AND CONTROLLED ENTITIES

Interim Financial Report For the Half Year Ended 31 December 2011

CONDOR BLANCO MINES LIMITED ABN 16 141 347 640 AND CONTROLLED ENTITIES HALF-YEAR FINANCIAL REPORT For the Half Year Ended 31 December 2011

Company Directory

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Directors' Report

3

Auditor’s Independence Declaration

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Condensed Consolidated Statement of Comprehensive Income

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Condensed Consolidated Statement of Financial Position

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Consolidated Statement of Changes in Equity

15

Condensed Consolidated Statement of Cash Flows

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Notes to the Condensed Consolidated Financial Statements

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Directors' Declaration

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Independent Auditor’s Review Report

26

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COMPANY DIRECTORY

NON EXECUTIVE CHAIRMAN Pierre Richard MANAGING DIRECTOR Glen Darby EXECUTIVE DIRECTOR Carl Swensson (Geology) NON-EXECUTIVE DIRECTORS Lia Darby John Shanahan COMPANY SECRETARY Elizabeth Hunt REGISTERED OFFICE Suite 1901, Level 19, 109 Pitt Street Sydney NSW 2000 Telephone: 02 9225 4070 Facsimile: 02 9235 3889 AUDITORS Deloitte Touche Tohmatsu Woodside Plaza Level 14, 240 St Georges Terrace Perth WA 6000 SHARE REGISTRAR

Advanced Share Registry Services 150 Stirling Highway NEDLANDS WA 6009 Telephone: (08) 9389 8033 Facsimile: (08) 9389 7871 STOCK EXCHANGE LISTING Australian Securities Exchange (Home Exchange: Perth, Western Australia) Code: CDB, CDBO

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CONDOR BLANCO MINES LIMITED ABN 16 141 347 640 AND CONTROLLED ENTITIES INTERIM FINANCIAL REPORT DIRECTORS' REPORT

Your directors submit the financial report of the Company and the entities it controls for the half-year ended 31 December 2011. DIRECTORS The names of Directors who held office during or since the end of the half year are: Pierre Richard Glen Darby Carl Swensson Jose Bahamondes John Shanahan Lia Darby Elizabeth Hunt

Non-Executive Chairman Managing Director Executive Director, Geology Executive Director, Operations (resigned 23 January 2012) Non-Executive Director (appointed 23 January 2012) Non-Executive Director Company Secretary

RESULTS The loss after tax for the half-year ended 31 December 2011 was $1,954,564 (31 December 2010: $572,765). REVIEW OF OPERATIONS 1. INTRODUCTION Condor Blanco Mines Limited (“Condor Mines”, “the Company”, ASX Code: CDB) holds controlling interests in two Chilean-based mineral resource companies - Condor Blanco SCM (70%) and Tierra Amarilla SCM (100%). These Chilean-based subsidiaries hold interests over a portfolio of copper–gold projects located to the west of the major mining city of Copiapo in northern Chile. Condor Mines' projects are considered prospective for two types of mineralisation (1) epithermal gold and silver, and (2) porphyry copper-gold. Work in the period has focussed on drill testing targets at Gold Iron and Carachapampa in addition to the construction and repair of roads and access tracks at Yaretas. The location of Condor Mines’ leading projects, with respect to major regional deposits is presented below (Figure 1).

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CONDOR BLANCO MINES LIMITED ABN 16 141 347 640 AND CONTROLLED ENTITIES INTERIM FINANCIAL REPORT DIRECTORS' REPORT

Figure 1: Location of Maricunga Belt and Chilean Iron Belt Projects Work undertaken during the second half of 2011 has included: • A six hole reverse circulation (“RC") drilling programme at Gold Iron targeting porphyry coppergold. Results have been very positive with copper mineralisation in the form of chalcopyrite intersected in all six drill holes over extensive intervals. Peak assays of 0.96% Cu and 138ppm Mo were returned from 214-215m from hole RCGI05 within a 48m intersection of 500 ppm Cu. • Drilling at Carachapampa commenced with the results of this programme demonstrating moderate to strong argillic alteration and disseminated pyrite varying from 1% to 5% becoming apparent from depths of 30m to 48m. The extensive alteration and the mineralogy encountered have encouraged Condor Mines to make plans to undertake diamond drilling at Carachapampa as a matter of priority. • Access was completed to the Yaretas project to allow the commencement of geological mapping and sampling in 2012. The work included the upgrading of approximately 30km of existing tracks and the creation of 4.3km of new roads in mountainous terrain over the large porphyry alteration systems previously identified.

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CONDOR BLANCO MINES LIMITED ABN 16 141 347 640 AND CONTROLLED ENTITIES INTERIM FINANCIAL REPORT DIRECTORS' REPORT

Condor Mines did not undertake any additional field work at its other projects, including La Isla, CautivaVictoria, Fenix, and Fraga during the second-half of 2011. Consequently, these projects are not included in this review. Future work for these projects, will be announced to market in due course. In order to reinforce Condor Mines’ exploration capability Mr Roberto Munoz was appointed to the position of exploration manager during the period. The Company is very pleased that Mr Munoz accepted the position, as he is a highly skilled and well respected Chilean geologist with strong regional experience. Mr Munoz has over 40 years’ experience in base, precious metals and industrial minerals in Chile and South American countries (including Peru, Argentina, Uruguay, Brazil, Ecuador, and Venezuela). He has also worked in Australia and Philippines and has been previously employed as General Manager for AMAX Inc.’s Chilean subsidiary, and was Director of Exploration, South America for Echo Bay Mines Limited prior to its acquisition by Kinross Gold Corporation. 2. GOLD IRON (COPPER AND GOLD) 2.1 Project Overview The Gold Iron Project is held by Condor Mines under an option agreement where the Company is targeting porphyry copper-gold mineralisation. Situated 40km east of Copiapo in northern Chile, the project covers a large phyllic alteration system occupying an area of several square kilometres. A number of small tourmaline breccia pipes, lithic breccia pipes and phreatic breccia pipes intrude the alteration system, indicating very high level and intense hydrothermal activity. Copper mineralisation in the form of malachite associated with late stage laminated quartz veins outcrop in the vicinity of some of the breccia pipes near the centre of the system. A small area of the phyllic alteration was drilled by Anglo American ("Anglo") in 1988 with eight shallow (