Condor Blanco Mines Ltd : Encouraging Geophysics Results at Carachapampa, Chile

11 July 2012

• Carachapampa geophysics results are highly encouraging. The central anomaly is co- incidental with strongest results from scout drilling program performed earlier this year. The survey also defined a very large and unclosed chargeability anomaly to the northeast of the alteration system that is yet to be tested.

• Drilling holes now sighted: The IP survey has provided excellent focus for the next stage of drilling that is anticipated to involve 5,000m of diamond or pre-collared diamond drilling.

Condor Blanco Mines Limited ("Condor Mines", "the Company") is highly encouraged by results of an Induced Polarisation ("IP") geophysical survey completed over the Carachapampa high sulphidation epithermal project in the Maricunga Belt in northern Chile. The survey was undertaken after the strong initial scout drilling program results as announced on 13 March 2012.
The drilling not only returned excellent results, but also provided preliminary information on the controls on the mineralisation. As announced, the mineralisation is related in part to WNW and NNE structures that are occupied by massive silica and/or hydrothermal breccias within the host dacitic volcanics. Condor Mines' current interpretation is that there are two different structural orientations that relate to two mineralising events. Mineralisation is also associated with significant disseminated pyrite.
It was considered that IP would be an effective method to map areas of co-incident chargeability (sulphides) and resistivity (silicification) which would guide further drilling on this very large alteration system. It was anticipated that IP would also cost-effectively test large areas of the alteration system that are obscured by thin volcanic ash cover. Accordingly a 24 line kilometre IP survey was initiated in April with 10 lines, 2,400m in length spaced 200m apart, oriented SE-NW (see Figure 1). The elevation of the project area ranges from approximately 3,800m ASL to 3,900m ASL. The equipment used in the survey together with the resistive nature of the ground has resulted in reliable data below the surface down to an elevation of about 3,600m (i.e. 250-300m below the surface). "Background" chargeability was found to be between 2 and 4mV//V.
The survey has shown generally low conductivity within the first 100-150m, coinciding with large areas of argillic alteration as shown by the drilling. However three strong chargeability anomalies are apparent from an elevation of 3,700m and tend to increase in strength and tend to merge at around 3,600m elevation. Figures 2-4 show the chargeability anomalies at depth slices of 3,700m, 3,650m and 3,600m.
The three zones have co-incident moderate resistivity anomalies as shown in Figure 5, interpreted to reflect silicification. The chargeabilities are strong with values of 5-6 times background from 6-12mV/V.
The results are highly encouraging particularly as the strongest drilling results from the initial drilling are co-incident with the central anomaly even though the holes were too shallow to test the IP anomaly. The majority of the initial drill holes are sited on the margins of the IP anomalies, particularly in the north (see Figure 6). These holes were targeted on available alteration mapping. Moreover, the very large and unclosed chargeability anomaly to the northeast of the alteration system has not been tested at all as this anomaly is covered by thin volcanic ash. This is now a priority target for future testing.
The IP anomalies represent compelling drill targets particularly given the encouraging results from Condor Mines' initial drilling campaign. The IP survey has provided excellent focus for the next stage of drilling, which is anticipated to involve 5,000m of diamond or pre-collared diamond drilling. The proposed holes are shown in Figure 6. Condor Mines looks forward to initiating this program in September or as soon as weather permits.

Figure 1: Location of the IP Lines at Carachapampa

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Figure 2: Inverted Chargeability 3,700m Figure 3: Inverted Chargeability 3,650m

Figure 4: Inverted Chargeability at 3,600m Figure 5: Inverted Resistivity at 3,650m

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Figure 6: Proposed Diamond Drill Holes and Chargeability Anomalies (6, 9 and 12mV/V contours at 3,650m)

Enquiries: Mr Glen Darby
Managing Director
Condor Blanco Mines Limited
Office: +61 (0)2 9225 4070
Email: glen.darby@condormines.com

The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Carl Swensson, who is a Member of the Australasian Institute of Mining & Metallurgy. Carl Swensson is a director of Condor Blanco Mines Limited and has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". Carl Swensson consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

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