The final recovery report is expected before the end of 2013 and will assist in finalising the operating conditions and profit share agreement with Lacerta Finance and Mining for production and processing of Marianas iron ore.
"The bulk sample is an important step in operationalizing the Marianas Magnetite project and we will have the sample processed in a commercial plant by the end of this year," managing director Glen Darby said.
"Marianas is showing improved economics over what was previously estimated and we will confirm this when the detailed recovery report is received in a few weeks."
Lacerta Managing Director Robert Turkington said that based on its site visit and ongoing discussions with Condor Blanco, it believes the bulk sample will prove the project to be highly robust.
Under the agreement, Lacerta would relocate their magnetite plant and mining equipment directly to the Marianas Project.
This would produce an initial 10,000 tonnes a month of ore with permitting allowing for production of up to 60,000 tonnes of concentrate.
Lacerta will be remunerated as Condor Mines official `operator' through an agreed fixed percentage of profits generated by the project that is currently being negotiated.
Condor Blanco added the mobile150 tonne per hour processing plant it had deployed earlier this month is now on site and fully operational.
The company plans to commence processing an initial 5,000 tonnes per month from January 2014.
Leased from a local operator, the plant could provide a low cost processing method with pilot mining possibly generating cash flow whilst environmental approvals for the commercial scale project are finalised.
Condor will run tests on this machine whilst completing the bulk sample and is high confident that it will be able to meet the pilot mining target of 5,000 tonnes per month.
"In the lead up to finalising the environment approvals this mobile processing unit will allow the company to generate cash flow in the short term," Darby said.
"After the holiday period, we plan to have this processing unit operating on a daily basis."
The company has also formalised a definitive agreement to increase its ownership in Marianas to 100%.
It is seeking debt funding to meet the acquisition cost of $2 million and is already in discussions with a number of interested parties in the Middle East. This is expected to be finalised early in 2014.
This acquisition will potentially provide Condor Blanco with significant cash flow over the coming years, allowing it to self-fund the exploration of its world class Chilean copper and gold projects.
Darby added that seeking debt funding would minimise dilution and would not only utilise Marianas cash flow more effectively but also fund an enhanced exploration program.
"This will assist substantially in current and future project acquisition"
Completion of testing on the bulk sample will provide Condor Blanco Mines with the basis to finalise the operating conditions and profit share agreement with Lacerta Finance and Mining.
This will in turn allow for bulk production and processing of Marianas iron ore.
In the meantime, the company is all set to start pilot production using the mobile processing plant, which could generate short-term cash flow ahead of securing the mining permit to increase production.
Debt funding discussions are also progressing and would accelerate exploration and development once confirmed.
With production set to begin soon, the company's market cap of just $1.67 million looks light.
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