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Condor Blanco Mines Breathes New Life With Lead-Zinc-Silver Project Purchase

Condor Blanco Mines (ASX:CDB) has written a new chapter optioning an advanced Lead-Zinc-Silver project in East Turkey's Şırnak province that is already fully permitted with an approved Mining License.

Trial Mining is due to begin this month at the Uludere Project.

Any Lead-Zinc-Silver extracted from the trial will be sold to a local firm for processing at a nearby flotation plant. Off-take terms for this material have also been agreed.

A strong outlook for lead and zinc would have influenced the thinking to acquire the project, no doubt.

Condor will also gain an investment from a share placement effected by Condor worth A$473,829 arranged by Beaufort Securities Limited on behalf of Minesweeper Limited - a company incorporated in the United Kingdom.

The three stage binding acquisition option could see trial mining begin fairly shortly at the fully permitted project which would de-risk development.

Uludere Project

The Project is the subject of an unincorporated joint venture between two local Turkish companies Anatolian Madencilik (operator) and Bonus Enerji Elektrik Maden A.Ş (owner of the Licence). Anatolian Madencilik has signed the Project Agreement with the written consent of Bonus Enerji.

The Project sits on a granted Mining License in the Şırnak province. The agreement to acquire is with Anatolian Resources Madencilik Hafriyat Nakliyat Sanayi Ve Ticaret Limited Şirketi.

The license hosts high grade outcrops of Lead (Pb), Zinc (Zn) and Silver (Ag). The project hosts outcropping Lead-Silver and Copper-Silver mineralisation. Zinc, Copper (Cu) and Antimony (Sb) mineralisation is also present

The three part process would see Condor ultimately move to acquire the rights to the project from local owner, Bonus Enerji Elektrik Maden A.Ş. (Bonus Enerji), a local bulk commodity firm.

- Trial mining,
- Mining, and
- Acquiring majority title in the Şırnak Project.

Each step would have payment consideration attached.

The project would see a Joint Venture being struck with a local Turkish contract mining company appointed by Condor. This Joint Venture will act as the operator of the project.

Mining Rights Acquired - with purchase option

The three step process provide Condor with binding rights to mine the project, and lower risk, earn-in investment approach with the ability to acquire up to 75% of the license.

Stage 1: Trial Mining (6 month trial mining with binding option to mine): Condor will pay US$100,000 to Anatolian Madencilik to fund trial mining operations. At the time of such payment, Condor will also pay an option payment in the sum of US$50,000 or shares in Condor equivalent to that amount at an issue price equal to the average of Condor's shares over the last five days immediately prior to their issue or such other price as agreed by the parties, at its election, to Anatolian Madencilik.

This payment will give rights to Condor to participate in the Project for 6 months. Any revenues from trial mining to be split 50:50 between Condor and Anatolian Madencilik.

Stage 2: Full-scale Mining (2 years mining rights with binding option): If results meet Condor's expectations, Condor will, prior to the end of Stage 1 and if satisfied it wants to proceed with the Project, advance a further US$400,000 to facilitate commercial scale mine production at the Uludere Project.

In addition to this payment, Condor shall before the end of Stage 1 also pay a further option payment of US$200,000 to Anatolian Madencilik, should Condor wish to continue to proceed with the Project.

As consideration, Condor will gain the exclusive right to mine the Tenement for a period of 2-years from the date of such payment with a right to acquire 75% of the Tenement during the Acquisition Period.

Condor can extend this period by further 1 year in consideration for a further payment of US$200,000 to Anatolian Madencilik. Revenues from mining from the Tenement will be first applied to repayment of expenses incurred by Condor. Profit (after repayment of Condor's expenses), will be split 50:50 between Condor and Anatolian Madencilik.

Stage 3: 75% acquisition of the Tenement by Condor: If Condor wishes to acquire a 75% ownership of the Tenement it must during the Acquisition Period pay the sum of US$3,000,000 to Anatolian Madencilik. Upon exercise of this option, Condor will own 75% interest in the Tenement, subject to local government approval. If such approval is not provided Condor may withdraw from the Project and the Exercise Price will be returned to Condor. Upon completion of the Acquisition, a joint venture shall be established between Condor and Anatolian Madencilik on the terms of the Project Agreement.

Trial Mining could commence this month

The project is relatively advanced, with all necessary approvals for mining already granted.

This could see Condor commencing trial mining this month given that permitting allows for both open-cut and underground mining and includes the three required approvals for mining to commence:

Mining License (İşletme ruhsat): Granted by the Mining Department (MIGEM). This allows mining activities to take place on the license. This has been granted in response to the lodgement of a technical report outlining completed exploration and an outlined mine plan.

Environmental Approval (ÇED): This is the environmental and forestry department approval for mining on the property. This is granted having demonstrated that the works proposed in the mine plan are consistent with legislation (i.e. that they meet environmental requirements). In this case the mining here was found to be of low environmental impact, and so a full Environmental Impact Statement (NYSEARCA:EIS) was not required. The environmental approval was consequently granted and includes a government warranty that no EIS is needed.

Mine Site Approval (Madencilik faaliyetleri ruhsat): Granted by the Governor (Vali) of the state of Şırnak, this is the approval to operate a mining operation on the site. It allows necessary construction of facilities, roadwork and labour activities to take place.

The trial mining will open several sites of outcropping mineralisation to allow the planning of commercial scale mining to be completed.

Lead-Zinc-Silver can be suited to a relatively low capital expenditure mining approach, on selectively mined ore that is sold to local processing facilities.

Condor's managing director, Glen Darby commented: "We are very pleased to have finally reached an agreement over the Şırnak Project. This is a region which I first visited in 2008, and I'm glad we've been able to get some of the same contractors involved here.

"Turkey is an economically strong democracy in an under developed mining region. Turkey's NATO membership and advanced military provide a firm operating environment that many other countries in the region simply cannot match. I believe the Project has the hallmarks of adding significant value to the Company."

Placement Completed

Condor has also today signed a share investment agreement with Minesweeper Ltd, a company incorporated in the United Kingdom. Under the agreement, Minesweeper agrees to advance or subscribe for Shares in Condor equal to a minimum of A$300,000 up to a possible maximum of A$3,000,000 if agreed by the parties subject to the agreement.

Condor has also today placed shares in Condor equal to A$473,829 via the agreement to Beaufort Securities Limited, a UK-based broker, representing Minesweeper.

The proceeds of this placement are to be applied to investment in the Uludere Project and Condor's ongoing expenditures in Chile. This placement, demonstrates the ongoing support for Condor's evolution from explorer to cash flow producing miner.


The current Condor Blanco market cap is circa $1.8 million is undemanding, valuing it at little more than a listed ASX shell. Hence the planned acquisition of an advanced, fully permitted lead-zinc-silver project with immediate potential for trial mining has to be share price accretive for Condor by deduction.

Zinc and lead prices have been strong over the past 6 months. So the acquisition ticks this box. While country risk is there, this could be argued the same for many countries that were not thought of being high on the scale a year ago. Condor has also had an involvement in Eastern Turkey for some time.

The structure of the three stage trial and then full scale mining and ultimate project acquisition would seem to mitigate risk as far as is possible, for Condor.

An early start to trial mining and negotiating a successful off take agreement, are milestones that would lift Condor valuation.

In all, the deal breathes new life into Condor, providing investors with potential for significant share price upside from $0.003.

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