Condor Blanco Mines inks processing deal for Marianas iron project in Chile
Condor Blanco Mines (ASX:CDB)
has signed a heads of agreement (HOA) that would see production and
processing of tailings at its Marianas project in Chile become a
reality.
Local Chilean company Lacerta Finance and Mining Spa
successfully processed two 40 tonne bulk samples of ore from Marianas
that resulted in a positive magnetite recovery up to 63% iron.
Now the agreement looks to be a good chance to move to a contractual agreement within 30 days.
Which
is good news for Condor as the deal would mean it doesn't have to find
initial funding for the project, as Lacerte has relocated their
magnetite plant and mining equipment directly to the Marianas Project.
So
while the metrics are not huge, it is cash flow and would see 60,000
tonnes a month production of ore with 3 months of permitting with
100,000 tonnes per month (15,000t/month Fe concentrate) to be reached
before the expiry of 12 months.
Less an amount paid to Lacerte
for processing and production, through an agreed fixed percentage of
profits generated by the project it is a nifty deal putting cash into
Condor's coffers.
This may not be that far away as formal applications for mining,
permitting and environmental clearances are currently being completed
for lodgement.
In the current market this deal means positive cash flow, building once full production is reached.
This
has important long term revenue stream benefits which will assist
Condor’s extended exploration programs throughout its highly prospective
epithermal gold-silver and porphyry copper-gold projects in Chile.
The HOA provides 30 days to allow final due diligence and completion of a contractual agreement.
Lacerta has history in developing and operating tailings retreatment in the region.
A
commercial scale 200 tonne mining trial is to be extracted and shipped
to Lacerta at its processing plant at La Serena, Chile within two
weeks.
Following the final larger scale recovery test and
receipt of mine permits, Lacerta would relocate its magnetite processing
plant and all necessary mining equipment (including trucks, excavators
and dozers) and experienced production staff to Marianas.
Marinanas
The Marianas Project covers the mining and upgrading of a known supply of magnetite and hematite tailings located just outside the mining city of Copiapo.
It has an estimated 11 million tonnes of magnetite-bearing historical
tailings sitting there which can be exploited and profitably so.
Companies
before Condor have attempted to amalgamate the titles under a single
entity to monetise the Marianas resource but none have been able to
until Condor, which succeeded in exercising an option to acquire the
entire resource.
Analysis
This is a good deal for Condor, and potentially a cash flow generative metric that could lead a path to funding of the higher exploration potential of its epithermal gold-silver and porphyry copper-gold projects in Chile, some of which have seen good results to date. While a share price pop today is likely, a feature of the agreement when it moves to a contractual one is it moves Condor closer to self-funding.
