price is normally a bad sign for the broader equity markets, and generally indicates a bearish trend. As bears ourselves, we’re completely fine with this, and invest accordingly. But the sell-side has difficulty pairing bearishness with new underwriting opportunities. It doesn’t mean you have to believe their price forecasts however.

The second reason is gold’s volatility. The amount of paper gold and silver contracts that trade on the futures and equities exchanges still dwarf the amount of actual physical trading that takes place. Paper markets continue to set price discovery – thereby allowing for dramatic volatility with little or no influence from actual physical fundamentals. In the LBMA market, for example, market participants traded an average 19.6 million ounces of gold PER DAY in July 2011.1,2 Keep in mind that the total gold mine production in 2010, globally, was approximately 86.5 million ounces. Global gold mine production is not expected to increase significantly year-over-year, so the LBMA is essentially trading a year’s worth of production in less than a week. And this is just ONE market. When you add the COMEX futures and gold ETFs, the paper trading volume becomes absurdly high. When price discovery is dictated by levered paper contracts with no physical backing, it’s extremely easy and relatively inexpensive to jostle the spot price around. The result for gold has been many days of extreme downside volatility, despite a strong and consistent overall upward trend. Investors don’t like volatility – and the constant whipsawing has probably kept many of them away from the gold equity sector as a result.

Thirdly – investors still remember how badly gold equities got crushed in 2008. There was a reason they sold off so aggressively however – they were the most profitable positions investors owned going into the ‘08 crisis. Gold equities had enjoyed a strong bull trend going back to 2001, with the HUI Index appreciating by 980% from its November 2000 low through to August 2008. Investor behaviour is fairly consistent – when panic hits, you sell your winning positions first.

Something has changed recently, however. A new divergence has arisen in the precious metals equity market – a subtle, but plainly evident shift in recent daily performance. On Wednesday, August 10th, for example, the Dow dropped 4% while gold stocks rallied 3%, for a delta of 7% on the day. That is significant outperformance, and not what we have come to expect on an equity market down day. Gold stocks, as represented by the HUI Index, also seem to be breaking away from their traditional correlation with the spot gold price. On August 29th, spot gold dropped 2.16%, while the stocks fell by only 0.81%. On September 7th, gold fell by 3.09%, while gold stocks rose by 0.33%. These small differences indicate a new trend forming. While gold’s daily volatility is expected to continue, we may be entering a new phase where the stocks react less harshly on gold down days, and outperform gold on days of strength.

The gold equities’ recent divergence has played itself out even more prominently against the financials, with the HUI Index outperforming financials by a stunning 49% since the beginning of July (see Chart B). As we wrote in "The Real Banking Crisis" two months ago, there appears to be a run on European banks, and financial stocks are reflecting that. IMF Managing Director, Christine Lagarde, recently confirmed as much in her Jackson Hole speech, where she warned about the banks’ need for urgent recapitalization: "They must be strong enough to withstand the risks of sovereigns and weak growth. This is key to cutting the chains of contagion. If it is not addressed, we could easily see the further spread of economic weakness to core countries, or even a debilitating liquidity crisis."3 Investors aren’t waiting around to see if they’ll pull it off, and as the chart below suggests, at least some of them have reinvested their former bank equity capital into the precious metals sector.

Chart B

Source:  Bloomberg

As a side note, Chart C symbolizes the great wealth redistribution that has taken place since 2000. Those investors who have owned precious metals equities have prospered, while those who have invested exclusively in the broader equity market or financials have little to show for it. We clearly see this trend continuing, and even accelerating, in the coming years.

In many of the funds we manage at Sprott, we’ve transitioned out of gold bullion and into gold equities to better participate in the continuation of the trend indicated above. As long-time investors in this space, we can assure you that the production growth rates will be significantly higher in the junior stocks. They continue to trade at discounted valuations, and we believe they offer the best opportunity to build exposure. Margin expansion is the key metric for this industry, and the market is now acknowledging the miners’ improvement in margin capture – which has occurred despite the increase in capital and operating costs (see Chart D). We meet with a large number of gold mining management teams on a weekly basis, and based on those meetings, it appears that the average cost of producing an ounce of gold today, all in, is now around $800. At $1,200 gold, these companies can capture roughly $400 in EBITDA. At $1800 gold, however, they’re now capturing $1,000 per ounce in EBITDA - representing an increase of 150% in profit margin. That is significantly far above what any other equity sector has been able to generate over the past year.

Amazingly – despite this new reality for gold producers, we are still finding opportunities in select gold and silver mining companies that can be purchased today at 2-3 times their 2-year-out forecasted cash flow. These multiples are based on the current gold and silver spot price, and if these companies hit their production targets, and gold and silver continue their appreciation – we may discover that these stocks were trading at less than 1 times 2-year-out cash flow today. Having been in the business for many years, we can tell you that investing in a stock at 1 times 2-year-out cash flow tends to be a winning proposition – let alone in an industry that literally mines the world’s reserve currency out of the ground.

Chart C

Source:  Bloomberg

Chart D

Source:  BMO Capital Markets

In our view, gold stocks represent a bona fide growth sector in an otherwise dreadful equity market. All other equity sectors are weakening due to sovereign uncertainty and the reemergence of soundly weak economic data. The recent disconnect between gold equities and bullion isn’t new either. We’ve seen it before over the past decade, and the returns generated after previous divergences have averaged around 26% (see Table 2). Given the recent performance correlations, the HUI’s breakout above 600 and spot gold now firmly above $1600, we expect this rebound in gold equities to be prolonged and much more significant in percentage terms.

Equity investors shouldn’t let $1800 gold dissuade them from participating in precious metals equities. The world is still dramatically underexposed to gold, and we firmly believe it should represent a higher percentage of investors’ total portfolios today. The fact remains that both gold and silver continue to trade well below their inflation-adjusted highs in nominal terms, and the market is now beginning to acknowledge the profit potential that precious metals equities offer at today’s bullion prices. We believe the equities will offer more upside than the bullion over time.  Many of the smaller names are well priced and have momentum behind them. The prospects for gold stocks look extremely bright. 

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Cornerstone Reports 1.34% Copper and 58.0 g/t Silver over 19.5 m in trenching at La Fortuna Copper-Silver Project, Chile ilc.v, tnr.v, czx.v, rm.v, lmr.v, abn.v, asm.v, btt.v, bva.v, bvg.v, epz.v, fst.v, gbn.v, hao.v, jnn.v, ks.v, ktn.v, kxm.v, mgn, mxr.v, rvm.to, svb, ura.v, nup.ax, srz.ax, usa.ax

"Juniors: AuRico Gold to Acquire Northgate Minerals and Create A Leading Intermediate Gold Company.  We have a deal in Junior Gold mining space - consolidation will be driving this sector higher. Risk trade is coming back. The deal has valued Northgate Minerals at 45% premium to the average price of the past 20 days. 

  We are following here another merger in Gold and Silver space and Minera Andes shareholders will have now even more questions to ask the management about valuation in the proposed merger with US Gold.

"Once the panic settles we will see flight to the Real assets, China will not be able to diversify all 1.2 Trillion holdings in US Treasuries, but the gradual transition will be in place - new world currency will be the Hard one based on Gold, Silver, Copper and access to strategic commodities like Oil, Lithium and REE. We are expecting that first the gold Majors will properly reflect the Gold valuation in their market caps and after that liquidity will go downstream into the Gold and Silver Juniors. Copper juniors will be at the mercy of the M&A consolidation game again and Lithium will show its truly strategic status with every uptick in the Oil price again. 

  James Dines can be right on the money again with his calls this time. And we will be honest with you - we just do not know what to do if political circus will bring US to the abrupt end without the proper glory of the Rome Empire in its final days."

We are monitoring this project generation company with portfolio in multi commodities across the continents. 

"Excellence in Mineral Exploration. Cornerstone Capital Resources Inc. has a strong and dedicated technical team who are focused on generating and advancing new projects that have great potential for discovery. Cornerstone leverages its own exploration funding through joint venture and strategic partnerships, providing shareholders with potential for success at lower risk. Cornerstone has a diversified portfolio of gold, silver, copper, nickel, VMS, rare earth elements, and uranium properties in Canada, Ecuador and Chile."

"Cornerstone's two most recent acquisitions, made through its wholly-owned subsidiary Minera Cornerstone Chile Limitada ("MCCL"), are the Miocene and La Fortuna projects in Chile. The Miocene project is located in the Regions of Atacama and Antofagasta of northern Chile, and is targeting epithermal gold-silver and porphyry gold-copper deposits along the interpreted northern extension of the Maricunga magmatic belt which hosts several world-class gold deposits. The La Fortuna project is located in the Valparaíso Region of central Chile, and is targeting manto-type copper-silver and epithermal gold-silver deposits similar to those at the Cerro Negro copper-silver mine and El Bronce epithermal gold-silver district respectively. These projects were selected after two years of careful research and evaluation, and Cornerstone feels both offer tremendous potential for discovery. Chile consistently ranks among the world's top mining jurisdictions, and we are extremely excited to have added these projects to our international portfolio."

August 30, 2011

Cornerstone Reports 1.34% Copper and 58.0 g/t Silver over 19.5 m in trenching at La Fortuna Copper-Silver Project, Chile

Mount Pearl, NL, Canada: Cornerstone Capital Resources Inc. ("Cornerstone") (TSXV-CGP) (F-GWN) (B-GWN) (OTC-CTNXF) announced today preliminary results for the ongoing exploration program at the La Fortuna copper-silver project located in the Valparaíso Region of central Chile, approximately 100 km north of Santiago. A map showing the location of the La Fortuna project, as well as geology and exploration results may be viewed at www.cornerstoneresources.com.

Highlights

Seven prospective mineralized zones distributed over a large area (18 km2) identified to date

Of 163 rock samples collected during mapping and prospecting, 34 (19%) returned > 0.5% Cu, including 24 (14%) which returned > 1.0% Cu; 18 (10%) returned > 30 g/t Ag, including 5 (3%) which returned > 100 g/t Ag

Trench TH1 returned 19.5 m at 1.34% Cu and 58.0 g/t Ag

78% of copper is soluble in samples (49) which returned > 0.5% Cu

200 line km ground magnetic survey completed; Induced Polarization survey planned

Project located immediately adjacent to the Cerro Negro copper-silver mine and mill with connecting road infrastructure

Brooke Macdonald, Cornerstone's President commented: "We are very pleased with the results obtained so far at La Fortuna. In only a few months our geologists have identified significant mineralized zones distributed over an extensive area. Ground magnetic and induced polarization geophysical surveys will help to locate the stratigraphic horizons where we believe sulfide replacement and manto-type mineralization occur at depth. There are already some obvious drill targets, and with further trenching and data integration, new targets will be developed."

Assay results

Significant copper and silver assay results have been obtained in the northern two-thirds of the property, with seven prospective mineralized zones identified over a large area of approximately 18 km2. Higher-grade mineralization is concentrated in, but not restricted to, veins that are typically 1 to 2 m wide but occasionally up to 4 m. Mineralization is also present as disseminations in fracture/shear zones and at the outer contact zone of intrusive rocks, over significant widths (up to 19.5 m in trench TH1, see assay results below). The structural zones are up to 50 m wide, and there is normally a correlation between Cu and Ag contents.

A total of 163 rock samples (representative chip samples) were assayed during the prospecting work. Of these, 63 samples returned > 0.1% Cu, including 34 samples which returned > 0.5% Cu and 24 samples which returned > 1% Cu. Eighteen (18) samples returned > 30 g/t Ag, including 5 samples which returned > 100 g/t Ag. Eight (8) samples are gold anomalous (>0.1 g/t Au), including 3 samples which returned > 0.5 g/t Au.

Including channel samples (160) from the trenching program, forty-nine (49) samples which returned > 0.5% total copper (1.78% Cu arithmetical average) were re-assayed for soluble copper (1.43% Cu arithmetical average). These results indicate that 78% of the copper is soluble.

Exploration program

The La Fortuna property covers an area of approximately 2,900 hectares, measuring 10 km north-south by 3 km east-west. The project is favourably located in an established mining district at relatively low elevations (1200 to 1800 m above sea level), and is easily accessed by existing roads. The property is partly contiguous with the Cerro Negro copper (silver) mine, a manto-type deposit immediately to the west which combines open pit and underground operations and produces copper cathodes via heap leach SX-EW and copper-silver concentrates via flotation. The El Bronce epithermal gold-silver district is located 30 km to the north. The region is sparsely populated, and has a hot and dry climate which is well-suited for leaching operations. Many surface mineral occurrences have been worked by small scale miners in the past but no drilling has ever been carried out at La Fortuna.

An exploration program began in April with reconnaissance geological mapping, prospecting and rock sampling. During this initial work phase, geological units were defined, a structural study performed, and altered and mineralized zones were mapped and sampled. Following the reconnaissance work, data was integrated and prospective areas defined for follow-up. Detailed mapping and hand-trenching were then initiated and this work is ongoing. Eleven (11) trenches totaling 532.7 meters were dug and channel sampled. A total of 427 rock samples (167 rock chips from prospecting and 260 trench channel samples) have been collected so far on the project. Assay results are still pending for the last 105 samples. A ground magnetic survey in excess of 200 line km was recently completed by consulting firm, Santiago-based, Argali Geofisica E.I.R.L. in the northern 2/3 portion of the property. This geophysical data is currently being processed and will be used to support the geological interpretation and to define the most prospective areas to carry out an Induced Polarization (I.P.) survey in the coming months. Further trenching and detailed geological mapping are planned in areas where anomalous Cu-Ag-Au results have been obtained thus far.

Trenching

Eleven (11) trenches were dug in the Guayacan (3), Loma Verde (1), Loma Verde Sur (3), Quebrada Honda (1), Vizcachas (3) and Enjalmao (1) areas for a total of 532.7 m. Assay results from trenches TH1 to TH7 shown below in Table 1 indicate that mineralization is not restricted to the veins and could extend significantly, as disseminations, into the wall rocks.

Table 1. La Fortuna Trenching Results.

Trench Zone Length (m) # Samples Interval (m)* Cu (%) Ag (g/t)

TH1 Loma Verde 19.5 10 19.5 1.34 58.0

TH2 Vizcachas 66.0 32 12.0 0.21 13.0

TH3 Vizcachas 21.8 10 No Significant Values

TH4 Vizcachas 18.3 9 5.7 0.04

TH5 Enjalmao 47.0 22 24.0 0.09

TH5B Enjalmao 9.0 4 No Significant Values

TH6 Loma Verde Sur 83.6 42 18.0 0.08

1.2 0.27

2.2 0.31

TH7 Loma Verde Sur 62.8 32 10.8 0.60 17.6

TH8 Loma Verde Sur 117.9 58 Assay Results Pending

TH9 Guayacan 41.5 20 Assay Results Pending

TH10 Guayacan 34.8 17 Assay Results Pending

TH11 Guayacan 10.5 5 Assay Results Pending

* The reported copper and silver intervals are apparent thicknesses due to the early nature of the exploration program.

The trenching program is ongoing and will be extended to areas where veins, structures and disseminated mineralization were found during prospecting work and that have not yet been properly evaluated.

Sampling and assaying

All samples are delivered by Cornerstone employees for preparation at Acme Analytical Laboratories (ACME) facility in Santiago, Chile. Rock samples are prepared crushing 1 kg to 80% passing 2 mm (10 mesh), splitting 250 g and pulverizing to 85% passing 0.075 mm (200 mesh) (ACME code R200-250). Gold is assayed in Chile, using a 30 g split, Fire Assay (FA) and AA or ICP-ES finish (ACME code G601).

A 100g-plup is shipped to ACME in Vancouver, Canada where samples are assayed for a multi-element suite (ACME code 1DX2, 15g split, Aqua Regia digestion, ICP-ES finish). All samples with results > 100 g/t Ag, >10,000 ppm Cu, Pb or Zn are systematically and quantitatively re-assayed (ACME code 7AR, Aqua Regia Digestion, ICP-ES finish). All samples with results > 5,000 ppm Cu total are systematically re-assayed to determine leachable copper (ACME code G9, Citric acid leach, Cu, 1 g/100 mL, AAS finish).

Quality assurance / Quality control (QA/QC)

ACME is an ISO 9001:2008 qualified assayer that performs and makes available internal assaying controls. Certified blanks and standards are systematically used as part of Cornerstone's QA/QC program. One of them was inserted every 20 samples at La Fortuna.

Qualified Person

Yvan Crepeau, M.Ba., P.Geo., General Manager of Minera Cornerstone Chile Limitada (MCCL) and a qualified person in accordance with National Instrument 43-101, is responsible for supervising the exploration program at the La Fortuna project and has reviewed and approved the information contained in this news release.

La Fortuna option agreement

Cornerstone, through its wholly-owned subsidiary, MCCL, has entered into an agreement with a Chilean individual to acquire the La Fortuna property. The agreement gives Cornerstone the right to acquire an undivided 100% interest in the La Fortuna property by incurring exploration expenditures of C$3.0 million and making cash payments totalling C$600,000 over a 4-year period. Requirements to maintain the agreement through the first year include a cash payment of C$100,000 and exploration expenditures of C$500,000. The acquisition is subject to a 1.5% Net Smelter Royalty ("NSR"), and to advance payments of the NSR on each anniversary following the date the option is exercised. Cornerstone has a right of first refusal to purchase the NSR if the holder decides to sell it.

About Cornerstone

Cornerstone Capital Resources Inc. is a mineral exploration company based in Mount Pearl, Newfoundland and Labrador, Canada, with a diversified portfolio of projects in Ecuador, Chile, and Atlantic Canada, 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. The company is well funded and commitments from JV partners constitute significant validation of the strength of Cornerstone's projects. Further information is available on Cornerstone's website: www.cornerstoneresources.com.

For investor, corporate or media inquiries, please contact:

Investor Relations:

Email: communications@crigold.com

North America toll-free: 1 (877) 277-8377

Martti Kangas - Direct Line: 1 (647) 521-9261

Paul Benwell / Pat Kairns - Direct Line: 1 (514) 904-1333

Investors can access and join the following Cornerstone social media channels:

Facebook

Twitter

YouTube channel

Flickr

The link to a recent Corporate presentation is:

http://www.cornerstoneresources.com/i/pdf/Presentations_0711_CRICorporate.pdf

The link to a virtual tour of drilling at the Gama prospect, Shyri concession in Ecuador is:

http://www.youtube.com/watch?v=Ne8XSfgLwIM

Cautionary Notice:

This news release may contain 'Forward-Looking Statements' that involve risks and uncertainties, such as statements of Cornerstone's plans, objectives, strategies, intentions and expectations. The words "potential," "anticipate," "forecast," "believe," "estimate," "expect," "may," "project," "plan," and similar expressions are intended to be among the statements that identify 'Forward-Looking Statements.' Although Cornerstone believes that its expectations reflected in these 'Forward-Looking Statements' are reasonable, such statements may involve unknown risks, uncertainties and other factors disclosed in our regulatory filings, viewed on the SEDAR website at www.sedar.com. For us, uncertainties arise from the behaviour of financial and metals markets, predicting natural geological phenomena and from numerous other matters of national, regional, and global scale, including those of an environmental, climatic, natural, political, economic, business, competitive, or regulatory nature. These uncertainties may cause our actual future results to be materially different than those expressed in our Forward-Looking Statements. Although Cornerstone believes the facts and information contained in this news release to be as correct and current as possible, Cornerstone does not warrant or make any representation as to the accuracy, validity or completeness of any facts or information contained herein and these statements should not be relied upon as representing its views subsequent to the date of this news release. 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 except where outcomes have varied materially from the original statements.

On Behalf of the Board,

Brooke Macdonald

President"

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