Cordoba Minerals (TSX-V: CDB) CEO Mario Stifano on the Potential for More Alacran-Style Discoveries in the San Matias District

May 4, 2018

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Gerardo Del Real: This is Geraldo Del Real with Resource Stock Digest. Joining me today is President and CEO of Cordoba Minerals (TSX-V: CDB)(OTC: CDBMF), Mr. Mario Stifano. Mario, how are you this afternoon?

Mario Stifano: I'm doing great, Gerardo. Thank you for having me on your show again.

Gerardo Del Real: Thank you for coming back on. You actually had some news this week that I wanted to talk about because I thought the news did a really good job of portraying what the second half of the year will look like for Cordoba.

Like many of the juniors out there, the share price hasn't performed. It's been beaten down pretty good, especially considering the fact that you have an anchor asset at Alacran. This news release was really interesting to me because, for the first time, you talked about potentially supplementing using Alacran to potentially supplement a central milling facility. You and I have had conversations in the past. I know from outside sources that there's been private equity interest in Alacran, obviously at multiples of today's market cap.

I want to start by talking about the potential for Alacran to be a supplement for a central milling facility, and then later we can pivot into some of the new areas of potential deposits that could complement Alacran in this mill because obviously, this has always been a district play and that's been the goal from day one, was to outline resources, the multiple resources that exist at the San Matias district. Let's start with Alacran and the potential there.

Mario Stifano: That's a great point. When we came into this camp, we recognized we locked up a district. Our focus was to demonstrate to the market that we have a district. Alacran was our first real sizeable discovery. As the market knows, we have 70 million tonnes of resources at Alacran in measured, indicated and inferred at around 0.7% equivalent. But our view is always that there's more deposits in and around Alacran, and once we establish that backbone in the district ...

If you look at all the big mining camps in the world, and you know I have a lot of experience in the Timmins camp, I use that as a great reference point. Mining camps are always built off of the initial discovery that supports the infrastructure and the development and construction of the mill. Our focus when we went into San Matias was to find that backbone discovery, which Alacran we think is that backbone discovery, and we think there's real potential for Alacran to demonstrate economics to support a mill, and that's why we're going to preparing a PEA for the second half of 2018.

In and around Alacran, with our exploration work, we knew there were deposits but there wasn't an immediate view that any of these deposits would be 100 million tonnes immediately on their own, so we focused on building that big deposit, Alacran. Now we're going to start going back to those other discoveries that we had, that we think could add 10, 20, 30, 40, 50 million tonnes to our central milling facility at the San Matias district, which really drives a lot of value to the district.

If you think about it, if you already paid for your capital and your mill for Alacran, that means every pound of copper or every ounce of gold that you find in and around the Alacran area has high internal rates of return because you no longer have to pay for a mill. All you're doing is paying for it out of the ground.

To the east of Alacran, we drilled five holes in an area that we call Costa Azul. It's a copper-gold porphyry, right from surface likely one-to-one or even less than one-to-one strip ratio, very similar to Alacran. We're now going to go back there and test what the real potential of Costa Azul is. We see potential there for 10, 20, 30 million tonnes or even larger, because we haven't really followed up aggressively at Costa Azul. We drilled a few holes and we haven't followed up on any potential for down-faulted blocks as well as to the south and to the east, where we saw quite a bit of potential, because we were focused on Alacran.

To the north, we have the two Montiel porphyries. Those are very complex and our view there was, again, that you probably have a porphyry that's gotten broken up and we need to try and find where the rest of this porphyry is. We've got some ideas now in terms of where the porphyry could be and we're going to test a couple of holes there to test that theory. But we still see quite a bit of potential at Montiel for 100 million tonnes or greater, and our program for 2018 would be to continue to test it. Even if all we have is a 20 or 30 million tonne resource at Montiel, again, that adds tremendous value to the central milling facility, because it's free Capex in the sense of, the way I always look at it, basically if you have 10 million tonnes of resources at around 0.7% copper equivalent, that is almost half a million ounces of gold equivalent. That adds huge value to a central mill.

Creating value for shareholders for us is going to be a two-pronged approach, which you now alluded to. Continue to build resources around Alacran to support a large mining infrastructure and produce quite a bit of pounds and ounces of gold at this central milling facility, while we also now start looking for the regional exploration play that we continue to see in the south as well as gaining ground at Alacran.

Gerardo Del Real: Just to be clear, Mario, the Costa Azul copper-gold discovery is the top priority target for the near term resource addition outside of Alacran. Is that correct?

Mario Stifano:                      For near term resource, it would be Costa Azul, because it's right next door to Alacran. It's about a kilometer away and it's open in all directions and we got some pretty good grades there. 60 meters of 0.6 copper, 0.6 gold. I mean those are some pretty good, nice intercepts with some nice grade to it. Because it's open, we think we could add quite a bit of tonnes at Costa Azul to supplement the Alacran resource.

I want to remind the market, Alacran is still open as well. We still see potential to increase the resource at Alacran. It's 70 million tonnes now, but it is open to the north and to the northwest. Gene Schmidt, who's our new geologist, who is now at site reviewing Alacran, and part of his objective there as well is to find out, where else is Alacran open? Because we do see some areas in the central part of the deposit that remain open.

We still haven't really drilled any deep holes at Alacran. The reason for that is we're still trying to work out what the geological model is for Alacran, because that will help us drive where we put a couple of more holes into this deposit. We've always called Alacran an Alacran because it doesn't fit a typical geological model, whether it's a replacement, i.e, it's porphyry related, or an IOCG, which some geologists think it is, or a BMS, which now some geologists think Alacran could be.

Each of those exploration models and deposit models have different ways of how to explore Alacran, so we're starting to form a stronger view of what Alacran is and see more of that coming out in the coming months. As we now move further south of Alacran, we're starting to see similar type of mineralization that could be an Alacran-style deposit.

As we move about two kilometers south of Alacran, we alluded to this, and it's called La Capitana. It's actually one of our priority targets as well. There's a large zinc and maganese soil anomaly. It starts around 50 meters below surface, but it gets much more size more around 300 meters below surface.

There is a large IP anomaly there that was identified by Typhoon, which is the HPX Robert Friedland technology. We want to drill that target because it's an obvious target to drill, and it looks similar to Alacran from the geophysics. As we move further south and La Capitana was sort of the edge of the limit of what we ran our Typhoon technology on.

As we move further south of Alacran, we've got another area that we're calling Willian. This area actually has a fairly sizeable alteration zone, which is quite exciting because it has exact same host rocks as Alacran. So we think there's real potential there for there to be another Alacran style deposit and we're seeing mineralization, we're seeing some high-grade mineralization. We found now in outcrop that was around 2% copper, so we're in an area, we think, that has real potential to host another Alacran style deposit. This, again, is what districts are made of. It's very unlikely that Alacran is the only sizeable deposit in this area. Usually, we try to highlight this in the market. Guys, remember we're here, it's still in very early days of exploration at San Matias. As our geologists spend more and more time on the regional field, we're pretty confident we're going to find more deposits.

You were saying in the second half of the year and where we're moving to, so I talked a little bit about the Alacran and the central mill and finding deposits in and around Alacran. But as I've indicated, we think there's real potential for deposits south of Alacran. Now in the porphyry trend, we're finding this to be quite exciting.

Buenos Aires, which would be just south of Costa Azul, which we just chatted about. It's a porphyry, some good grades, right from surface. As we move about a kilometer and a half, two kilometers south of Costa Azul, we got another porphyry target or could be a porphyry target. We're still working out whether exactly Buenos Aires is. But again, this is another area where we've got 7% copper in an outcrop, around 2% copper in another outcrop. We're seeing three structures there now, which is quite exciting. We don't know what the source of Buenos Aires is. Is it a deep seeded ore body or is it a near surface type deposit? We do see some subtle IP at depth, so it's quite exciting for us.

As you move about a kilometer south of Buenos Aires, we got another porphyry center that we're calling Caño Pepo. Again, we got some really good gold in a trench, around three grams to just under four grams gold with about a half a percent copper in a trench, which is quite exciting. That was just the very first trench that we opened up, so it's telling us again that we got another mineralized segment building up at Caño Pepo.

Then as we move about a kilometer south of Caño Pepo, another new discovery that we're calling Mina Ra – we've known about this area for some time, but we never had a chance to get out there. There's some artisanal miners that have been mining there for a while and Cordoba is very careful to ensure that whenever we work in an area, we have social support of the local communities, the workers, whoever's in an area wants us to be there. So we've been spending a good, over a year building support in the southern part of our land package.

We got a massive land package, so this is not a situation where we could really explore this whole land package in a year. We got 20,000 acres at San Matias and 200,000 acres all around San Matias. So we now have, we think, the strong local support for us to do exploration at Caño Pepo and Mina Ra. We tested one of the veins at Mina Ra, that the artisanal family was mining, and we got 70 grams gold and 0.5% copper over .35 meters ...

Gerardo Del Real: Wow.

Mario Stifano: ... in the first thing that we sampled. What's interesting about Mina Ra – and a lot more work needs to be done here – but the geologist, Hector Vargas, who worked at Alacran, remember we bought Alacran in 2015. When we bought Alacran, he worked, believe it or not, in the 1980s for a Canadian public company called Dual Resources.

Dual Resources was TSX Venture company. They were drilling at Alacran in the early 1980s and they also drilled to the west of Mina Ra. According to Hector Vargas, they drilled a porphyry there, and a sizeable porphyry. We haven't found that as of yet, we just started working our way down south. Hopefully, there is a porphyry there based on his recollection.

What I'm trying to allude to the market here and your readers and subscribers is there's a lot going on geologically at our San Matias district and we really think we have potential to find multiple deposits in addition to Alacran. This is how you build large, long life mining companies. They're built off of districts. A lot of juniors, they have a small piece of a district, or for majors, they have one part of a district and they got to spend a good chunk of their years trying to consolidate an overall district. We locked it all up.

No other mining company can step foot into this area because we were the first and only miners in this northern part of Colombia. So we think for long-term, patient investors, you have a chance to invest in a company, which is Cordoba, that has access to a mining camp. Alacran, we think is economic, and the PEA will demonstrate whether it's economic or not. We'll have that ready for the second half of the year, but if Alacran is economic, and you can support a mill at Alacran, all of a sudden you've got a really valuable district here. Because we think you're going to find more and more deposits as we spend more and more time exploring the San Matias district.

Gerardo Del Real: Well, for those of us that were following the company when it was 15, 20, 25 cents and saw it surge to $1.50, and unfortunately that was a roundtrip. Let's be clear, it's been a tough ride, right? The roundtrip has been tough. However, I can't stress enough how early days it is.

I want to thank you, Mario, for coming down and explaining the district scale potential. We've talked about it a lot of times about how complex this system is. All the great systems are. They take a while to figure out, and I think you did an excellent job describing how early stage this is. This is definitely inning three of what I obviously believe is a nine inning game that we're going to see through.

Thank you so much for your time. I'm looking forward to having you back on as we get closer to actually drilling some of these exciting targets, Mario.

Mario Stifano: Thank you, Gerardo. When you're investing in junior exploration companies, the land package and the prospectivity in the long-run is what always drives the value. You got to have the geological potential underground for discoveries, and I think we have that at Cordoba and San Matias.

Gerardo Del Real: I'm looking forward to seeing you and the team unlock some more of it. It's a good start with Alacran. Obviously, the market hasn't recognized that but I think if the market sees that you have multiple Alacrans on the property – and I believe you do and I know you do as well – I think we'll start seeing a response. And I think the PEA in the second half is going to be a great catalyst to really outline the potential economics of just Alacran.

Mario Stifano: Exactly, exactly. For your subscribers who want to sort of look at a potential benchmark, have a look at a company called Atalaya, which is listed on the TSX and the London Stock Exchange. They’ve got similar size, two deposits very similar to Alacran and they're trading at $650 million. One asset's in production, the other one is a potential development deposit, but gives you a real sense of what Cordoba could be if we just develop Alacran. Forget about all of the other assets that we have in and around Alacran. We see tremendous value to our assets. The market will come around in time.

Gerardo Del Real Mario, thank you so much.

Mario Stifano: Thank you, Gerardo.

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