Condor Resources Inc. (TSX-V:CN, OTC:CNRIF) CEO Chris Buncic talked with Proactive about the company’s significant progress at its Cobreorco project in Peru.
Buncic explained that Teck Resources is earning a 75% interest in the project through a two-stage agreement, which involves staged cash payments and an investment of $10 million into drilling and exploration work.
With the recent receipt of the DIA — the environmental permit in Peru — the company is now awaiting the final initiation of activities permit, which would allow drilling to commence.
Proactive: Welcome back inside our Proactive newsroom. Joining me now is Chris Buncic. He is the CEO of Condor Resources. Chris, good to see you again. How are you?
Chris Buncic: You too. Great, thanks.
Good to have you along. I know you've had some news out today, another critical milestone we'll talk about in just a second. But this is all related to your relationship with Teck. So remind everyone a little bit about the project and more importantly, this earn-in agreement.
Cobreorco is a joint venture we put together with Teck Resources just over a year ago. The application for this DIA, or environmental permit of Peru, was submitted last September. What's really interesting is that Teck is very interested in advancing it. It's got huge potential and is about 50 kilometres away from MMG Los Bombas mine in southern Peru. It’s a very large porphyry SCARN type system. We've taken samples and are getting great values of gold and copper from mineralization on surface in a large outcropping area. That’s what really attracted Teck.
Teck is earning in on 75% of the project in a two-stage deal. That involves a couple of cash payments and putting $10 million into the ground to advance drill programs. Teck is really driving everything that is social and technical in nature here. We now have this DIA. The next step is initiation of activities, which is the final permit required to start drilling. We are waiting for that with anticipation and hopefully can get busy at the project soon. As Teck makes progress, we will be able to talk about it. By spending that money, Teck will earn 75% and we will retain 25%. This is a material project for Condor. Teck has a big budget and is very keen to drill.
Was this DIA the key one you had to get? And is the next one expected to be a little easier now that the DIA is done?
That's right. A large amount of detail has gone into the DIA. The next permit, initiation of activities, is more of a review of the social aspects. Many of those have already been addressed in the DIA. The ministry visits the site and further conversations happen, but we expect it to go relatively smoothly. We are a little outside the process, so I don’t want to set expectations too high. But it's possible we could be drilling in the third quarter and see some results in the second half of the year.
Teck is looking to earn about 75% interest into the project. They have to spend $10 million over the next three years. That’s a lot of money on a project in three years, and I would imagine really accelerates what they're hoping to do.
That's right. This is a very exciting project because of the potential scale. MMG Las Bombas mine, 50 kilometres away, is producing 50 million tons per year and has about 14 billion pounds of copper in resources. These SCARN and porphyry deposits are very large. The prize is really large. We're excited to have a meaningful piece in this, and now that Teck has its DIA, we believe very shortly we'll be able to drill.
Quotes have been lightly edited for clarity and style