FOR IMMEDIATE RELEASE
Message to Shareholders
December 22, 2009 - Toronto, ON
I am writing this year-end review not only to thank our investors, but to also thank the management and the staff of Cuervo Resources and Minera Cuervo for their continued support and hard work throughout 2009. Despite the turmoil in the financial markets that we all have faced in 2009, Cuervo Resources has made major strides in achieving the goals that we set out for the Cerro Ccopane project in Perú.
The first stage of our business plan (“Find It, Prove It, Sell It”) has been achieved. Geophysics has led us to indications that a potential to find over 2 billion tonnes of iron ore exists on the wholly owned Cerro Ccopane property. The second stage (“Prove It”) has commenced: an NI 43-101-compliant resource estimate for the Orcopura zone of mineralization stands at 56 million tonnes grading 46% iron in the “Measured + Indicated” categories, plus a further 51 million tonnes grading 43% iron is reported to be present in the “Inferred” category. Orcopura is only one of six known zones. The hard work is still in front of us.
In moving forward, we plan to extensively explore two new major target zones. This will involve a drilling program with costs of over 40 million US dollars. To finance this program, initiatives have been taken to seek well established potential joint-venture partners who can provide project financing in return for a stake in this exciting project. Strategically, we have made the decision to vend a partial property interest in order to prevent dilution of our shareholders’ interests. The current financial environment appears very amenable to finding a joint-venture partner. Steelmakers and iron ore producers in China, India, South Korea, Australia and Brazil are not satisfied with their current supplies of THE raw material.
Recent developments in the iron ore industry have further increased our confidence in establishing a joint-venture partnership for our Cerro Ccopane project. First, the iron ore spot price has risen from $US60.00 to around $US100.00 (62% Fe fines). Secondly, China is importing record amounts of iron ore. Thirdly, Xstrata recently entered the iron ore industry for the first time, investing US$50 million for a 50% interest in an iron ore project located in the Republic of Congo. And finally, Cardero Resource has closed the sale of its Pampa de Pongo iron ore property in southern Perú to a Chinese steelmaker; Cardero Resource receives a total of $US100 million for the property.
I would also like to address the questions and concerns that our investors have voiced, and thank them for their valued input. The first of these concerns is a perceived transportation issue. The construction of a slurry pipeline to the coast is reported to make the most economical sense, according to the Sandwell Engineering study commissioned by Cuervo. Pipelines are economical, reliable, and can traverse difficult terrain. Slurry pipelines have proven to be a success in many parts of the world; including a 400 km-long iron ore pipeline that has been in operation in Brazil for over 30 years.
The second of these concerns is Cuervo Resources’ listing on the Canadian National Stock Exchange (“CNSX”). The concept that this market is not liquid is ill-founded. The CNSX is a streamlined, fully disclosed, fully accredited, and cost effective alternative. As an emerging company, we have been able to concentrate our focus on the Cerro Ccopane project without being overly burdened. The Company does recognize the need for its shares to be listed and traded on a senior exchange, which would be advantageous to attract institutional investors. This opportunity should be achieved upon gaining project financing from a joint-venture partner.
In closing, I would like to wish our investors and Cuervo’s management and staff a very prosperous New Year in 2010. To date, the Cerro Ccopane project has been a great success, and I have confidence that the future holds more success. Cuervo Resources’ stock price does not reflect the developments that are taking place at Cuervo or in the iron ore industry in general. However, this disconnect does provide an upside for current investors and an opportunity for future investors.
Finally, I would like to thank the other members of my Board of Directors who have worked tirelessly at my side to achieve the Company’s goals for and on the behalf of the shareholders that they represent.
Yours sincerely,
Brian Berner, Chairman and Chief Executive Officer
For further information, please contact Mr. Brian Berner, Chairman and CEO, at 416-203-3957 x201 or Mr. Tom Berner, Investor Relations, at 416-203-3957 x202. Additional information about Cuervo can be found at the Company’s website at http://www.cuervoresources.com.
The Canadian National Stock Exchange (CNSX Markets Inc.) has neither approved nor disapproved of the contents of this press release.