REG - Condor Gold PLC - Strategy Update, Advisor Appt to Sell the Assets

Condor GoldAnnouncement

22/11/2022 07:00

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RNS Number : 1312H  Condor Gold PLC  22 November 2022

 

 

   Condor Gold plc

   7/8 Innovation Place

   Douglas Drive

   Godalming

   Surrey

   GU7 1JX

   Tel: +44 (0) 207 493 2784

22 November 2022

 

 

Condor Gold Plc

("Condor" or the "Company")

 

Condor Gold Provides a Strategy Update and Appoints Advisor to Sell the Assets

Condor Gold (AIM: CNR; TSX: COG) announces that following a robust and
economically attractive Bankable Feasibility Study also known as a Feasibility
Study on the La India open pit it has appointed Hannam and Partners to seek a
buyer for the assets of the Company. On 26 October 2022, a Feasibility Study
Technical Report was filed on SEDAR titled Condor Gold Technical Report on the
La India Gold Project, Nicaragua, 2022 dated October 25, 2022 (2022 FS) and is
also available on the Company's website www.condorgold.com
(http://www.condorgold.com)

 

Mark Child, Chief Executive of Condor Gold, commented:

"Condor Gold has de-risked the La India Gold Project to a near
construction-ready status with an 18 month construction period from receipt of
project financing. The Board has reviewed the Company's options including
going through a financing and construction phase as a single asset, single
jurisdiction company with no existing gold production and has concluded it is
in the best interests of the Company and all stakeholders to sell the assets
of the Company to a gold producer with mine building expertise, thus ensuring
a new mine at La India, a significant investment in the local area and a
regeneration of the local communities.

The Company's strategy has been successfully executed, de-risking the assets
so that a mine can be developed in 2 stages using the new SAG Mill that has
already been purchased. The Company owns approximately 1,000 hectares of land
over the area of the mine site infrastructure and has the key permits to
construct and operate the mine.  The delivery of a robust and economically
attractive Feasibility Study on the single La India open pit demonstrates an
average of 81,524 oz gold per annum for the initial 6 years for a relatively
low total upfront capital cost of US$106 Million. Two additional permitted
high grade feeder pits can be added during the early years of production thus
increasing early production to over 100,000 oz gold p.a.with a stage 2
expansion to 150,000 oz gold p.a. as detailed in the October 2021 PEA."

Background

The Company's principal asset is La India Project, Nicaragua, which comprises
of a large, highly prospective land package of 588 sq km comprising of 12
contigious and adjacent concessions. La India Project hosts a high grade
Mineral Resource Estimate ("MRE") of 9,672 kt at 3.5g/t gold for 1,088,000 oz
gold in the indicated mineral resource category and 8,642 kt at 4.3 g/t gold
for 1,190,000 oz gold in the inferred mineral resource category. The open pit
MRE is 8,693 kt at 3.2 g/t gold for 893,000 oz gold in the indicated mineral
resource category and 3,026 kt at 3.0 g/t gold for 291,000 oz gold in the
inferred mineral resource category. Total underground MRE is 979 kt at 6.2 g/t
gold for 194,000 oz gold in the indicated mineral resource category and 5,615
kt at 5.0 g/t gold for 898,000 oz gold in the inferred mineral resource
category.

Other assets include approximately 1,000 hectares of land purchased for the
mine site infrastructure for circa US$4.2M and a new SAG Mill package
purchased for US$6.5M.

The 2022 FS was completed on La India vein set open pit only, which has a MRE
of 8,487 kt at 3.0g/t gold in for 827,000 oz gold in the indicated mineral
resource category and 893 Kt at 2.4 g/t gold for 69,000 oz gold in the
inferred mineral resource category.

 

The 2022 FS produced a Probable Mineral Reserve of 7.3Mt at 2.56g/t gold for
602,000 oz gold. Production averages 81,545 oz gold per annum for the first 6
years of an 8.4 year mine life. Low initial capital requirement of US$105.5
million (including contingency and EPCM contract) and low average Life of Mine
All-in Sustaining Cash costs (AISC) at US$1,039 per oz gold

On 25 October 2021, the Company announced the results of a Preliminary
Economic Assessment (PEA) and filed on SEDAR a technical report entitled
"Condor Gold Technical Report on the La India Gold Project, Nicaragua, 2021"
detailing average annual production of 150,000 oz of gold over the initial 9
years of production from open pit and underground Mineral Resources and
provides an indication of a production target. Outside the main La India open
pit Mineral Reserve, there are additional open pit Mineral Resources on four
deposits (America, Mestiza, Central Breccia and Cacao) which represent an
aggregate 206 Kt at 9.9 g/t gold for 66,000 oz in the indicated Mineral
Resource category and 2.1Mt at 3.3 g/t gold for 223,000 oz gold in the
inferred Mineral Resource category.  In addition, there is an aggregate
underground Mineral Resource (La India, America, Mestiza, Central Breccia San
Lucas, Cristalito-Tatescame, and Cacao) of 979Kt at 6.2 g/t for 194,000 oz
gold in the indicated Mineral Resource category and 5.6Mt at 5.0 g/t gold for
898,000 oz gold in the inferred Mineral Resource category.

 

- Ends -

 

For further information please visit www.condorgold.com or contact:

 Condor Gold plc                        Mark Child, CEO

                                        +44 (0) 20 7493 2784
 Beaumont Cornish Limited                Roland Cornish and James Biddle

                                        +44 (0) 20 7628 3396
 SP Angel Corporate Finance LLP         Ewan Leggat

+44 (0) 20 3470 0470
 H&P Advisory Limited                   Andrew Chubb and Nilesh Patel

                                        +44 207 907 8500
 Adelaide Capital (Investor Relations)  Deborah Honig

                                        +1-647-203-8793

 

About Condor Gold plc:

Condor Gold plc was admitted to AIM in May 2006 and dual listed on the TSX in
January 2018. The Company is a gold exploration and development company with a
focus on Nicaragua.

 

The 2020 FS was filed on SEDAR on 26 October 2022 and replaces the previously
reported Preliminary Economic Assessment titled Condor Gold Technical Report
on the La India Gold Project, Nicaragua, 2021 dated October 2021 ("2021 PEA")
as presented in the Technical Report filed on SEDAR in October 2021 as the
current technical report for the La India project.

 

The 2021 PEA considered the expanded Project inclusive of the exploitation of
the Mineral Resources associated to the La India, Mestiza, America and Central
Breccia deposits. The strategic study covers two scenarios: Scenario A, in
which the mining is undertaken from four open pits, termed La India, America,
Mestiza and Central Breccia Zone ("CBZ"), which targets a plant feed rate of
1.225 million tonnes per annum ("Mtpa"); and Scenario B, where the mining is
extended to include three underground operations at La India, America and
Mestiza, in which the processing rate is increased to 1.4 Mtpa. The 2021 PEA
Scenario B presented a post-tax, post upfront capital expenditure NPV of
US$418 million, with an IRR of 54% and 12 month pay-back period, assuming a
US$1,700 per oz gold price, with average annual production of 150,000 oz gold
per annum for the initial 9 years of gold production. The open pit mine
schedules were optimised from designed pits, bringing higher grade gold
forward resulting in average annual production of 157,000 oz gold in the first
2 years from open pit material and underground mining funded out of cashflow.
The 2021 PEA Scenario A presented a post-tax, post upfront capital expenditure
NPV of US$302 million, with an IRR of 58% and 12 month pay-back period,
assuming a US$1,700 per oz gold price, with average annual production of
approximately 120,000 oz gold per annum for the initial 6 years of gold
production. The Mineral Resource estimate and associated Preliminary Economic
Assessment contained in the 2021 PEA are considered a historical estimate
within the meaning of NI 43-101, a qualified person has not done sufficient
work to classify such historical estimate as current, and the Company is not
treating the historical Mineral Resource estimate and associated studies as
current, and the reader is cautioned not to rely upon this data as such.
Mineral Resources that are not Mineral Reserves do not have demonstrated
economic viability. The Company believes that the historical Mineral Resource
estimate and Preliminary Economic assessment is relevant to the continuing
development of the La India Project.

 

In August 2018, the Company announced that the Ministry of the Environment in
Nicaragua had granted the Environmental Permit ("EP") for the development,
construction and operation of a processing plant with capacity to process up
to 2,800 tonnes per day at its wholly-owned La India gold Project ("La India
Project"). The EP is considered the master permit for mining operations in
Nicaragua. Condor has purchased a new SAG Mill, which has mainly arrived in
Nicaragua. Site clearance and preparation is at an advanced stage.

 

Environmental Permits were granted in April and May 2020 for the Mestiza and
America open pits respectively, both located close to La India. The Mestiza
open pit hosts 92 Kt at a grade of 12.1 g/t gold (36,000 oz contained gold) in
the Indicated Mineral Resource category and 341 Kt at a grade of 7.7 g/t gold
(85,000 oz contained gold) in the Inferred Mineral Resource category. The
America open pit hosts 114 Kt at a grade of 8.1 g/t gold (30,000 oz) in the
Indicated Mineral Resource category and 677 Kt at a grade of 3.1 g/t gold
(67,000 oz) in the Inferred Mineral Resource category. Following the
permitting of the Mestiza and America open pits, together with the La India
open pit Condor has 1.12 M oz gold open pit Mineral Resources permitted for
extraction.

 

Disclaimer

Neither the contents of the Company's website nor the contents of any website
accessible from hyperlinks on the Company's website (or any other website) is
incorporated into, or forms part of, this announcement.

 

Qualified Persons

 

The technical and scientific information in this press release has been
reviewed, verified and approved by Andrew Cheatle, P.Geo., a director of
Condor Gold plc, and Gerald D. Crawford, P.E., the Chief Technical Officer of
Condor Gold plc, each of whom is a "qualified person" as defined by NI 43-101.

 

Technical Information

 

Certain disclosure contained in this news release of a scientific or technical
nature has been reviewed by the Qualified Persons responsible for their
respective components of the 2022 FS as defined below:

·    On behalf of SRK: Dr Tim Lucks of SRK Consulting (UK) Limited, Mr
Fernando Rodrigues and Mr Ben Parsons of SRK Consulting (U.S.) Inc., Mr
Parsons assumes responsibility for the Mineral Resource Estimate, Mr Fernando
Rodrigues for the Mineral Reserve estimate and the open pit mining study and
production schedule, and Dr Lucks for the oversight of the remaining SRK
technical disciplines.

·    On behalf of Hanlon: Mike Rockandel for the Process design and
Project Infrastructure and corresponding operating and capital costs.

·    On Behalf of Tierra Group: Justin Knudsen P.E. for the tailings waste
management and La Simona water attenuation structure design.

 

 

 

Forward Looking Statements

 

All statements in this press release, other than statements of historical
fact, are 'forward-looking information' with respect to the Company within the
meaning of applicable securities laws, including statements with respect to:
future development and production plans, projected capital and operating
costs, mine life and production rates, metal or mineral recovery estimates,
Mineral Resource, Mineral Reserve estimates at the La India Project, the
potential to convert Mineral Resources into Mineral Reserves. the Company's
plans to sell the assets of the Company or seek alternatives to an asset sale
and the construction timeline of the La India project upon receipt of
financing. Forward-looking information is often, but not always, identified by
the use of words such as: "seek", "anticipate", "plan", "continue",
"strategies", "estimate", "expect", "project", "predict", "potential",
"targeting", "intends", "believe", "potential", "could", "might", "will" and
similar expressions. Forward-looking information is not a guarantee of future
performance and is based upon a number of estimates and assumptions of
management at the date the statements are made including, among others,
assumptions regarding: future commodity prices and royalty regimes;
availability of skilled labour; timing and amount of capital expenditures;
future currency exchange and interest rates; the impact of increasing
competition; general conditions in economic and financial markets;
availability of drilling and related equipment; effects of regulation by
governmental agencies; the receipt of required permits; royalty rates; future
tax rates; future operating costs; availability of future sources of funding;
ability to obtain financing and assumptions underlying estimates related to
adjusted funds from operations. Many assumptions are based on factors and
events that are not within the control of the Company and there is no
assurance they will prove to be correct.

 

Such forward-looking information involves known and unknown risks, which may
cause the actual results to be materially different from any future results
expressed or implied by such forward-looking information, including, risks
related to: mineral exploration, development and operating risks; estimation
of mineralisation and resources; environmental, health and safety regulations
of the resource industry; competitive conditions; operational risks; liquidity
and financing risks; funding risk; exploration costs; uninsurable risks;
conflicts of interest; risks of operating in Nicaragua; government policy
changes; ownership risks; permitting and licencing risks; artisanal miners and
community relations; difficulty in enforcement of judgments; market
conditions; stress in the global economy; current global financial condition;
exchange rate and currency risks; commodity prices; reliance on key personnel;
dilution risk; payment of dividends; as well as those factors discussed under
the heading "Risk Factors" in the Company's annual information form for the
fiscal year ended December 31, 2021 dated March 29, 2022 and available under
the Company's SEDAR profile at www.sedar.com (http://www.sedar.com) .

 

Although the Company has attempted to identify important factors that could
cause actual actions, events or results to differ materially from those
described in forward-looking information, there may be other factors that
cause actions, events or results not to be as anticipated, estimated or
intended. There can be no assurance that such information will prove to be
accurate as actual results and future events could differ materially from
those anticipated in such statements. The Company disclaims any intention or
obligation to update or revise any forward-looking information, whether as a
result of new information, future events or otherwise unless required by law.

 

 

 

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