CDB.V · 2019-07-29 12:00:00

Cordoba Announces Positive Preliminary Economic Assessment for the San Matias Copper-Gold-Silver Project Total Estimated Production: 417,300 Tonnes of Copper, 724,500 Ounces of Gold, 5,930,000 Ounces of Silver Estimated $347.0 million Pre-Tax NPV8% and 26.8% Pre-Tax IRR;

Economic Studies

Cordoba Announces Positive Preliminary Economic

Assessment for the San Matias Copper-Gold-Silver Project

Total Estimated Production: 417,300 Tonnes of Copper,

724,500 Ounces of Gold, 5,930,000 Ounces of Silver

Estimated $347.0 million Pre-Tax NPV8% and 26.8% Pre-Tax IRR;

$210.7 million After-Tax NPV8% and 20.3% After-Tax IRR

High-Grade Gold and Porphyry Copper Upside at San Matias

VANCOUVER, BRITISH COLUMBIA, July 29, 2019: Cordoba Minerals Corp. (TSX-V:CDB;

OTCQB:CDBMF) (“Cordoba” or the “Company”) today reported results from an independent

Preliminary Economic Assessment (“PEA”) for its San Matias Copper-Gold-Silver Project (“San

Matias” or the “Project”) in Colombia. The PEA was prepared by Nordmin Engineering Ltd.

(“Nordmin”) of Thunder Bay, Ontario, and includes revisions to the June 2019 San Matias Mineral

Resource estimate that was completed by Nordmin (refer to Cordoba’s news release dated July

3, 2019). All amounts are in United States dollars, unless otherwise stated. Summary results of

the PEA are shown below in Table 1.

San Matias PEA Highlights:

• Conceptual 8,000 tonnes per day (“tpd”) conventional open pit mining operation,

increasing to 16,000 tpd after the processing plant expansion is completed in Year 6 –

underpinned by 119.1 million tonnes of modeled mill feed grading 0.45% copper, 0.26 g/t

gold and 2.41 g/t silver, supporting a 23-year life of mine. During the first five years, the

PEA includes copper, gold and silver grades averaging 0.67%, 0.30 g/t and 3.74 g/t

respectively with a low strip ratio of 0.82:1.

• PEA life of mine (“LOM”) production of 417,300 tonnes of copper, 724,500 ounces of gold

and 5,930,000 ounces of silver contained in a clean copper concentrate and precious

metals doré. The copper concentrate is expected to contain very low contents of

deleterious elements, such as arsenic and lead.

• Estimated annual copper production of 15,400 tonnes in concentrate in Years 1 to 5;

increasing to 20,700 tonnes in Years 6 to 16; and averaging 18,100 tonnes per year over

the total 23-year PEA life of mine.

• Average LOM C1 cash costs of $1.32 per pound of copper, net of precious metals by-

product credits.

• Initial capital expenditures of $161.4 million, expansion capital expenditures of $120.6

million and total PEA life of mine capital expenditures, including sustaining capital, Tailings

Management Facility (“TMF”) and reclamation costs, of $527.5 million.

• Pre-tax net present value ("NPV") of $347.0 million at an 8% discount rate and a pre-tax

internal rate of return ("IRR") of 26.8%, using metals price assumptions of $3.25 per pound

copper, $1,400 per ounce gold and $17.75 per ounce silver. A USD/COP foreign

exchange rate of 3,125:1 has been applied. Pre-tax values include Colombian mining

royalties of 4% of total precious metals revenue and 5% of total copper revenue.

• After-tax NPV8% of $210.7 million and an after-tax IRR of 20.3%, representing a 5.3-year

payback using the same metals price assumptions.

• Over the PEA life of mine, the San Matias Project is expected to generate $180.7 million

in royalty revenue plus $331.2 million in income tax revenue to the government.

• Cordoba has identified additional opportunities to enhance the overall project economics,

including delineation of the high-grade gold veins contained within the El Alacrán deposit

(“Alacran”) and optimization of mineral processing and metals recovery. Potential also

exists for the discovery of the porphyry sources for the Alacran and Montiel West deposits

and for other deposits within the San Matias Project area.

The San Matias 2019 PEA is preliminary in nature and includes an economic analysis that is

based, in part, on Inferred Mineral Resources. Inferred Mineral Resources are considered too

speculative geologically for the application of economic considerations that would enable them to

be categorized as Mineral Reserves – and there is no certainty that the results will be realized.

Mineral Resources do not have demonstrated economic viability and are not Mineral Reserves.

“We believe we have demonstrated a very robust project at San Matias through the PEA work

completed by Nordmin.” stated Eric Finlayson, President and CEO of Cordoba. “The Alacran

deposit, with its significant copper, gold and silver grades and low strip ratio, remains the

cornerstone of the Project, supplemented by the later addition of mill feed from the Montiel East,

Montiel West and Costa Azul pits. This is only the beginning for San Matias, and we will continue

to explore our highly prospective copper and gold targets within the region.”

San Matias Copper-Gold-Silver Project Overview

The San Matias Copper-Gold-Silver Project is located in the municipality of Puerto Libertador,

Department of Córdoba, Colombia, and is approximately 200 kilometres north of Medellín. The

site is road accessible from the town of Puerto Libertador, approximately 20 kilometres away. The

PEA outlines a conventional open pit mining operation consisting of a main open pit mine at the

Alacran deposit and three smaller open pit mines at the Montiel East, Montiel West and Costa

Azul satellite deposits. The PEA includes a centralized processing plant and TMF located directly

adjacent to the Alacran pit. The site layout is shown below in Figure 1.

The PEA includes employment for 290 personnel during the first 5 years of expected production

and increasing to 355 personnel for the remaining 18 years.

Permitting

Cordoba holds exploration licences covering 149 square kilometres and has an additional 2,491

square kilometres of exploration licenses under application. Cordoba is working to complete the

Mining Technical Work Plan (Programa de Trabajo y Obras or “PTO”) and the Environmental

Impact Assessment (“EIA”) for the Alacran deposit, required prior to receiving approvals to begin

construction.

Table 1: San Matias July 2019 PEA highlights completed by Nordmin Engineering Ltd.

Preliminary Economic Assessment Highlights - July 2019

Production Metrics

PEA mine life (years) 23

Total copper production (t) 417,300

Total gold production (oz) 724,500

Total silver production (oz) 5,930,000

Average annual copper production (Years 1 to 5; tpa) 15,400

Average annual copper production (Years 6 to 16; tpa) 20,700

Average annual copper production (LOM average; tpa) 18,100

Total conceptual open pit resources (kt) 119,100

Total waste (kt) 96,200

Total material (kt) 215,300

Strip ratio (waste:conceptual open pit resources) 0.81:1

Years 1 to 5 / average LOM copper grade (%) 0.67% / 0.45%

Years 1 to 5 / average LOM gold grade (g/t) 0.30 / 0.26

Years 1 to 5 / average LOM silver grade (g/t) 3.74 / 2.41

Nameplate mill throughput (Years 1 to 5; tpd) 8,000

Nameplate mill throughput (Years 6+; tpd) 16,000

Operating Costs

Total operating cost ($/t processed; incl. royalties) $15.78

C1 cash cost ($/lb copper; net of by-product credits) $1.32

Capital Costs ($M)

Initial capital expenditures $161.4

Expansion capital expenditures $120.6

Total LOM capital expenditures (incl. TMF expansion, sustaining & closure) $527.5

Economic Analysis

Pre-tax undiscounted free cash flow ($M) $1,076.5

Pre-tax NPV8% ($M) $347.0

Pre-Tax IRR 26.8%

After-tax undiscounted free cash flow ($M) $745.3

After-tax NPV8% ($M) $210.7

After-tax IRR 20.3%

Copper price ($/lb) $3.25

Gold price ($/oz) $1,400

Silver price ($/oz) $17.75

Exchange rate (USD/COP) 3,125

Pre-tax values include Colombian mining royalties of 4% of total precious metals revenue and 5% of total copper revenue.

PEA Mining Plan

The PEA envisions that the Alacran and satellite pits will be mined using conventional drill, blast

and shovel/truck open pit mining methods. The PEA assumes mining activities will be performed

by a contractor-owned mining fleet for Years 1 to 5 of operation and switching to an owner-

operated fleet in Year 6 and onward.

Mining at the Alacran pit is planned to initially target the high-grade, low-waste strip blocks located

in the centre of the deposit. Three small pushbacks are planned within the first five years of the

operation to ensure consistent high-grade resources are being fed to the mill and maximizing

NPV. During the first five years, copper, gold and silver grades are expected to average 0.67%,

0.30 g/t and 3.74 g/t respectively with a low strip ratio of 0.82:1 including pushbacks. An additional

three pushbacks are planned in the remaining life of mine for the Alacran pit. The deposit is

situated along a ridgeline, which reduces the overall strip ratio and allows for minimal re-ramping

in the pushbacks. Alacran pit outlines are shown below in Figure 2.

In the PEA, mining activity at the Alacran pit is projected to be reduced in Year 17, at which point

part of the mining fleet is planned to start mining the satellite deposits at the Montiel East, Montiel

West and Costa Azul pits. The PEA assumes that these smaller, satellite open pits will be mined

simultaneously in order to provide a sustainable supply of mill feed and increase operational

flexibility. During Years 17 to 23, 8,000 tpd of mill feed is expected from the Alacran pit

complemented by 8,000 tpd from the satellite pits.

The PEA calls for saprolite rock to be mined and a portion of this material to be stockpiled in order

to maintain a set rate of blending with fresh rock prior to being processed through the mill.

Figure 1: San Matias site layout showing the Alacran pit, the Montiel East, Montiel West and Costa Azul satellite pits, the mill location

and the TMF.

18220-01 -10-1010

MINE SITE LAYOUT

GENERAL ARRANGEMENT

PITS, STOCKPILES, T.M.F, WATER MANAGEMENT, ETC.

PLAN VIEW

ALACRAN P.E.A.

CORDOBA MINERALS

18220-01

NOT FOR CONSTRUCTION

PRELIMINARY

BWS / AK / HL

TAILINGS MANAGEMENT FACILITY

(ELEV. 173 m) 98.1M cu. m

ALACRAN WASTE DUMP

26.4M cu. m

SAPROLITE STOCKPILE

5M TONNES

MONTIEL EAST PIT

MONTIEL WASTE DUMP

1.2M cu. m

COSTA AZUL PIT

COSTA AZUL WASTE DUMP

0.7M cu. m

WATER COLLECTION

AND TREATMENT

MONTIEL WEST PIT

STOCKPILE

100,000 TONNES

ALACRAN PIT

WATER COLLECTION

AND PUMPING

LEGEND

MAIN RIVERS

RECLAIMED WATER LINE TO MILL

TRANSFER WATER LINE TO TREATMENT FACILITY

SEEPAGE WATER LINE TO TREATMENT

700m BLASTING SET-BACK FROM ALACRAN PIT

OPEN PIT MINING AREA

ORE STOCKPILE

TOPSOIL STOCKPILE

OPEN PIT WASTE ROCK STORAGE

TAILINGS MANAGEMENT FACILITY

858,000

422,000

857,000856,000855,000854,000853,000

421,000420,000419,000418,000417,000416,000

422,000421,000420,000419,000418,000417,000416,000

858,000857,000856,000855,000854,000853,000

WATER TREATMENT

WATER COLLECTION

AND PUMPING

EMERGENCY SPILLWAY

SECONDARY STREAMS

EXISTING ROADS

PLANNED SITE ROADS

TAILINGS LINE FROM MILL

WATER COLLECTION

AND PUMPING

PAG WASTE

17.6M cu. m

2019-07-22

1 2 3 4 5 6 7 8

2 50 100 Millimeters

REF. DWG. NO. REFERENCE DRAWING TITLE REV. DESCRIPTION DATE BY CHECK APPR.

DATE

THIS DRAWING MIGHT BE REDUCED FROM ITS ORIGINAL SIZE. DO NOT SCALE

CLIENT:

PROJECT / LOCATION:

TITLE:

SCALE: PROJ. NO. DWG. NO.

134 Inches

DRAWN BY:

CHECKED BY:

APPROVED BY:

R E V I S I O N SR E F E R E N C E D R A W I N G S

REV. NO.

NOT TO SCALE

1 UPDATED PIT SHAPES, WASTE TONNAGES, TAILINGS SITE DESIGN 2019-07-24 AK

MILL / LABRATORY

CRUSHER

WATER COLLECTION

AND TREATMENT

Figure 2: Progressive PEA pit outlines at the Alacran mine

Mineral Processing, Metallurgy and Infrastructure

The process plant has been designed as a conventional milling operation with an initial nameplate

capacity of 8,000 tpd, increasing to 16,000 tpd following a planned processing plant expansion

completed at the beginning of Year 6. The conceptual plant design includes a gravity separation

circuit for initial precious metals recovery prior to a conventional froth flotation circuit. The PEA

assumes that the plant will produce gold-silver doré bars on site and a copper concentrate

containing the remaining precious metals by-products. The copper concentrate is expected to

contain very low levels of deleterious elements, such as arsenic and lead.

The Project process flowsheet includes:

• Primary crushing with stockpile;

• A Semi Autogenous Ball Mill Comminution (“SABC”) circuit, utilizing one Semi Autogenous

Grinding (“SAG”) Mill and one Ball Mill for initial plant throughput, adding a second Ball

Mill during the planned expansion to achieve the higher processing rate;

• Potential for gravity separation of precious metals with Intensive Leach Reactor (“ILR”)

chemical separation to produce doré;

• Froth flotation with rougher, scavenger and cleaning stages;

• Thickening and dewatering of final concentrate prior to transport for refining.

Based on preliminary metallurgical test work completed on fresh rock and recent test work to

predict recovery performance of upper (oxidized) zones, the overall copper recovery is expected

to average 78.6%. Gold and silver recoveries for the overall process are expected to average

74.4% and 65.5% respectively. Further metallurgical test work is recommended to optimize

recoveries and confirm the validity of a doré producing circuit from the Ball Mill cyclone underflow.

Copper concentrate output is expected to be approximately 280 to 300 tpd for the first five years

of operation, increasing to approximately 560 to 600 tpd thereafter.

Power to the Project is expected to be supplied via a 15-kilometre, 230 KV powerline connecting

to the Sator SAS 300 MW thermal power plant. The Sator SAS plant is part of a permitted regional

electric grid expansion that includes the currently operating ISA and Gecelca 300 MW thermal

power plants. The Sator SAS plant is expected to be operational within the next three to five years.

The PEA envisions that the road access to the San Matias site will be improved to the town of

Puerto Libertador to allow for increased movement of equipment and materials to and from site.

Any doré produced is expected to be flown out through the Puerto Libertador airport located

approximately 20 kilometres away, and copper concentrate is planned to be loaded on-site and

transported by 60-tonne trucks to port facilities at Tolu (approximately 250 kilometres away) or

Cartagena (approximately 400 kilometres away) for export to international smelters. Both ports

currently support the export of ferronickel from South 32’s Cerro Matoso nickel mine.

Tailings Management Facility (“TMF”)

The PEA envisions that the TMF will be located in Concepción Creek valley, approximately 1.5

kilometres west of the Alacran open pit and will be designed to contain a maximum of 156 million

tonnes of tailings and waste rock material. The initial TMF is designed to contain 43 million tonnes

of tailings material and waste rock. Dam raises are planned for Years 9, 14 and 18 of operations.

The foundation materials in the valley generally consist of low permeability saprolite lying over

low permeability bedrock. The Final Dam is planned to be constructed using non-potentially acid

generating waste rock from open pit mining operations to develop the expanded valley type

impoundment.

The PEA calls for the upstream face of the Final Dam to be lined with a geosynthetic lining system

to minimize seepage from the TMF. The PEA envisions that a foundation drain will be installed in

the base of the Final Dam to collect any potential seepage. The Final Dam in the conceptual TMF

will be raised in several stages using the downstream construction method and c onventional

tailings slurry will be conveyed from the plant via a pipeline. Waste rock will be hauled and placed

in the TMF basin by the mine haul trucks and a dozer. In the conceptual TMF, the tailings slurry

will be su b-aqueously discharged from multiple locations along the dam crests and around the

perimeter of the TMF basin to evenly fill the impoundment. The potentially acid generating (“PAG”)

waste rock is expected to be strategically placed within the TMF basin such that the tailings and

supernatant pond will cover and maintain the PAG waste rock in a saturated state within 6 months

of the waste rock being placed in the TMF.

The PEA envisions that t he TMF will have a permanent water cover over the tailings and waste

rock to keep the waste submerged. A floating pump barge is to be installed at start-up to reclaim

process water from the TMF to the plant for reuse in the process. The TMF concept includes

freeboard to temporarily store runoff resulting from the Environmental Design Storm (“EDS”) and

a spillway to safely pass the peak flows resulting from the Inflow Design Flood (“IDF”).

It is expected that the TMF will operate in a water surplus during the wet season and that

supernatant water will need to be treated, as required, and discharged over a portion of the year.

Operating Costs

Copper C1 cash costs are expected to average $2.51/lb including royalties but before precious

metals credits and $1.32/lb net of credits. Total onsite operating costs including royalties are

expected to average $15.78 per tonne processed. Mining costs are expected to average $1.85

per tonne of material mined at the Alacran and satellite pits based on a total of 215.3 million

tonnes of total material moved. Cost contingencies of up to 25% have been applied as additional

buffer in the cost estimates. A breakdown of the unit costs is shown in Table 2 below.

Table 2: San Matias operating cost breakdown.

Operating Cost $/t mined $/t

processed

$/lb copper

payable LOM $M

Mining $1.85 $3.34 $0.45 $398.1

Processing $8.89 $1.20 $1,058.4

G&A $1.47 $0.20 $175.5

Royalties $0.56 $0.08 $66.3

Government royalties $1.52 $0.21 $180.7

Total onsite $15.78 $2.14 $1,879.0

TC/RC & other offsite $2.77 $0.38 $330.5

Total before by-product credits $18.55 $2.51 $2,209.5

By-product credits ($8.80) ($1.19) ($1,048.2)

Total net of by-product credits $9.75 $1.32 $1,161.2

Capital Expenditures

The initial capital expenditures for the Project total $161.4 million, which include site preparation,

construction of the processing plant and TMF, road upgrades and other infrastructure. It is

expected that site construction will occur over a 3-year pre-production period. The PEA assumes

that mobile mining equipment will be supplied by the mining contractor and operated for the first

5 years of operations, after which the equipment will be bought out and converted to an owner-

operated mining fleet beginning in Year 6.

An expansion of the mine, mill and processing facilities is planned to be completed in Year 6 and

is expected to cost $120.6 million, including $46.6 million for the purchase of the owner-operated

mine fleet (including contingency). The Year 6 expansion is expected to increase the nameplate

capacity of the San Matias plant from 8,000 tpd to 16,000 tpd. A breakdown of the PEA life of

mine capital expenditures is shown in Table 3 below.

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