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Re: Monthly Update - Thursday, September 25, 2008

Cornerstone Update

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Certain statements contained in this investor update may be considered as forward-looking. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from estimated or implied results.

Dear Subscriber:

Despite the gut-wrenching turmoil in the markets of the past few weeks, there now seems to be some reason for optimism in the wake of the US government's moves to stabilize their financial system. What the Wall Street rescue package will mean for global economies in the long term is beyond my prognostication abilities but there are some trends that seem clear and, I believe, will be positive for the mining sector in general as well as for those of us in junior exploration companies.

The gold analysts claim that gold was being manipulated over the summer to unrealistically low levels by the large financial institutions and their central bank regulators. Whether true or not, gold and silver did take a significant bounce last week and look to be moving higher.

Personally I doubt we'll see $2000/ounce any time soon but I do expect prices will continue to climb. As John Embry, Sprott's noted gold analyst observed, the great sell-off of junior companies while gold was still trading in the $800/ounce range would have been unthinkable a few years ago. The clear implication is that junior exploration and development companies have been oversold and should come back with strengthening precious metal prices.

As for base metals and other commodities, the spotlight is on China and the other south Asian economies. Is their growth sustainable? Will there be a gigantic financial hangover from the Beijing Olympics? Are there other unidentified situations which could sabotage these economies? These situations will unfold with time but for now I would observe that metals like copper, molybdenum and uranium are still trading at near historical highs and companies that produce them should continue to make money. Further, as these economies continue to develop their middle classes, even in slower economic times the appetite for metals and commodities will be huge.

In the junior exploration sector, capital preservation is the current mantra for many companies. At Cornerstone our strategy is to balance the prudent use of our treasury with our continuing mandate to explore and advance our most prospective properties. You may recall that we acted promptly back in April to reduce staff and cut expenditures both in Ecuador and Canada following the declaration of the mining mandate.

In the meantime we have been working on four projects in Atlantic Canada. The Little Deer and Labrador Trough copper projects are joint ventures in which we share costs with our 50% partners. We further defer expenses by being the field manager for the joint ventures which

allows us to recoup overhead and administration costs. Expenses are

also mitigated by tapping into provincial government exploration support programs. Both our Labrador Trough and Chaleur(New Brunswick) projects have been approved for new grants that will offset our costs on the ground.

We are spending 100% Cornerstone dollars on the Dorchester/Goshen copper properties in southern New Brunswick, a resource-rich region (potash, natural gas) with excellent access and infrastructure.

Freeport Mining declined to participate in the program earlier this year due to the perception that a "Freeport-size" deposit was unlikely.

While I can't second guess their size criteria, we believe that a mid-sized deposit of chalcocite-malachite mineralization such as occurs at the Dorchester and Goshen prospects could be very valuable for Cornerstone. This type of mineralization is leachable and in an open-pittable deposit even low grades of copper mineralization can be mined and treated economically. We may eventually want to bring a partner into this project, but at this stage the large untested potential of the properties, particularly Goshen, and low operating costs in this part of New Brunswick should allow us to increase the value of the property with a modest investment.

Finally, a few words on recent developments in Ecuador. It seems certain that President Correa will win the September 28 referendum to approve the new constitution. It will then take a week or two to tabulate the results and install a new congressional body. There are good indications from within Ecuador that the new mining law will be one of the first new laws to be dealt with. Following that milestone, government then has 60 days to enact a new code of regulations. While there are still question marks surrounding environmental and water use permitting, for example, we are optimistic that there is an end in sight and that Correa's oft-repeated support for responsible mining will translate into the resumption of exploration in a reasonable time frame.

Best regards.

Colin

Colin B McKenzie, President & CEO

Cornerstone Capital Resources Inc.

Excellence in Mineral Exploration

"People, Process, Projects"

TSXV - "CGP" / OTC - "CTNXF"

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Email: mckenzie@crigold.com

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