Canadian miner Cornerstone Capital Resources Inc. – best known for its involvement in the Cascabel gold-copper project in Ecuador – has reached a deal with Newcrest Mining related to Cornerstone Capital’s Miocene properties in Chile. The project area hosts several world class gold deposits and is located approximately 200 kilometres southeast of the port city of Antofagasta.
Miocene Project
Under the terms of the agreement, Newcrest has the option to earn up to a 75% interest in Miocene by completing four agreed-upon stages, including upfront payments to Cornerstone and spending as much as approximately $109 million on the project.
If Newcrest earns a 75% interest, Cornerstone Capital will have the option for 90 days to convert 5% of its 25% project equity into a 1% net smelter returns (NSR) royalty.
“Newcrest is one of the largest gold mining companies in the world, operating mines in Australia, Papua New Guinea, and Indonesia, and we are pleased to have entered into this agreement with them,” Cornerstone Capital president and CEO Brooke Macdonald said in a news release.
“Newcrest is also actively exploring in Ecuador, where Cornerstone has a first mover advantage as a prospect generator in Ecuador since 2005, and several drill-ready properties available for option.”
Cascabel Project
The Cascabel mining project in Ecuador could host the world’s largest undeveloped copper mine, along with substantial gold resources.
Cornerstone Capital currently has a 23% aggregate interest in Cascabel, consisting of a 15% direct interest in the project, as well as an approximately 10% share in SolGold, which is funding the exploration at Cascabel and holds a majority stake in the mine’s Ecuador-based owner.
Former president and CEO of Cornerstone Capital, Glen McKay, led in expanding the company’s interests beyond Canada in 2011, acquiring Santa Barbara Copper and Gold, the former owner of Cascabel. Glen McKay is also the founder of Newfoundland Hard-Rok Inc., an explosives manufacturer providing drilling and blasting services to the mining industry in the Newfoundland and Labrador region. Although he no longer works at Cornerstone Capital, McKay remains a major shareholder.
“As a Cornerstone Capital shareholder, I’m hoping that company executives are thinking about ways to build and extract value,” McKay said in an interview. “If that means selling the Cascabel discovery to a larger player in the mining industry, then I would support that decision. The mining industry is expensive and requires large amounts of cash to bring any mine to the production phase.”
McKay notes that the acquisition of Miocene in Chile was the last thing he did at Cornerstone before hiring his eventual replacement, Brooke Macdonald. “This is an exciting deal,” McKay adds, referring to the Newcrest agreement on Miocene.
Cornerstone’s board of directors has been working on transactions that would unlock the value of the company’s non-Cascabel assets, including the Miocene project, as well as the company’s drill-ready and exploration properties in both Ecuador and Chile.
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