Cordoba Minerals (TSX-V: CDB) CEO Mario Stifano on Updated Mineral Resource at Alacran & the Potential for More Copper-Gold Discoveries in the San Matias District

March 5, 2018

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

Mario Stifano: Very well, Gerardo. Thank you for having me on your show again.

Gerardo Del Real: Thanks for taking the time. I know you just got back from BMO, where there was a lot of interest on Alacran due to the recent resource estimate.  I know you're under the weather a bit, so thanks again for your time today.

Mario Stifano: Oh, my pleasure. Look, you're right. BMO is the world's biggest mining conference, head and heels above everything else out there. Our schedule over the three days that we were at BMO was jam-packed. We've gotten tremendous interest from every walk, whether it's strategics to private equity to regular equity investors. I was quite pleased at the level of interest Cordoba received at the BMO conference.

Gerardo Del Real: Excellent. Listen, on February the 26th, you provided a very anticipated updated mineral resource estimate for the Alacran deposit. I'll briefly summarize some of the details there. You had over 800 million pounds of copper; 454 million in the indicated category, 365 million in the inferred category. The market responded by sending your stock to 52-week lows. I know that some of the more vocal critics of the estimate frowned upon two things. One was less tonnage than anticipated, and the second was a drop off in grade. 

I know there's reasons for both of those, but I'd like to talk about the numbers, and then I'd like to put into perspective a bit, what the strategy has always been for Cordoba, in regards to Alacran, and then the district, which I think is where a lot of people are seeing the trees instead of the forest here.

Let's talk about the updated resource estimate. What can you share?

Mario Stifano: So you're correct. We came in slightly under 70 million tonnes at around 0.7% copper equivalent. From the resource side, we added another 30,000 meters of drilling, approximately, from the primary source. So we did quite few holes at Alacran. We understand this deposit significantly more than we ever did a year and a half ago. We really are starting to understand what Alacran is about.

In terms of the drop off in grade, a couple of factors had an impact on grade. Firstly, the carbonate base metal veins. It's those high-grade veins that we've intercepted over 600 meters of strike. The highlight carbonate base metal vein, of course, that the market focused in on was the 4,000 gram gold, 10% copper and 25% zinc over just under a meter intercept. Those carbonate base metal veins were basically capped at 1 gram per tonne. The reason for that is most of our drill hole spacing at Alacran is about 60 meters, up to 100 meters. That's what's needed to get into resource, but these carbonate base metal veins, being 1 meter in width, require a lot more drilling to really understand the full extent of these carbonate base metal veins. As a result of not having really tight spaced drilling around the CBMs, Amec, which is probably the most conservative firm out there for doing resources and PEAs, they capped everything at 1 gram ton gold.

So from our perspective, these carbonate base metal veins are very real because we've intersected them. They're very real because artisanal miners in the area have been mining them for 30 years. But unfortunately we didn't really include the full impact of the carbonate base metal veins in the resource. So eventually when Alacran is mined, then I think you'll start to get some gold upside, but that's just not currently reflected in the resource. We see lots of upside on the gold content in our resource.

The other aspect of the resource that had an impact on grade was the village area. So previously, in our first drill holes, we weren't able to drill through the village. We were able to drill through the village at around hole 36, that we started drilling in the village area. Unfortunately we hit gold, and we hit copper but not to the same widths that the prior model predicted. And it was a fair model because based on the holes we've seen in other areas we felt the high grade would continue through the village area, but it didn't. We got some high grade but not of significance so that had an impact on the gold and copper grades.

But keep in mind we've got over a billion pounds of copper equivalent, here in our resource, at a 1:1 strip ratio. This is working out to be an economic resource. This is the kind of resource that mid-tier and smaller companies, like ourselves, really like because this is a resource that is not going to require a significant amount of Capex to get into production. Our focus in this district has always been to prove that we have a district and a camp. If you looks at mining camps in Canada or Australia or even in the US they're always built off an initial discovery that can support infrastructure. I.e., how do you build a mill off the initial discovery?

We think Alacran will support a mill, and once we have the mill and Alacran in production in the future, that means every other ounce of gold we find, or every other pound of copper that we find in this district, is going to have extremely high IRR, because we no longer have to pay for the infrastructure. It's all there. This is how you build these 40, 50 year camps or 100 year camps is by finding the best land, the most prospective land for copper, gold or whatever mineral you're looking for – in our case it's copper-gold – and getting the infrastructure in place so that you can build a long-term vision for your camp. That's always been our vision here.

Gerardo Del Real: Excellent. Now, Mario, let's talk about the rest of 2018. Obviously I see that there was, a part of the news release, you took a million dollar loan from HPX. It's clear that nobody's happy with the share price where it's at. But it's also clear that you don't want to finance at these levels, am I reading that correctly?

Mario Stifano: That's correct. We could always go out and raise equity. We've got one of the biggest supporters in Robert Friedland. Even at the BMO conference, to give you a sense of how supportive HPX and Robert Friesland are of Cordoba. On the Tuesday evening there's a core shed where BMO selects 15 companies out of well over a couple of hundred that are at the conference to show their core. Robert, towards the end of the evening, came down and spent almost an hour at the Cordoba shed answering some questions. To me that was extremely supportive. I was quite happy that he did that because it reinforces to people that Robert is heavily invested in Cordoba and very supportive of Cordoba.

In terms of financing, as you mentioned, I'm not comfortable financing at these levels and that's why I reached out to HPX and said, "Look, let's give ourselves time here to figure out what is the best way to continue supporting our long-term vision here at Cordoba." There's lots of options available to us that we're exploring. HPX agreed even though they probably would have loved to have done a financing and taken a bigger chunk of the company. But from the CEO perspective looking out for everyone's interests I wasn't comfortable doing a financing at this level. So HPX agreed to provide Cordoba a short term loan. And if I need more money from HPX I'm sure they will continue to be there to support Cordoba because Robert Friedland is our single largest shareholder and he wants to ensure that Cordoba and, as a shareholder of Cordoba, that we're all successful here.

Gerardo Del Real: Excellent, obviously defining the potential economics of Alacran is going to be an important milestone for Cordoba in 2018. A PEA I understand is a part of the second half plan for Cordoba. Is that right, Mario?

Mario Stifano: Correct. Now we've got a dual focus. We're confident that Alacran is showing potential to be an economic deposit. We intend to work on a PEA for the second half of 2018. But now that we've done quite a bit of drilling at Alacran, we've got a good definition of what the deposit could be. It is still open, just to be clear here. There is mineralization in the southern end at depth that didn't make the Whittle pit. There's some work there that could be done to extend the pit design to include some of that mineralization into Alacran.

As well in the northwest of Alacran, it's open to the northwest and downdip. For example, one of our last holes there, we found a new style of mineralization where we got 1.13% cobalt and 12 grams gold over a meter. We don't yet understand how that fits into the overall Alacran deposit. Are we on the perimeters of another deposit? Or a change in the type of system? Which shouldn't surprise us because northern Alacran is slightly different than southern Alacran. Carbonate base metal veins are quite new to the regular Alacran-style. So we've still got a lot more work to understand Alacran, but we're learning after every drill hole what is the potential of Alacran.

The second half of the year is now going to focus on working up some additional targets at the San Matias district. I want to make clear to everyone the reason why HPX and Robert Friesland came into this district was the potential that we saw for copper-gold discoveries. We've only touched less than 1% of our land package. We've got over 2,000 square kilometers of ground. Right now our geologists are on the ground working south of Alacran, because we think the Alacran-style mineralization will continue further south, and they're also working to the east of Alacran where we think we have a porphyry.

We had one of the best-known geologists in the world, Dick Sillitoe, come to site. Dick has been around forever. He's probably seen every major project all over the world. Dick is right at times and sometimes he's wrong. For our district basically what he told us is he thinks we've got two styles of mineralization, which is quite exciting. He thinks we've got an IOCG belt, an oxide copper-gold belt, which is Alacran. We should continue to follow that further south because these types of deposits do not form in isolation. And then he thinks we've got a porphyry belt to the east of Alacran. He said if you're looking at an area that our district is similar to, he said it's similar to the coastal belt of Chile and Peru, which is pretty exciting because there you see IOCG and porphyry side by side. We know, for our district, it's quite different than everything else in Colombia because we're in Cretaceous rocks vs. the middle part of Colombia is in Miocene.

This is a brand-new style of mineralization that Cordoba's never been explored for in the past. We're really excited with what we have. Our geologists are on the ground working up some targets. We anticipate in the second half of the year we'll start being able to drill out some of these new targets.

Just to remind everybody that there's more to this than just Alacran, which we think is going to be a nice backbone to start the production in the district. But hopefully we'll continue to find more Alacran-style mineralization and porphyry mineralization. This is why we're all here. As I said, we've probably got one of the best land packages in all of Latin America. I know we know that. I know Robert Friedland and HPX know that. I know now that others see it as well based on the level of interest I received at the BMO conference.

Gerardo Del Real: Excellent. Well, Mario, I want to thank you for taking the time again. I know that you're under the weather. Thank you for taking the time to clear some of the finer points of the resource estimate up, as far as the grade and the metal that was lost, and providing a good overview of what's to expect through the rest of the year. Again it is worth reminding, I've been to the property, the strip ratio for the Alacran deposit is excellent. I know that metallurgical work is something that you're going to be focused on to make sure that we check that box off. The district scale potential is really fascinating and it’s hard to explain in an interview, if you haven't been to the property. This is definitely and always has been a district play. Anything else that you'd like to add to that, Mario?

Mario Stifano: That's exactly it. Alacran is just the start of what we think is in this district. It's one deposit that we hope will be multiple deposits when we're all said and done. Even Alacran, we hope it’s going to get bigger and we expect it to get bigger, but Alacran's got over a billion pounds of copper equivalent. We are, as a team and as a group, extremely bullish on copper. For every $0.50 rise in copper prices here, and it doesn't take much, that's a 15% increase in the current copper price, that would generate another half a billion dollars in revenue that goes right to the bottom line of our project.

So we know, and we're very confident, that under current prices Alacran will be economic and we're going to try and show that with the PEA. But with higher metal prices that we are anticipating over the next 12-36 months, Alacran may be a very special project and it'll help anchor our district so that we can bring other deposits and discoveries into production in the future.

Gerardo Del Real: Well that's a lot of upside considering you currently have a market cap of approximately $49 million Canadian, if I'm not mistaken.

Mario Stifano: Crazy. Absolutely crazy from our perspective.

Gerardo Del Real: Well that's the opportunity. Mario, thanks again for coming on.

Mario Stifano: Yeah, exactly. Thank you, Gerardo, always happy to join you.

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