11-21 - Cornerstone and Thundermin announce 66% increase in indicated and 61% increase in inferred NI 43-101 compliant mineral resources at the Little Deer Copper Deposit, Newfoundland
Highlights
1,911,000 t grading 2.37% Cu
3,748,000 t grading 2.13% Cu
Brooke Macdonald, President of Cornerstone, said "The updated mineral resource estimate represents a substantial increase, and we are very pleased to have met our goal of establishing five to six million tonnes of potentially economic grade copper mineralization. Results of the internal scoping review, also being carried out by P&E, are expected to be received by June 30th. This study is evaluating a range of potential mining and operating scenarios for the project and will provide management with preliminary information on the economic viability of developing a new copper mine at Little Deer".
Table 1: Summary of Little Deer Mineral Resources (P&E, June 20, 2011)
| Resource Classification/Zone | Tonnes (t) | Copper (%) | Cu lbs (M) |
| Indicated Mineral Resources | |||
| Little Deer Zone | 1,911,000 | 2.37 | 99.8 |
| Inferred Mineral Resources | |||
| Little Deer Zone | 1,240,000 | 1.93 | 52.8 |
| Footwall Zone | 1,711,000 | 2.04 | 77.0 |
| Footwall Zone Splay | 797,000 | 2.64 | 46.2 |
| Total Inferred Resources | 3,748,000 | 2.13 | 175.9 |
1) Mineral resources which are not mineral reserves do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues.
2) The quantity and grade of reported Inferred resources in this estimation are uncertain in nature and there has been insufficient exploration to define these Inferred resources as an Indicated or Measured mineral resource and it is uncertain if further exploration will result in upgrading them to an Indicated or Measured mineral resource category.
3) The mineral resources in this press release were estimated using the Canadian Institute of Mining, Metallurgy and Petroleum (CIM), CIM Standards on Mineral Resources and Reserves, Definitions and Guidelines prepared by the CIM Standing Committee on Reserve Definitions and adopted by CIM Council.
4) Ordinary Kriging was used for Cu grade interpolation.
5) Grade capping of 15% Cu utilized on composites.
6) A variable bulk density based on numerous field measurements was used for tonnage calculations.
7) A copper price of US$3.42/lb (May 31 2011 24 month trailing average) and an exchange rate of US$0.95=C$1.00 was utilized to derive the 1% Cu cut-off grade. Mining costs were C$40/t, process costs were C$15/t and G&A was C$5/t. Concentrate freight and smelter treatment charges were C$10/t mined. Concentrate mass pull was 7%, process recovery was 97%, smelter payable was 96% and Cu refining was US$0.07/lb.
The updated mineral resource estimate for the Deposit is based on assay results from 48,432 m of drilling in 82 holes completed by Thundermin and Cornerstone since June 2007 and assay data from a total of 102 surface and 122 underground historical holes that were drilled by British Newfoundland Exploration Company ("BRINEX") between 1961 and 1970 and Mutapa Gold Corporation between 1998 and 2000. The historical information was recovered from the archives of the Newfoundland and Labrador Department of Natural Resources in St. John's, Newfoundland.
P&E undertook a new cross sectional interpretation on approximately 10 m centers for the entire Deposit and created a wireframe model of the 3-D solids in order to determine an overall shape and volume for the Deposit. Copper grade data for all samples assayed by Cornerstone and Thundermin from the 2007 to 2011 drill programs and all copper grade data recovered from the historical drilling were used to calculate copper grade estimates for the Deposit. Bulk density data collected by Cornerstone and Thundermin from the 2007 to 2011 drill programs was utilized for the calculation of bulk densities for the entire Deposit.
The substantial increase in tonnage in P&E's updated mineral resource estimate for the Deposit results from a reinterpretation of the sectional data for the Deposit, the inclusion of all of the historical assay data recovered from the archives, the inclusion of assay data for 25 holes drilled by Cornerstone and Thundermin since December 1, 2010 and the use of length-weighted bulk density data for individual assay samples that was not used previously.
Qualified Persons
The updated mineral resource estimate was prepared under the supervision of Mr. Eugene J. Puritch, P. Eng., President of P&E. Mr. Puritch is an independent Qualified Person ("Q.P.") in accordance with NI 43-101 and has reviewed and approved the contents of this news release. An NI 43-101 compliant Technical Report covering the updated mineral resource estimate is currently being prepared by P&E and will be filed on SEDAR by Cornerstone and Thundermin within 45 days of this news release.
Mr. Andrew Hussey, P.Geo., Project Geologist and Lands Manager, Cornerstone Resources Inc., is the Q.P. responsible for supervising the drilling program on the Little Deer property for the purposes of NI 43-101. Mr. Hussey has also reviewed and approved the contents of this news release.
Metallurgy
On October 19, 2010, excellent metallurgical results from scoping level test work on core samples from the Deposit were announced. This work, which was undertaken at SGS Lakefield Research Limited ("Lakefield") of Lakefield, Ontario, indicates that a saleable, high grade copper concentrate grading over 28% copper with over 97% recovery and free of any deleterious elements can be produced from the Deposit.
Infrastructure
The Deposit is located on a brownfield site and is well situated to take advantage of Newfoundland's developed infrastructure. The Deposit lies approximately 16 km from the Trans Canada Highway and is easily accessed by a 10 km network of paved and gravel roads north of Springdale, where there is an available skilled mining workforce. The site is approximately 8 km from a major power substation and there is a plentiful supply of fresh water in the area. The former tailings impoundment facility for the Whalesback mine, which may be able to be upgraded and used to store additional tailings, is located only 1.2 km north of the Deposit. There is also good access to several deep water ports for any future shipment of copper concentrates. The Duck Pond base metal concentrator, which is owned by Teck Resources Inc., is located approximately 165 km by paved and gravel roads from the Little Deer site, 70 km of which is along the Trans Canada Highway and 65 km of which is on a secondary paved road.
The recovery of archived data has also given us a better understanding of the underground infrastructure that exists on the property. This infrastructure dates from 1966 to 1972 and 1972 to 1974 when a portion of the upper part of the Deposit was developed and mined by BRINEX and Green Bay Mining Company ("Green Bay"), respectively. BRINEX accessed the Deposit from the adjoining Whalesback Mine, which is also controlled by Cornerstone and Thundermin, and Green Bay accessed the Deposit via a ramp. This existing infrastructure may potentially afford substantial cost savings for access underground for future definition drilling and mining.
Little Deer Joint Venture
Cornerstone and Thundermin, the operator, have the option, on a 50/50 basis to earn a 100% interest in the Deposit and adjacent property from Weyburn Investments Ltd. Thundermin, under its joint venture agreement with Cornerstone, has the right to increase its interest in the Little Deer property to 75% by completing a feasibility study and by arranging 100% of the necessary bank financing required to place the property into commercial production. Details on the Deposit and the terms of the agreement with Weyburn can be found in numerous news releases between May 1, 2007 and June 16, 2011 and on Cornerstone's and Thundermin's respective websites and on SEDAR.
Junior Exploration Assistance Program
Cornerstone and Thundermin would like to acknowledge the financial support received from the Junior Exploration Assistance (JEA) Program of the Province of Newfoundland and Labrador in carrying out a portion of their work on the Little Deer property.
Other News
In other news, Cornerstone wishes to remind its shareholders and the public that its upcoming Annual General Meeting will be held on Thursday, June 23rd at 11 A.M. (Newfoundland Standard Time) at the Johnson GEO CENTRE located at 175 Signal Hill Road, St. John's. All those interested are cordially invited to attend.
