Categories: Base Metals / Precious Metals
Topics: General Base Metals / General Precious Metals

Cordoba Minerals (TSX-V: CDB) CEO Mario Stifano: Alacran is Growing into a Great Copper-Gold Deposit

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

Mario Stifano: Very well, Gerardo. Thanks for inviting me on your podcast again.

Gerardo Del Real: Absolutely. It's been a busy couple of months for Cordoba. You just announced that you completed the transaction with High Power Exploration and you also completed the conversion of subscription receipts in the $10 million offering. Can we talk about that? How did the vote go and what are your thoughts?

Mario Stifano: Well, you know, what we've been trying to do with this new Cordoba that we restructured Cordoba with 100% ownership of San Matias is really to position the company for future growth and really allow us to go after our San Matias district. So we did receive very strong support from the minority shareholders. We got over 72% support in favor of the transaction, which is fantastic from a shareholder perspective. It's a great vote of confidence on the management team, the board, and our major shareholders that will be able to move Cordoba in the right direction.

In terms of the financing, that $10 million financing has closed and now we have a very strong treasury to really advance Alacran and our San Matias district for drilling in 2017 and 2018.

Gerardo Del Real: Excellent, excellent. The other piece of news that was out here recently was you actually reported some drill results that everybody had been anticipating. So I'll start off with as always I'll play devil's advocate. There were a lot of people that for lack of a better word were upset with the fact that it appears that the visible gold that we were all anticipating either didn't return the grades that we were hoping for or it actually wasn't sent in for assaying. Some of the bulletin boards had some pretty colorful language in regards to that. Can you explain what happened with that there, Mario? And then I'd love to talk about what Robert thought about the drill results, because I know he was at Sprott Conference and Mr. Friedman was very, very vocal about his support for the latest set of results and the plan moving forward.

Mario Stifano: Well, great questions, Gerardo. In terms of hole 63, which is the hole that had the visible gold. Anytime you drill a hole, the core is split in half and the geologists are supposed to randomly submit one half of the core for assaying and the other half is supposed to be retained. In this particular case, it appears that the half that was retained had the visible gold in it, but the core that was sent in came back with coarse gold, which is telling us we have free gold and we now have over 600 meters of strike with coarse gold and now multiple occurrences of VG [visible gold].

And keep in mind at Alacran, we haven't really drilled yet any tight space drilling because we've been trying to identify the copper-gold mineralization at Alacran and some of these holes are 50 to 100 meters in spacing. To really drill and identify the gold resource, we would have to do much tighter space drilling, like 5 to 10 meter spacing. So we're not in a position to do that as of yet. But that being said, now that we've closed our financing and we are having our final plans for Alacran in place for drilling, we will do some drilling to extend Alacran. And that's a key focus for us, because in the drill results we just released, I'm not sure and I hope everyone picked up on it, we've now been able to open up Alacran to the south, which is significant in the sense that all the prior drill holes that were drilled in the southern part of Alacran were collared too far to the east and we recognize now that there's an offsetting fault to the west and we've now got to trace Alacran further to the south.

Gerardo Del Real: Excellent. Well that's important. Let me talk about some of the results, because they were very positive. You had 42 meters of 0.92% copper and 0.23 grams per tonne gold from 18 meters. So very good, high-grade copper for near surface. Hole 63, the one that people were upset about, had 30 meters of 0.66% copper and 0.69 grams per tonne gold from 78 meters. And hole 64 had 48 meters of 1.7% copper and 0.79 grams per tonne gold.

Now, I know that you're targeting an updated resource estimate for Alacran by year end and just me being an amateur and looking at the extensions and where the copper and the gold grades are going, just by connecting the dots with some of the drilling that you've done, would it be fair to speculate that there's a possibility that you may be able to double the resource, the current resource?

Mario Stifano: Well that's definitely a target of ours, to get Alacran to at least 100 million tonnes. Because I think once you deliver a 100 million tonne resource with the kind of grades we have, you've got a really special deposit at Alacran. And if you look at our initial resource that we came out with in January 2017, the 54 million tonne resource, there are areas within that, that within Alacran, within the pit shell that we just didn't have enough drilling in there to include into an inferred resource. And if we were able to drill out those areas, we basically would have had around 75 million tonnes. I can tell you we've drilled out those areas, so very confident that the Alacran resource will be a lot bigger than the 54 million tonnes and as I said 100 million tonnes would be a great target for Cordoba.

The reason why, if you look at this from a gold equivalent perspective, I can look at it from copper or gold, but I think it's a lot easier for investors at times to think of deposits in the gold basis. At 100 million tonnes at similar grades, we'd be approaching 4.5 to 5 million ounces of gold equivalent. All open pit, right from surface, extremely low strip ratio, in the middle of infrastructure, close to the port, everything you could want from an open pit mine is right there. We're approaching a pretty special deposit now at Alacran, which will really provide a significant backbone for Cordoba's valuation to the future. And once we add some other discoveries down the road, whether it's porphyries or other Alacran style deposits at San Matias, Cordoba is very well positioned to be a leader in the copper-gold exploration space.

Gerardo Del Real: Good. Now I know that Cordoba took a bit of a break from drilling. I assume that the drills will be turning again soon?

Mario Stifano: Yeah. After we announced the transaction, we shut down the drills until the shareholder vote. Now that the shareholder vote has gone through, the financing has closed, we anticipate starting drilling again, probably in the next three weeks. We're just finalizing all of our database. It's actually been quite useful for us to shut down the drills because we had been going pretty hard at Alacran and our San Matias district with all our exploration over the last 18 to 24 months.

It's given us a little bit of a break to sit back, look at the deposit, look at all the drill results, do some additional modeling and really start to understand where there's additional potential. And you know that southern extension that we've been able to identify now and drill has been really important for us and it's still open. So we can continue to expand the south and Alacran's going to get bigger, because we're basically already at 1.3 kilometers in strike. We think there's potential there for another 300 meters of strike, maybe more. Time will tell. We also believe that there's a potential offset to the north, another fault. Same scenario where we may have collared in the northern end all the holes too far to the west.

So, we see lots of potential to continue growing Alacran and we haven't even done any deep holes yet at Alacran. Most of the holes have been all shallow and we think, looking at a lot of the data, there is potential in this district to have sills, which means we get mineralization and you really get 10, 20, 30 meters of no mineralization and then boom, you're back into mineralization. We haven't tested any of these deeper holes as well as the concept of sills here. And any luck on our side and you find some depth extension, that 100 million tonnes is going to be a lot bigger, we believe.

Gerardo Del Real: Good, good, good. Now we had spoken previously and you mentioned that initially a good bulk of the attention would be focused on Alacran, rightfully so. But you also mentioned there would be some exploration drilling that would be done. Are you going to continue to look for other porphyries on the property?

Mario Stifano: Definitely we are. We're going to be looking along that Costa Azul to Buenos Aires trend because we see a potential there for a porphyry. We think that's where you may see somewhere world class style porphyry along that trend, because that trend is up to 13 kilometers. It starts at Montiel and it goes all the way down to a place we call Mina Ra where there's a high-grade vein system there that's been mined for 30 years that we haven't even gotten to exploring, but we believe there's a porphyry to the west of that because it was actually drilled in the ‘80s and one of the geologists who worked at the Alacran deposit back in the ‘80s for I think I'm going to call Dual Resources, told us that they drilled this in the ‘80s and they were looking for high-grade vein system and they found it at Mina Ra, but they also drilled a porphyry. So we got to get down there, we got to do some more work.

The key message here for shareholders, and I'm also a very big shareholder, we just got started at our San Matias district. Alacran's been a great find for us and it's going to grow and it's going to be a great deposit, but we think there's a lot more to this district than just Alacran. We're just getting started here. I like to reinforce to shareholders, exploration takes years. Especially when you've got a district like ours. Never expect that every drill hole is going to have a discovery, but you see lots of smoke and some bonfires like we have all over our district, we're pretty confident that we're going to find some sizeable deposits in the district in addition to Alacran.

Gerardo Del Real: Excellent. Well you just topped off the treasury with the recent private placement. What do you anticipate as far as burn rate from here on out? How long do you anticipate that money to last you?

Mario Stifano: Well our target is to, because we're going to continue to be aggressive, so that $10 million that we raised we expect to last us at least a year. And then after that we'll be able to go back to the market, we think at a much higher valuation, to raise some additional funds for the next drill program, as well as coming out with a Preliminary Economic Assessment at Alacran. Our target is to come up with a new resource by year end and off of that resource we're going to start to show the market what the real economics are for Alacran. And we think that'll be quite positive and has been very well received by the market as well as other larger companies. Because everybody out there is looking for copper-gold. Copper is really starting to take off. It has broken out, we're approaching $2.90 a pound. I think personally we're just at the beginning of this copper run.

If you go back, and sometimes history likes to repeat itself, but you go back into early 2000 during the tech boom, in many respects you could say we're in a tech boom right now as well. So when I was at Noranda, I recall copper being extremely weak and started to take off with China's growth. And if you look at today, China just exceeded their recent GDP estimates and that's probably why you're starting to see copper starting to build from these levels. We're approaching $2.90 a pound, but I think personally we're just at the beginning of the copper run and there's not a lot of copper explorers out there.

So from Cordoba's perspective and investor perspective, if you want exposure to copper, you've got the big players out there, but there's really no exciting junior players. I think Cordoba is the junior play out there for copper exposure and as well because we have gold at Alacran, you also get the benefit of a gold credit. So I think Cordoba is very well positioned to take advantage of what we think will be a pretty sizeable commodity run here.

Gerardo Del Real: You were in Vancouver for the Sprott conference, what was the sentiment there, Mario?

Mario Stifano: Look, I think this was a fantastic conference. As you're aware, Sprott did put quite a bit of money into our financing, so they're a very big supporter of Cordoba. This conference was so well attended by a few institutions, but it was really a retail show and the amount of retail investors there was just overwhelming. The interest in gold obviously, because retail is always interested in gold, but more particularly copper plays. People are looking for the next type of commodity.

Gold has been out there for a while and all the other metals, whether it's cobalt to zinc or in our case copper, has really underperformed what people think it will be in the next 3 to 5 years. And we see within our group a significant shortfall in copper starting in the 2020 range. You sit back and look at all the electrical vehicles. You know, Tesla to what China is doing. There's going to be tremendous demand for copper and there's just not a lot of copper exploration plays out there, and if they are, they're extremely low grade or they're just massive Capex projects where you've got to spend $5, 6, 7, 8 billion dollars building a project.

At Alacran we've got a great deposit in the making and what we also think will be a low Capex, which is ideal for any investor, as well as large mining companies looking to get exposure to copper.

Gerardo Del Real: Have you seen interest from any mid-tiers or majors that are looking at Alacran in San Matias as a possible vehicle in the future for copper?

Mario Stifano: Well, look, one of the reasons why we wanted to do this consolidation, to really simplify the structures, because when we're looking down the road to develop Alacran, having 100% ownership of a project is much easier if you do the right deals to create shareholder value than it is under a joint venture structure. And from our perspective, when we're ready to develop Alacran, we may look to bring in a strategic shareholder, whether it's the Chinese, whether it's the Japanese, or whether it's another publicly traded mining company. And yes, to answer your question, we always get calls and inquiries from other companies. Particularly now that we're 100% owned it's even more interesting for companies because the JV structure is just too complex for other companies to have to look at how do you do a deal when you've got two shareholders and two owners in there on an asset. Now you only have one owner and one large shareholder.

Gerardo Del Real: Excellent. All right, Mario. Well listen, I hope to have you back on once you define and outline the next drill program and hopefully you'll come on.

Mario Stifano: Perfect. I would love to come back on, Gerardo.

Gerardo Del Real: Mario Stifano, Cordoba Minerals everybody.

Mario Stifano: Thank you.