Central banks around the world continue to stockpile gold as a way to protect their national sovereignty as inflation continues to run rampant all over the world.
In fact, Russia now holds well over 20% of its reserves in gold.
Meanwhile, the central banks of Serbia, Hungary, Thailand, France, Brazil and Germany have added gold to their reserves in recent months.
I expect this to continue to happen as more and more countries deal with inflation as energy prices continue to soar.
Cornerstone Capital Resources:
As many readers know, Cornerstone is the founding partner of Cascabel, the only available Tier 1 copper-gold asset in the world not owned by a global, multi-national mining company.
It has a vast portfolio of assets as its business model is being a premier prospect generator with a diversified portfolio of gold, silver and copper projects in Ecuador and Chile.
For new readers, the highlight asset in its portfolio is Cascabel:
Cornerstone owns a 15% carried interest in Cascabel and 6.9% of project operator SolGold (LSE/TSX: SOLG) or effectively ~21% of Cascabel.
At the present valuation, investors have a unique opportunity to have exposure to a significant amount of minerals as it progresses to their next stage of development.
I will be doing a editorial on Cornerstone in the coming weeks, but today I am joined with the company CEO once again, Brooke Macdonald, to provide another update to the Gold Telegraph readers:
Alex Deluce:
Thanks, Brooke, for taking the time to update the Gold Telegraph readers on Cornerstone today.
To start, I noticed you recently announced a maiden resource at the Tandayama-America porphyry copper-gold deposit at your Cascabel project in Ecuador, in which Cornerstone has a 15% interest financed through to completion of a feasibility study plus 6.86% of the shares of joint venture partner and Project operator SolGold Plc, for a total direct and indirect interest in Cascabel of 20.8%.
Can you touch on these results and how things are progressing at Cascabel as we get closer to a Pre-feasibility study (PFS) before year end?
Brooke Macdonald:
Sure Alex. Tandayama-America, or “TAM”, is a satellite deposit located 3km north of the main Alpala copper-gold deposit at Cascabel. Alpala has a measure & indicated resource of 2.66Bt with a grade of 0.53% copper equivalent (CuEq) in the measured & indicated category containing about 21 billion lbs. of copper, 21 million ounces of gold and 92 million ounces of silver. Within the overall Alpala resource is a high-grade core of 359Mt grading 1.47% CuEq.
TAM has indicated mineral resources of 233 Mt with an average grade of 0.23% Cu and 0.16 g/t Au (0.33% CuEq[1]) and inferred mineral resources of 197 Mt with an average grade of 0.27% Cu and 0.20% g/t Au (0.39% CuEq).
TAM adds further copper and gold mineralization to Alpala’s already large metal inventory and offers optionality and the potential, subject to the results of the PFS and definitive feasibility study, to generate economic ore earlier that would complement high-grade underground ore from Alpala.
The maiden resource estimate is based on assay results from 18 drillholes only (out of 30 drillholes) and drilling is still underway. A resource update is planned once the drilling is completed.
TAM is only one of a number of exciting satellite targets on Cascabel. Others include Aguinaga, Moran and Chinambicito. At the end of the day, Cascabel may host a cluster of deposits, and only more drilling and time will tell how large the system is. This is the kind of project that will eventually be acquired by a major mining company or companies looking for a large copper-gold resource.
The focus of the PFS is described in our April 8, 2021 news release: https://cornerstoneresources.com/news-releases/pre-feasibility-study-update-alpala-project-cascabel-concession-ecuador/
On October 13, SolGold, the operator of the Cascabel joint venture announced: “In relation to the PFS, work is ongoing. The SolGold Board will receive a briefing from the Project Committee on the PFS later this month and will update the market accordingly.”
[1] TAM Copper Equivalency (CuEq) was calculated (assuming 100% recovery of copper and gold) using a Gold Conversion Factor of 0 751 (CuEq = Cu + Au x 0.751), calculated from an updated nominal copper price of US$3.30/lb and a gold price of US$1,700/oz. Copper equivalent grades have been determined as ratios that take into account reasonable assumptions for metallurgical recovery based on similar deposit types, i.e., TAM shares the same geological and structural setting as the nearby Alpala deposit for which metallurgical recoveries have been estimated.
Alex Deluce:
How are things progressing at your other exciting pipeline of assets? Any updates you can share with us there?
Brooke Macdonald:
Newcrest Mining, which is farming into and is the operator on and is funding our Miocene gold-copper project in northern Chile, included the following statement in its October 28, 2021 Quarterly Exploration Report: “Drilling is planned to commence on the Gorbea and Miocene Joint Ventures during the December 2021 quarter.” Cornerstone is working on a news release describing the upcoming program, that we hope to release during the next week or two. In the meantime, investors can learn more about the Miocene project at the following link: https://cornerstoneresources.com/properties/chile/miocene/
Work continues to define drill targets at the Espejo concessions in NW Ecuador near Cascabel in our strategic exploration alliance with Enami EP, Ecuador’s State Mining Company:
Work is also continuing at the Caña Brava project in southern Ecuador where Cornerstone is operator but funding is provided by farm-in partner Newcrest, and where we anticipate being able to start drilling in Q1 2022. Drilling had been planned to begin in October this year but has been postponed due to delays in receipt of pending water permits. At the same time, we and Newcrest are advancing systematic early stage exploration work on the surrounding and much larger Tioloma concession.
At the Bramaderos project in Loja province in Southern Ecuador, a joint venture with Sunstone Metals Inc. of Australia, where Cornerstone has a 12.5% interest fully carried by Sunstone to start of commercial production, a maiden resource is expected for the Brama target sometime in Q1 2022: https://cornerstoneresources.com/news-releases/three-more-holes-intersect-mineralized-porphyry-at-brama-target-bramaderos-project-ecuador-paving-way-for-maiden-mineral/
We recently posted a video of how we got involved in Bramaderos (https://cornerstoneresources.com/properties/ecuador/bramaderos/) that can be viewed on our media page in the following link: https://cornerstoneresources.com/investors/media/
Work also continues at the 100% owned Bella Maria gold project bordering the NE corner of Lumina Gold’s Greater Cangrejos project where Lumina have announced an indicated resource of 10.4 m oz Au in the indicated category and 6.3 m oz. Au in the inferred category. https://cornerstoneresources.com/properties/ecuador/bella-maria/ Drill targets have been identified and we have applied for a scout drilling permit.
Bella Maria is available for option/farm-in. As a prospect generator following the JV model, we prefer to take projects to the drill ready stage and then find a partner with deeper pockets to fund the drilling and feasibility studies while we retain a carried interest.
Information on all of our projects can be found in our May 2021 corporate presentation in the following link: https://cornerstoneresources.com/site/assets/files/5534/cgp_corporatepresentation_2105.pdf
Alex Deluce:
As my readers know, Cascabel is a world-class, Tier 1 asset that BHP, Newcrest and Franco-Nevada have endorsed.
Can you touch on why tier 1 copper assets are so crucial for the future of mining, especially as we enter into this green revolution which should dramatically increase the demand for copper?
Brooke Macdonald:
There are articles published every day on how there will not be enough copper to supply the electric vehicle and green revolution. According to an article by James Atwood published March 19, 2021 on Bloomberg:
“The copper industry needs to spend upwards of $100 billion to close what could be an annual supply deficit of 4.7 million metric tons by 2030 as the clean power and transport sectors take off, according to estimates from CRU Group. The potential shortfall could reach 10 million tons if no mines get built, according to commodities trader Trafigura Group. Closing such a gap would require building the equivalent of eight projects the size of BHP Group’s giant Escondida in Chile, the world’s largest copper mine.”
While copper supply and demand may be in equilibrium in the near term, by 2030 most of the commentators I have seen are predicting a shortfall. That’s why Cascabel is on the radar of every major copper producer. As they produce, eventually they have to replace reserves.
Alex Deluce:
What are your current thoughts on the overall precious metals market?
Brooke Macdonald:
Mining.com recently reported that the former CEO of Goldcorp, David Garofalo, is predicting global inflationary pressures could send gold prices to $3,000 an ounce.
I don’t think anyone can accurately predict when gold will rise above its current levels, but it’s safe to say it will more than hold its value and rise substantially at some point due to the increase in money supply in the past few years and the resulting inflation that will bring.
Cascabel contains a lot of copper and a lot of gold, in a stable jurisdiction with excellent infrastructure. It is a very unique asset, and we are hopeful the PFS will be the catalyst that sends our share price higher as investors come to the realization that it is only a matter of time before a major mining company or companies want to acquire it.
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