Update: Marianas Iron Tailings Project, Chile.

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1 19 December, 2013 Update: Marianas Iron Tailings Project, Chile. ASX Release Stock Code: CDB Highlights Marianas Iron Tailings project 200 tonne bulk iron ore sample being processed with final results due before the end of Mobile processing plant now on site and fully operational with plans to commence processing of 5,000 tonnes per month from January Definitive agreement signed to acquire 100% of the Marianas Iron Tailings project, Chile for $2,000,000. Finalisation of Bulk Sample With 2013 drawing to a close, Chilean focused Condor Blanco Mines Limited (ASX: CDB; Condor, the Company ) is pleased to announce that the testing of the 200 tonne bulk iron ore sample from the Marianas Iron Tailings Project is nearing finalisation. Managing Director Glen Darby commented 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. 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. This recovery report will be used to assist in finalising the operating conditions and profit share agreement with Lacerta Finance and Mining Spa ( Lacerta ). As announced on the 3 rd of October 2013, Condor entered a non-binding agreement with Lacerta for the production and processing of iron ore to be produced from Marianas. Lacerta Managing Director Robert Turkington stated that We look forward to the finalisation of the bulk sample. From site visit to the project and our ongoing discussions with the Condor board, we believe the bulk sample will prove the project to be highly robust. Chairman s Site Visit On 12 th December Condor Chairman, Dr. Paul Crosio, travelled to Copiapo, Chile to join Managing Director Glen Darby and visit the Marianas Iron Tailings project. Dr. Crosio commented on the excellent progress on the project and the potential that this quick start project holds for the company. Dr Crosio commented My site visit to the Marianas Iron Tailings project has been extremely positive. With the bulk sample nearing completion, I ll be staying in Chile for an additional week to ensure that there are no impediments to finalising this important sample process by the end of this month.

2 Mobile Processing Unit Deployed to Marianas Iron Tailings project, Chile As announced on the 12 th of December 2013, a mobile processing unit was deployed to the Marianas Iron Tailings project, Chile. Leased from a local operator, the processing machine could provide a low cost processing method, pilot mining can generate cash flow whilst environmental approvals for the commercial scale project are finalized. Capable of processing up to 150 tonnes per hour, 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. Managing Director Glen Darby commented 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. After the holiday period, we plan to have this processing unit operating on a daily basis. Image 1 & 2 (left to right) Operators on site at the Marianas Iron Tailings project, Chile finalizing the 200 tonne bulk sample. 2

3 Definitive Agreement Signed to acquire a further 50% of the Marianas Iron Tailings Project, Chile On the 17 th of November, the Company signed a definitive agreement to acquire 100% of the Marianas Iron Tailings project. Under the agreement, this acquisition will be completed within 7 months on the payment of $AUD2,000,000. The formalisation of this definitive agreement followed from the initial option agreement which was announced on the 18 th of November Condor Chairman Dr. Paul Crosio commented The finalization of the [Marianas Project] acquisition agreement is positive step for Condor. After seeing the bulk sample being processed, I was reassured of the projects viability. After reviewing the project economics, the acquisition of 100% of this project is certainly in the best interests of the shareholders and the company To fund the acquisition cost of $2,000,000, Condor will be seeking debt funding. With discussions already in progress with a number of interested parties in the Middle East, the company aims to finalise this funding early in 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. Managing Director Glen Darby commented By seeking debt funding the remainder of the Marianas project we ll not only be able to minimise dilution, utilize Marianas cash flow more effectively but also fund an enhanced exploration program. This will assist substantially in current and future project acquisition Image 3 (left to right) Condor Chairman Paul Crosio, Eduardo Fuentes and Jose Bahamondes after finalizing the acquisition agreement. 3

4 The Marianas Project The Marianas Project is a tailings retreatment project, which exploits a combination of positive metallurgical, economic and environmental aspects. The magnetite-bearing historical tailings within the city of Copiapo in northern Chile. The Marianas project will provide a rapid start up, fast-payback, low-capex, cash-generating project to support Condor s overarching strategy to develop its large and highly prospective projects. The tailings are dry and occupy a series of connected impoundments over a contiguous area of 24ha (figure 1 below). This significant resource has attracted the attention of a number of assessments in the past with significant bulk sampling being conducted by adits, trenches and pits. However the inability of previous companies to amalgamate the titles under a single entity precluded the exploitation of the Marianas resource until now. Condor Blanco has succeeded in being in a position to exercise an option to acquire the entire resource. Figure 1: Location of the Marianas Magnetite Tailings Project The project is favourably located with respect to access to ports, power, water, experienced workforce and engineering support. In addition to being amenable to very cheap mining and treatment by magnetic separation to produce a high grade, direct marketing magnetite concentrate, the tailings also contain potentially economic extractable concentrations of gold and molybdenum. The feasibility of commercially extracting these additional minerals through secondary processing will be the subject of a separate feasibility study once magnetite production is underway. 4

5 The Company looks forward to updating the market in the New Year and wishes all shareholders a Merry Christmas and a safe and happy holiday season. For more information, visit or contact: Mr Glen Darby Managing Director Condor Blanco Mines Limited Office: +61 (22) info@condormines.com 5