Condor de OroInitial Drill Program Underway at Condor de Oro
In mid October 2013 Mariana Resources Ltd. ("Mariana") commenced the initial drill program at Condor de Oro. Hole 1 (CDOYE 001) has been completed to a depth of 282m. Hole 2, approximately 400m to the northwest, is underway. The drill program is designed to test a target area approximately 2km x 2km which Condor believes has potential to host a gold-copper mineralized system related to quartz-feldspar-porphyry intrusions. Under the terms of the agreement with Mariana, they are obligated to complete 1500m of drilling at Area 1 of Condor de Oro prior to January 31, 2014.
The proposed drill program consists of five holes at approximately 300m each, with completion scheduled by mid December. Mariana have advised they will release assay results in batches, with the first results expected in three to four weeks.
Area 1: Definitive Agreement signed with Mariana Resources Limited
Condor and Mariana have executed the Definitive Agreement for Area 1 (the southernmost Pucayacu precious and base metal target) at the Condor de Oro Project. Area 1 comprises 34 sq km of the 102 sq km project area. The Agreement supercedes the Letter of Intent announced on October 4, 2012. To allow for delays in the permitting process, the dates for completion of work and cash payments have been extended 120 days from the LOI; now Mariana must incur minimum exploration expenditures of $500,000 by January 31, 2014.
The Agreement gives Mariana the option to earn a 51% interest in Area 1 upon total payments of US$2.5 million and exploration expenditures totalling US$12.5 million over a four year period.
Area 2: LOI with Mariana Resources Limited
Area 2 includes the Yuracyacu target and the remaining 68 sq. km of the Condor de Oro concessions. By payment of US$50,000 in October 2012, Mariana acquired a 90 day exclusivity period with respect to Area 2; Mariana and Condor have mutually agreed to extend the exclusivity period, and the due date for the second payment of US$50,000 at Area 2. The date for this payment, as well as the revised anniversary dates for Area 2, will be finalized after completion of the current drill program at Area 1. By payment of US$50,000 at the conclusion of the exclusivity period, Mariana will have an option to earn a 51% interest in the Area 2 concessions. The terms of the Area 2 option are similar to the Area 1 option, with a 51% interest earned after cash payments of US$2.5 million and exploration expenditures of US$12.5 million over a four year period. A definitive agreement on Area 2 has not yet been executed.
Condor de Oro Ownership
The twelve Condor de Oro concessions are owned by Exploraciones Aguila Dorada S.A.C. ("EAD"). EAD has approval for up to 20 drill holes, on three of EAD's twelve concessions. Condor has an irrevocable option to acquire 85% of the issued shares of EAD, and in turn, Condor has granted Mariana an option to acquire 60% of Condor's shareholding interest, being an overall 51% interest. If the project is developed, the 15% not owned by Condor/Mariana will be issued an additional 1 million Condor shares, be carried to commercial production, and retain a 1% net smelter returns royalty.
The 102 sq km Condor de Oro project is situated along the Peruvian border with Ecuador and lies within the Cordillera del Condor, potentially one of the most significant emerging gold and copper belts in the world. On the Ecuadorian side of the border, recent discoveries within the belt include the Kinross/Aurelian Fruta del Norte gold deposit, located approximately 124 km to the NE, with published reserves* of 13.7Moz gold and 22Moz silver, and CRCC-Tongguan Investment (Canada) Co. Ltd.'s (formerly Corriente Resources Inc.) Mirador Copper District, located north of Fruta del Norte, with inferred resources* of 1.7Bt grading 0.6% Cu. On the Peruvian side of the border, approximately 54 km west of the Condor de Oro project, is Zijin Mining's Rio Blanco copper-molybdenum project with reported reserves of 1.2Bt grading 0.57% copper and 228 ppm molybdenum.
Condor's property on the Peruvian side of the border shares key geological features with Fruta del Norte but has had little modern day exploration and no prior drilling.
There has been very little modern day exploration carried out to date along the Peruvian side of the border due largely to past geopolitical events and restrictions imposed by the Peruvian government. Prior to 1992, for example, mineral exploration was not permitted along Peru's border regions. The mining code was revised in 1992 to permit mining in the frontier regions but a border dispute broke out between Peru and Ecuador shortly thereafter and was not resolved until 1999.
Gold-bearing rock outcrop and float was originally discovered on the Condor de Oro property in 2003 and was followed by stream sediment, soil and rock sampling as well as an airborne magnetic geophysical survey. This work was performed by Monterrico Metals plc, is not NI-43-101 compliant and therefore may not be relied upon, Monterrico's work reportedly returned highly anomalous gold and base metal geochemical results with a coincident magnetic high over an area of approximately 4 sq km along the western boundary of a large magnetic low. Artisanal placer gold workings occur within this area, since named Pucayacu. This large gold and base metals target was never drilled prior to October 2013.
The Pucayacu target is characterized by intense quartz-sericite-clay alteration along with abundant disseminated pyrite (plus limonite) and strong quartz vein stockworks with limonite-pyrite and secondary copper. Chalcedonic quartz and jasper are also present, these being products of multiphase hydrothermal activity in an intrusive related gold system, similar to that at Fruta del Norte. Previous sampling by Condor returned peak values of 13.2g/t Au in rock chip samples from outcrop, as well as 8.2g/t, 11.95 g/t, and 16.0 g/t Au from rock float, and soil samples with peak values of 1.56 g/t and 1.99 g/t Au.
The second target on the property, named Yuracyacu, occurs about 8 km northeast of Pucayacu. At this target, a zone of intense alteration and abundant stockwork quartz veins occurs along the northern boundary of a magnetic low and also exhibits a coincident magnetic high. Former artisanal placer workings are also present in streams draining the 4 sq km target. As in the case of Pucayacu, the Yuracyacu target has never been drill tested.
* "Reported reserves are inferred only, and from the websites and public documents of the Companies whose deposits are mentioned."