Some may like an "all-eggs-in-one-basket" sort of business strategy as it attempts to minimize costs and maintain a concerted focus, but there are definitely heavy degrees of risk for companies carrying that style of business practice. To others, "diversification is the key" to improving opportunities and boosting the likelihood of success. In order to hedge costs involved with being widely diversified, savvy developmental firms leverage the strengths of others to continue operations while still moving forward concurrently with their pipeline independently.
In the case of Mount Pearl, Newfoundland-based Cornerstone Capital Resources Inc. (TSX-Venture:CGP) (Pink Sheets:CTNXF), diversification is the path of choice. The junior mineral exploration company has a diversified portfolio of gold, silver, copper, nickel, Volcanogenic Massive Sulfide (or VMS, sulfides of metals deposited by submarine volcanoes), rare earth elements, and uranium properties in Canada, Ecuador and Chile.
Cornerstone lowers its risk and increases its reward potential through strategic partnerships and joint ventures to advance these projects and it shows through the barrage of press releases lately disclosing developments on many of its projects.
The month of August featured news of an intersect of 3.15 g/t gold over 3.2 metres on its El Strato Gold Property in Newfoundland (a project which Cornerstone received financial support from the Junior Exploration Assistance Program of the Province of Newfoundland and Labrador); a cut of 26 metres grading 0.45 g/t gold within a porphyry environment at its Gama prospect in Ecuador with partner Intrepid Mines Limited (TSX:IAU); and preliminary results, including Trench TH1 returning 19.5 metres at 1.34% copper and 58.0 g/t silver, for the ongoing exploration program at the La Fortuna copper-silver project located in the Valparaiso Region of central Chile.
Additional information in August included the filing of a NI 43-101 Technical Report for its Little Deer Copper Deposit in Newfoundland with JV Partner Thundermin Resources Inc. (TSX:THR) showing resources of 1.91 million tonnes at an average grade of 2.37% copper indicated and 3.75 million tonnes at 2.13% copper inferred. Lastly, August brought an announcement that the Ministry of Environment of Ecuador granted the environmental license for Cornerstone's La Encrucijada gold-silver-copper project located in southern Ecuador.
If that wasn’t enough, the Company wrapped up the month with news from the aforementioned Little Deer Copper Deposit stating that Cornerstone and Thundermin have exercised their option to acquire a 100% interest in the Deposit and certain adjoining property from Weyburn Investments Limited.
In order to fully exercise the option and acquire a 100% interest, Cornerstone will issue 2,351,916 shares and Thundermin will issue 5,075,188 shares to Weyburn. Cornerstone and Thundermin are 50/50 partners in the project at this point, but under their JV agreement, Thundermin may 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.
Investors are responding positively to the news today as shares of CGP have surged more than 13% to $0.215 heading into the closing bell and have risen approximately 40% in the last five trading days.
