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Lucero

Prospective for: Gold/Silver

Update:

On November 18, 2015 the Company announced it had concluded a production royalty agreement with Compañia Minera Casapalca S.A. ("Casapalca") a private Peruvian company on the Lucero project. Under the royalty agreement, Casapalca will pay a net smelter royalty of 3%, subject to an annual minimum of US$75,000, payable in advance. If the price of gold exceeds US$2,000 per ounce, the royalty increases to 4.5%, and conversely, if the price of gold is below US$1,000, the royalty will decrease to 1.5%. Casapalca is obligated to complete a minimum of 1,000m of diamond drilling on the project within one year of obtaining the necessary permits.

Casapalca has not commenced production at the Lucero project.

In January 2017, Sandstorm Gold Ltd. purchased a 50% interest in the Lucero NSR.

Location:

The Lucero property is located in the Chila Range of southern Peru, is approximately 130 kms northwest of the city of Arequipa and 600 kms southeast of Lima. The property is in the Chachas District, Castilla Province of the Department of Arequipa, about 22 kms southeast of Buenaventura's Orcopampa mine.

Ownership:

The 21 sq km project was acquired by staking and is 100% owned by Condor.

In January 2017, Sandstorm Gold Ltd. purchased a 50% interest in the Lucero NSR.

History:

The Lucero property covers what is known as the Shila Mining Camp, which includes several precious metal vein mines, of which the Sando Acalde, Pillune and Apacheta-shila were among the better known. These mines were operated by Buenaventura from the late 1980s to 2005. The extracted ore was processed at a small plant east of the concessions and during the last five years the reported production averaged approximately 20,000 ounces of gold and 470,000 of silver per year at grades of 15 g/t gold and 450 g/t silver. Historical mining was focused on low sulphidation vein deposits and there are also large epithermal alteration zones and gossans that have been identified on the property. To the best of our knowledge, only the veins have been exploited.

Signs of older workings indicate that the gold veins were known from well before, and were likely worked in colonial times.

A sampling program in late 2016 by an unrelated third party confirmed the bonanza grade precious metals reported from earlier mining operations, and reinforces our belief in the potential for Lucero to host additional reserves in the many structures (over 80 veins have been mapped at surface), and also in the prospectivity of the high sulphidation epithermal bulk tonnage target.

Geology/Mineralization:

High grade 'bonanza-style' direct shipping ore was mined here in the past from low to intermediate sulphidation quartz-carbonate (rhodochrosite) massive sulphide veins. Lucero is one of many areas of low-sulphidation epithermal Au-Ag deposits hosted in Tertiary volcanics of the Central Andes Cordillera of southern Peru.

Recent activity:

A third party sampling program was conducted in late 2016, under a confidentiality agreement with Casapalca and the Company. The sampling locations were dispersed over the concessions, and tested six different target areas. In total, 60 samples were taken and analyzed, with the majority (50) being outcrop channel samples. Most of the outcrop samples (forty-four of fifty) were taken at surface, while several of the outcrop samples (six of fifty) were taken from the wall rocks and mineralized structures inside the former underground workings. The balance of ten (non-outcrop) samples consisted of 8 grab samples take at surface, and 2 grab samples from inside the old workings.

From the sixty samples, reported gold values ranged up to 144 g/t Au, with 21 of the samples reporting gold values greater than 1.0 g/t Au.

Silver values ranged from 0.1g/t Ag to greater than 10,000 g/t Ag, with 23 of the samples reporting silver values greater than 50g/t Ag. Sample number 3938, a 1.8m rock channel sample taken at surface from the principal vein in the Sando Acalde area, reported 18.9 g/t gold, and greater than 10,000 g/t silver (the upper analytical limit of the laboratory analysis utilized).

Preliminary evaluations of the property by Condor's exploration team comprised prospecting the property and sampling other veins and structures, including the surface areas surrounding the above-mentioned former producing mines. Dr. Richard Culbert, Condor's Qualified Person, visited Lucero in 2011 and his sample results were consistent with Condor's sample results, in that the grades were as expected for a property that has supported mining via direct ore shipping. Comparison of Dr. Culbert's sample results with Condor's sample results also shows nugget effect.

The following table was prepared by Dr. Culbert:

Sample
g/t Gold
g/t Silver
Notes
Culbert 1
1.76
224
Sando Acalde ore sorting dump
Culbert 2
Condor 5706
17.2
0.2
969
14
Sando Acalde vein on surface
Culbert 3
Condor 5708
1.17
1.70
95
197
Quartz vein at 802120 East, 8293450 North
Culbert 4
Condor 4709
33.8
43.2
519
437
Pillune area, vein above old tunnel
Culbert 5
Condor 5710
2.3
2.3
74
68
Same area as Culbert 4, different vein
Culbert 6
Condor 5655
5.9
25.0
23
76
Calcite-pyrite vein at 802215 East, 8295638 North
Culbert 7
2.8
7
Vein float composite at 800625 East, 8297125 North
Culbert 8
32.2
3500
Baratina area, 3 small veins with sulfides, 801120 East, 8296890 North
Culbert 9
Condor 5715
30.1
33.4
842
860
Baratina veins
Culbert 10
Condor 5828
6.1
1.8
22
6
Baratina veins
Culbert 11
17.5
498
Baratina area, 801015 East, 8296885 North
Culbert 12
0.4
62
Pyritic material from shaft on no. 8 vein
Culbert 13
0.1
9
Siliceous sample from no. 8 vein. 801573 East, 8296825 North
Culbert 14
0.6
36
Similar to Culbert 13


During the preliminary prospecting work, an epithermal high sulphidation alteration zone with low sulphidation structures was identified on the property, and returned peak sample values of 33.4 g/t Au and 3,500 g/t Ag. This alteration zone, measuring approximately 1300m by 1400m in size, exhibits no evidence of prior sampling or drilling and is believed to host potential for a bulk tonnage disseminated gold-silver deposit.
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