Asian Metal: Gordon, thank you for agreeing to participate in this interview with Asian Metal. Cuervo initially targeted Peru because of its infrastructure and its well-regarded legal and banking systems. Can you expound a little upon how these assets in the Peruvian market compare to other South American countries and how they make Peru attractive?

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Gordon: Actually, the company targeted Peru for these reasons and several others. The huge growth in the iron ore market in the last 20 years has been in the Pacific rather than the Atlantic basin, yet the Western Americas have supplied very little of the iron ore to these new markets. Peru is a mining country, where 60% of its exports are mineral related and the Fraser Institute ranks it only behind Chile and Mexico and on about the same level as Brazil in terms of mineral potential and legal framework. As you know Peru has a long Pacific coastline with ample potential port sites that should allow Cuervo to ship iron ore to Asia 12 months of the year.

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The Peruvian economy is very open to foreign investment and recently Peru signed an agreement with Chile to encourage mining investment in both countries.

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Asian Metal: What makes the Cerro Ccopane project particularly unique?

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Gordon: We have identified very large tonnages of high grade ore outcropping on surface in Peru. In previous years we identified 56 million tonnes of measured and indicated iron ore, grading 45.7% Fe and 51 million tonnes inferred grading 43.7% Fe (20% cutoff) at our Orcopura deposit as well as 56 million tonnes inferred grading 53.5% Fe and 16 million tonnes inferred grading 49.3% Fe (both 30% Fe cut-off grade) at the nearby Huillque and Aurora zones. We stopped drilling on our new BOB1 zone just three weeks ago and have so far verified a strike length of over 2km. BOB1 was previously identified by geophysical surveys (both magnetic and gravity) as a potential billion tonne deposit with a strike length of over 3km. The drilling gave more confirmation to the 3km magnetite exposure as the very high magnetic and gravity anomaly can only be explained by magnetite.

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We have commissioned two transportation studies that we by building a pipeline to the Pacific, we could ship iron ore to a Pacific port for an operating cost of less than USD2.00 per tonne. With our high grade and high metallurgical recovery rates we should be able to produce a high grade iron ore product for very modest operating costs.

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Asian Metal: According to recent tests, the product quality is pretty high, ranging over 40% Fe content, which could easily be upgraded to high quality (66-69%) material. Are there any further tests on the horizon and, if so, when should the results be expected?

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Gordon: You are quite right. In the previous work we conducted Davis Tube tests that indicated that we could create a high grade iron product with approximately 90% Fe recovery and minimum metallurgical mineral dressing. This would appear to be due to the coarse grained nature of the sulphides in the previous drilled deposits further to the south. The sulphides in the BOB1 core also appear to be coarse grained and we will be conducting metallurgical tests in 2013 to confirm this observation.

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Asian Metal: Even though there is still testing being performed, is there a general idea of the tonnage that the property could offer?

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Gordon: We are planning on completing a 43-101 compliant resource estimate by the end of February 2013 and will release it at that time.

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Asian Metal: What are some challenges that the Cerro Ccopane project has presented this far?

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Gordon: Probably the two biggest challenges have been community relations and logistics. While Peruvian law supports mining, local land owners and communities may have a different perspective. In the past Cuervo has employed Community Relations specialists to help us negotiate with the local people with great success. Currently we have a Community Relations Specialist surveying one of the local communities to help us better understand their needs and find additional ways to work with them. In the past we have built schools, community infrastructure, instituted children’s feeding programs and paid teacher’s salaries.

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While Peru has made great strides in recent years in opening up the country, logistics can still be a problem. We are working in an area about 60km. south of Cusco, the ancient Inca capital and jumping off point for Machu Picchu. Our area is characterized by a high plain (the Alto Plano) with an altitude of about 4200m interspersed with river valleys that are often over 1000m deep. As I said, we are only 60km from Cusco but it can take as much as 5 hours to reach our camp at BOB1 by road. The good news is that because Peru is an experienced mining country we can source virtually all of our supplies and specialty labour within Peru and usually within Cusco.

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Asian Metal: Asian corporations have been particularly interested in Canadian and South American resources as potential partners to secure long-term sources of supply for various raw materials. Are there any long-term plans for Cuervo to develop an agreement or joint venture with any international companies?

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Gordon: This is exactly what we would like to do. While our expertise lies in exploration it has never been our intention to take this project to production. Our mission has been, and continues to be to identify an iron ore resource, eliminate as much of the engineering risk as possible (i.e. by drilling, sampling, metallurgical testing, transportation studies etc.) and sell the project to a major mining company or steel producer with markets in Asia.

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Asian Metal: Thank you for your time, Gordon.

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Gordon: Thank you!

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