REG - Condor Gold PLC - Unaudited results for the 3rd Quarter
14/11/2022 07:00
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RNS Number : 2220G Condor Gold PLC 14 November 2022
14 November 2022
Condor Gold Plc
(“Condor” or the “Company”)
Condor Gold plc announces its unaudited results for the three and nine months
ended 30 September, 2022
Condor Gold (AIM: CNR; TSX: COG) announces that it has today published its
unaudited financial results for the three and nine months ending 30 September,
2022 and the Management’s Discussion and Analysis for the same period.
Both of the above have been posted on the Company’s
website www.condorgold.com (http://www.condorgold.com/) and are also
available on SEDAR at www.sedar.com (http://www.sedar.com/) .
Highlights for the third quarter of 2022
· Feasibility Study confirmatory metallurgical testwork
demonstrated that gold recovery is independent of grade and a fixed gold
recovery of 91% assuming a 75 micron grind size is being used in the project
economics
· Gold extraction from the 11 variability composites averaged 92.6%
at the 75 micron grind size, which is reduced by 2% to allow for gold being
locked up in the processing plant.
· At a finer grind size of 53 microns an average gold extraction of
94.7% was achieved, indicating a potential upside gold recovery of about
93%.
* Updated Mineral Resource Estimate 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 Mineral Resource Estimate 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 Mineral Resource Estimate 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.
* The Cacao Mineral Resource has increased 69% to 1,164 kt at 2.5g/t gold for
101,000 oz gold in the inferred mineral resource category. The deposit remains
‘open’ on strike and at depth.
* Updated geological interpretations and integrated litho-structural, weathering
and mineralisation models are integrated in the MRE and reflect the higher
degree of detail that is warranted for a Feasibility level of study on La
India Open Pit. This is supported by closer-spaced diamond drilling within the
upper portion of the main La India pit, along with additional detailed
deposit-scale surface mapping.
On 12 September 2022, the 2022 Feasibility Study demonstrates a robust and
economically viable base case for the La India open pit:
* 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
* An Internal Rate of Return (“IRR”) of 23% and a post tax, post upfront
capital cost NPV of US$86.9 million using a discount rate of 5% and price of
US$1,600 oz gold (Mineral Reserve Case).
* An Internal Rate of Return (“IRR”) of 43% and a post tax, post upfront
capital cost NPV of US$205.2 million using a discount rate of 5% and price of
US$2,000 oz gold.
* Low initial capital requirement of US$105.5 million (including contingency and
EPCM contract)
* Low average Life of Mine All-in Sustaining cash costs US$1,039 per oz gold
Post Period Highlights
* 12 October 2022. Jim Mellon assumed the Chairmanship of Condor Gold
* 26 October 2022. Feasibility Study Technical Report filed on SEDAR
Mark Child, Chief Executive of Condor Gold, commented:
“During the third quarter of 2022, Condor Gold continued on its journey of
de-risking the La India Gold Project, advancing the Project to near
construction-ready status. The Company’s strategy has been to develop the
fully permitted La India Project in 2 stages using the new SAG Mill that has
already been purchased. The delivery of a Feasibility Study on La India open
pit with 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 is a landmark and
further de-risks the Project. At US$1,600 oz gold, the La India open pit
Mineral Reserve produces total revenues of US$888 Million, the total operating
costs of mining, process and G&A are US$480M, leading to an operating
profit of US$408 Million or a 46% operating margin. After government and other
royalties, but before sustaining capital, the operating profit is US$355M,
which in Condor’s opinion is ample to repay any project debt on the
relatively low upfront capex. At US$2,000 oz gold after paying royalties, but
before sustaining capital the operating profit is US$563 Million. In reality,
two permitted high grade feeder pits will be added during the early years of
production thus increasing production ounces of gold. Early production is
targeted at 100,000 oz gold p.a..
The plan is to materially expand production with a stage 2 expansion by
converting existing Mineral Resources into Mineral Reserves and an associated
integrated mine plan. On 25 October 2021, the Company announced the results
of a Preliminary Economic Assessment and filed on SEDAR a technical report
entitled “Condor Gold Technical Report on the La Indian 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 a 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.
CONDOR GOLD PLC
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE THREE AND NINE MONTHS TO 30 SEPTEMBER 2022
Nine Nine Three Three months
months months months to 30.09.21
to 30.09.22 to 30.09.21 to 30.09.22 unaudited
unaudited unaudited unaudited £
£ £ £
Revenue - - - -
Share based payments (355,241) (351,554) (66,335) (151,963)
Administrative expenses (1,557,925) (1,254,133) (472,855) (439,864)
Operating loss Note 3 (1,913,166) (1,605,687) (539,191) (591,827)
Finance income 4,025 - 2,440 -
Loss before income tax (1,909,141) (1,605,687) (536,751) (591,827)
Income tax expense Note 4 - - - -
Loss for the period (1,909,141) (1,605,687) (536,751) (591,827)
Other comprehensive income/(loss):
Currency translation differences 6,317,109 (5,025) 3,046,404 619,603
Other comprehensive income/(loss) for the period 6,317,109 (5,025) 3,046,404 619,603
Total comprehensive profit/(loss) for the period 4,407,968 (1,610,712) 2,509,653 27,776
Loss attributable to:
Non-controlling interest - - - -
Owners of the parent (1,909,141) (1,605,687) (536,751) (591,827)
(1,909,141) (1,605,687) (536,751) (591,827)
Total comprehensive profit/(loss) attributable to:
Non-controlling interest - - - -
Owners of the parent 4,407,968 (1,610,712) 2,509,653 27,776
4,407,968 (1,610,712) 2,509,653 27,776
Profit/(loss) per share expressed in pence per share:
Basic and diluted (in pence) Note 7 (1.20) (1.19) (0.34) (0.44)
CONDOR GOLD PLC
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2022
30.09.22 31.12.21 30.09.21
unaudited audited unaudited
£ £ £
ASSETS:
NON-CURRENT ASSETS
Property, plant and equipment 8,255,620 7,473,433 7,569,949
Intangible assets 36,775,455 28,100,980 26,184,314
45,031,075 35,574,413 33,754,866
CURRENT ASSETS
Trade and other receivables 902,260 775,693 588,439
Cash and cash equivalents 570,638 2,072,046 554,449
1,472,898 2,847,739 1,142,888
TOTAL ASSETS 46,503,973 38,422,152 34,897,754
LIABILITIES:
CURRENT LIABILITIES
Trade and other payables 239,869 248,176 59,473
TOTAL LIABILITIES 239,869 248,176 59,473
NET CURRENT ASSETS 1,233,029 2,599,563 1,083,415
46,264,104 38,173,976 34,838,281
NET ASSETS
SHAREHOLDERS’ EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT
Called up share capital 31,725,906 29,326,143 26,983,286
Note 8
Share premium 43,455,783 42,528,627 40,858,206
Exchange difference reserve 3,835,071 (2,482,038) (2,367,126)
Retained earnings (32,752,656) (31,198,756) (30,636,085)
46,264,104 38,173,976 34,838,281
CONDOR GOLD PLC
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
AS AT 30 SEPTEMBER 2022
Share capital Share premium Exchange difference reserve Retained earnings Total Non controlling interest Total equity
£ £ £ £ £ £ £
At 1 January 2021 23,582,526 37,175,626 (2,362,101) (29,381,952) 29,164,099 - 29,164,099
Comprehensive income: - - - - - - -
Loss for the period - - - (1,605,687) (1,605,687) - (1,605,687)
Other comprehensive income:
Currency translation differences - - (5,025) - (5,025) - (5,025)
Total comprehensive income - - (5,025) (1,605,687) (1,610,712) - (1,610,712)
New shares issued 3,250,760 3,682,580 - - 6,933,340 - 6,933,340
Issue costs - - - - - - -
Share based payment - - - 351,554 351,554 - 351,554
At 30 September 2021 26,983,286 40,858,206 (2,367,126) (30,636,085) 34,838,281 - 34,838,281
At 1 January 2022 29,326,143 42,528,627 (2,482,038) (31,199,756) 38,173,976 - 38,173,976
Comprehensive income: - - - - - - -
Loss for the period - - - (1,909,141) (1,909,141) - (1,909,141)
Other comprehensive income:
Currency translation differences - - 6,317,109 - 6,317,109 - 6,317,109
Total comprehensive income - - 6,317,109 (1,909,141) 4,407,968 - 4,407,968
New shares issued 2,399,763 927,156 - - 3,326,919 - 3,326,919
Issue costs - - - - - - -
Share based payment - - - 355,241 355,241 - 355,241
At 30 September 2022 31,725,906 43,455,783 3,835,071 (32,752,656) 46,264,104 - 46,264,104
CONDOR GOLD PLC
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
AS AT 30 SEPTEMBER 2022
Nine months Nine months
to 30.09.22 to 30.09.21
unaudited unaudited
£ £
Cash flows from operating activities
Loss before tax (1,909,141) (1,605,687)
Share based payment 355,241 351,554
Depreciation charges 51,377 -
Finance income (4,025) -
(1,506,548) (1,254,133)
(Increase)/decrease in trade and other receivables (126,567) (474,030)
Increase/(decrease) in trade and other payables (8,307) (206,939)
Net cash absorbed in operating activities (1,641,422) (1,935,102)
Cash flows from investing activities
Purchase of intangible fixed assets (3,089,766) (4,344,306)
Purchase of tangible fixed assets (230,438) (4,506,964)
Interest received 4,025 -
Net cash absorbed in investing activities (3,316,179) (8,851,270)
Cash flows from financing activities
Net proceeds from share issue 3,326,919 6,933,340
Net cash generated in financing activities 3,326,919 6,933,340
Increase / (decrease) in cash and cash equivalents (1,630,682) (3,853,032)
Cash and cash equivalents at beginning of period 2,072,046 4,159,391
Exchange losses on cash and bank 129,274 248,090
Cash and cash equivalents at end of period 570,638 554,449
Capital Commitments
The Company has capital commitments of $300,000 due to First Majestic Silver.
- 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 Deborah Honing
(Investor Relations) +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 2022 Feasibility Study (2020 FS) ws filed on SEDAR on 26 October 2022 and
replaces the previously reported Preliminary Economic Assessment (“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.
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, but not limited to,
statements with respect to: the use of proceeds of the offering; the impact of
a Feasibility Study on, including investor confidence in, the Project; the
ability of the Company to access future financing; the ongoing mining dilution
and pit optimisation studies, and the incorporation of same into any mining
production schedule, future development and production plans at La India
Project. 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, 2020 dated March 31, 2021 and available
under the Company’s SEDAR profile at 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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