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
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
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.
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.
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.
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