TIDMCNR
RNS Number : 1171M
Condor Gold PLC
06 May 2020
Condor Gold plc
22a St James's Square
London
SW1Y 4JH
Tel: +44 (0) 207 493 2784
6 May 2020
Condor Gold Plc
("Condor" or the "Company")
Condor Receives Permit for High-Grade America Open Pit,
Increasing Total Permitted Open Pit Mineral Resources To 1.12M
Million Oz Gold
Condor Gold (AIM: CNR; TSX: COG) is pleased to announce that it
has been granted an Environmental Permit for the development and
exploitation of gold from the high grade America open pit ("the
Permit"). The America open pit hosts 114 thousand tonnes ("Kt") at
a grade of 8.1 g/t gold (30,000 oz contained gold) in the Indicated
Mineral Resource category and 677Kt at a grade of 3.1 g/t gold
(67,000 oz contained gold) in the Inferred Mineral Resource
category. The America open pit compliments the already permitted La
India open pit and the recently permitted high grade Mestiza open
pit. The La India open pit hosts 8,377Kt at a grade of 3.1 g/t gold
(837,000 oz contained gold) in the Indicated Mineral Resource
category and 883Kt at grade of 2.4 g/t gold (68,000 oz contained
gold) in the Inferred Mineral Resource category. La India open pit
has a robust, economically viable Pre-Feasibility Study ("PFS")
with Mineral Reserves of 6.9 million tonnes ("Mt") at 3.0 g/t for
675,000 oz gold. The Mestiza open pit hosts 92Kt at a grade of 12.1
g/t gold (36,000 oz contained gold) in the Indicated Mineral
Resource category and 341Kt at a grade of 7.7 g/t gold (85,000 oz
contained gold) in the Inferred Mineral Resource category .
Following the permitting of the America open pit Condor has 1.12M
oz gold open pit Mineral Resources permitted for extraction
inclusive of a Mineral Reserve of 6.9Mt at 3.0g/t gold for 675,000
oz gold.
Highlights:
-- 1.12 million oz gold open pit Mineral Resources, including
Mineral Reserves permitted for extraction and production from 3
open pits
-- The permitted La India open pit which hosts 8,377Kt at a
grade of 3.1 g/t gold (837,000 oz contained gold) in the Indicated
Mineral Resource category and 883Kt at grade of 2.4 g/t gold
(68,000 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 contained gold) in the Indicated Mineral Resource
category and 677Kt at a grade of 3.1 g/t gold (67,000 oz contained
gold) in the Inferred Mineral Resource category
-- The permitted Mestiza open pit hosts 92Kt at a grade of 12.1
g/t gold (36,000 oz contained gold) in the Indicated Mineral
Resource category and 341Kt at a grade of 7.7 g/t gold (85,000 oz
contained gold) in the Inferred Mineral Resource category
-- America open pit permitted to deliver robust diluted tonnage
of 649Kt at 3.83g/t gold for 80,000 oz gold, complimenting the
recently permitted Mestiza open pit permitted to deliver mill feed
of 600Kt at 5.76 g/t gold for 111,100 oz gold (See RNS 4 March
2020)
-- The addition of a third permitted high grade open pit adds
flexibility to the mine schedule, potentially improving project
economics and extending the life of mine
Mark Child, Chairman and CEO commented:
"Condor has been granted the key Environmental Permit to develop
and exploit gold from a third high grade open pit. When added to
the high grade La India open pit and Mestiza open pit, Condor has
1.12 million oz gold open pit Mineral Resources, including Mineral
Reserves permitted for extraction. Condor also has the permit to
construct and develop a processing plant with capacity of up to
2,800tpd at La India Project. The permitted high grade America open
pit and recently permitted Mestiza open pit adds flexibility to the
mine schedule, potentially improving project economics and
extending the life of mine."
Background
La India Project, Nicaragua, contains a Mineral Resource of
9,850Kt at 3.6 g/t gold for 1,140Koz gold in the Indicated category
and 8,479Kt at 4.3g/t gold for 1,179Koz gold in the Inferred
category (See RNS dated 28 January, 2019). Condor's focus has been
on developing the open pit Mineral Resources within 3 open pits,
which are inclusive of a Mineral Reserve of 6.9 Mt at 3.0 g/t gold
for 675,000 oz gold, into production.
Condor has been granted an Environmental Permit to construct and
operate a processing plant with capacity of up to 2,800 tonnes per
day ("tpd") and develop the associated mine site infrastructure for
a new mine at its La India Project (the "Main Permit"). The Main
Permit is for development and extraction of ore from La India open
pit, subject to certain conditions. Production from La India open
pit is estimated to be between 80,000 to 100,000 oz gold per annum.
On 22 January 2020, Condor received a letter from the Ministry of
Environment and Natural Resources ("MARENA") detailing an
extension, as provided for under the terms of the Permit, to
complete the conditions of the Main Permit by 27 July 2021 (See RNS
dated 28 January 2020).
On 21 November 2019, Condor submitted Environmental and Social
Impact Assessments ("ESIAs") to MARENA for the Environmental
Permits for the development and extraction of contained gold from
the America and Mestiza open pits. Each ESIA is over 600 pages in
length, including the appendices and summarises 18 mining,
environmental and social technical studies. (See RNS 22 November
2019). Public Consultations were held on 28 February 2020 for both
feeder pits.
Significance of Permitting the America Open Pit
The America open pit has a higher gold grade than the La India
open pit and adds a third permitted open pit, following the
permitting of the Mestiza open pit announced last week ( See RNS 29
April 2020). The America and Mestiza open pits are likely to be
mined earlier to reduce the payback period on the plant and
equipment and improve the internal rate of return. La India open
pit has lower quartile industry all-in-sustaining-cash cost of
US$690 per oz gold in the PFS which used a gold price of $1,250/oz.
(See RNS 14 November, 2014). A third permitted open pit adds
flexibility to the mine schedule.
The diluted and modified mining model for the America open pit,
undertaken by SRK Consulting (UK) Limited ("SRK"), reported a total
diluted tonnage of 649Kt at 3.83 g/t gold for 80,000 oz gold within
the 1,500 USD/oz optimized pit shell used in the 2019 Mineral
Resource Estimate update. A cut-off grade of 1.5g/t gold was used.
(See RNS 4 March 2020).
The America open pit is located within easy trucking distance
and less than 2 km from the location of the permitted processing
plant.
The Permit granted by MARENA for the Mestiza open pit is for an
initial 8 year period from the date notification is received by
MARENA that production is due to commence and can be renewed for
further periods. There are a number of conditions associated with
the Permit, ranging from the appointment of an Environmental
Manager to adherence to environmental management programs as
detailed in the ESIA. For example, priority is to be given to
hiring local employees and a reforestation programme will be
instigated that plants 10 new trees for every tree cut down.
Exploitation is required to commence within 18 months of the grant
of the Permit although this can be extended for a further two 18
month periods.
The diluted and modified mining model for the permitted La India
open pit, undertaken internally by Condor, reports a total diluted
tonnage of 7,284Kt at 2.80g/t gold for 656,000 oz gold, excluding
low grade material. The total permitted mill feed combining La
India, Mestiza and America open pits is 8,829Kt at 3.09g/t gold for
847,000 oz gold. Assuming a 92% metallurgical recovery, gold
production is estimated to be 779,000 oz gold.
It should be noted that the Company is running a number of
mining studies ahead of a construction decision, which are part of
ongoing work being done by Condor to optimize the Project; such
studies are yet to be finalized and so do not replace the 2019 MRE
or the technical report entitled "Technical Report on the La India
Gold Project, Nicaragua, December 2014" dated 13 November 2017 with
an effective date of 21 December 2014 (the "Technical Report"),
both of which remain current.
Looking forward, Condor intends to complete the ongoing mining
dilution studies and pit optimisation studies, which are underway,
and incorporate the results of those studies in a mine production
schedule. Ahead of production, Condor will complete infill drilling
on the Mestiza and America open pits to convert the majority of
mineralised material to the Indicated Mineral Resource category.
The underground Mineral Resources of 1.27Mt at a grade of 5.8 g/t
gold, for 238,000 oz gold in the Indicated category and 5.47Mt at a
grade of 5.1 g/t gold, for 889,000 oz gold in the Inferred
category, will be permitted and added to the mine plan once in
production.
- Ends -
For further information please visit www.condorgold.com or
contact:
Condor Gold plc Mark Child, Chairman and 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
Blytheweigh Tim Blythe, Camilla Horsfall and Megan
Ray
+44 (0) 20 7138 3204
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.
In August 2018, the Company announced that the Ministry of the
Environment in Nicaragua had granted the Company 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 to be the master permit for mining operations
in Nicaragua. Condor Gold published a PFS on the La India Project
in December 2014, as summarised in the Technical Report. The PFS
details an open pit gold Mineral Reserve in the Probable category
of 6.9 Mt at 3.0 g/t gold for 675,000 oz gold, producing 80,000 oz
gold per annum for seven years. La India Project contains a Mineral
Resource of 9,850Kt at 3.6 g/t gold for 1,140Koz gold in the
Indicated category and 8,479Kt at 4.3g/t gold for 1,179Koz gold in
the Inferred category. The Indicated Mineral Resource is inclusive
of the Mineral Reserve.
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 Mineral Resource Estimate has been completed by Ben Parsons,
a Principal Consultant (Resource Geology) with SRK Consulting
(U.S.), Inc, who is a Member of the Australian Institute of Mining
and Metallurgy, MAusIMM(CP). Ben Parsons has some nineteen years'
experience in the exploration, definition and mining of precious
and base metal Mineral Resources. Ben Parsons is a full-time
employee of SRK Consulting (U.S.), Inc, an independent consultancy,
and has sufficient experience which is relevant to the style of
mineralisation and type of deposit under consideration, and to the
type of activity which he is undertaking to qualify as a "qualified
person" as defined under National Instrument 43-101 - Standards of
Disclosure for Mineral Projects ("NI 43-101") of the Canadian
Securities Administrators and as required by the June 2009 Edition
of the AIM Note for Mining and Oil & Gas Companies. Ben Parsons
consents to the inclusion in the announcement of the matters based
on their information in the form and context in which it appears
and confirms that this information is accurate and not false or
misleading.
The mining dilution studies reported for the Mestiza and America
deposits have been performed under the supervision of Dr Tim Lucks,
Principal Consultant (Geology & Project Management), of SRK
Consulting (UK) Limited, who is a Member of the Australian
Institute of Mining and Metallurgy, MAusIMM(CP). Tim Lucks is an
independent "qualified person" as such term is defined in NI
43-101. Tim Lucks consents to the inclusion in the announcement
that material that relates to the America and Mestiza dilution
studies, in the form and context in which it appears and confirms
that this information is accurate and not false or misleading
The technical and scientific information in this press release
has been reviewed, verified and approved by Gerald D. Crawford,
P.E., who is a "qualified person" as defined by NI 43-101 and is
the Chief Technical Officer of Condor Gold plc.
Technical Information
Certain disclosure contained in this news release of a
scientific or technical nature has been summarised or extracted
from the technical report entitled "Technical Report on the La
India Gold Project, Nicaragua, December 2014", dated November 13,
2017 with an effective date of December 21, 2014 (the "Technical
Report"), prepared in accordance with NI 43-101. The Technical
Report was prepared by or under the supervision of Tim Lucks,
Principal Consultant (Geology & Project Management), Gabor
Bacsfalusi, Principal Consultant (Mining), Benjamin Parsons,
Principal Consultant (Resource Geology), each of SRK Consulting
(UK) Limited, and Neil Lincoln of Lycopodium Minerals Canada Ltd.,
each of whom is an independent "qualified person" as defined by NI
43-101 .
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: 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, resources and reserves; 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, 2018 dated March 22, 2019, 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.
Technical Glossary
Mineral Resource
Mineral Resources are sub-divided, in order of increasing
geological confidence, into Inferred, Indicated and Measured
categories. An Inferred Mineral Resource has a lower level of
confidence than that applied to an Indicated Mineral Resource. An
Indicated Mineral Resource has a higher level of confidence than an
Inferred Mineral Resource but has a lower level of confidence than
a Measured Mineral Resource.
A Mineral Resource is a concentration or occurrence of solid
material of economic interest in or on the Earth's crust in such
form, grade or quality and quantity that there are reasonable
prospects for eventual economic extraction.
The location, quantity, grade or quality, continuity and other
geological characteristics of a Mineral Resource are known,
estimated or interpreted from specific geological evidence and
knowledge, including sampling.
Material of economic interest refers to diamonds, natural solid
inorganic material, or natural solid fossilized organic material
including base and precious metals, coal, and industrial
minerals.
The term Mineral Resource covers mineralization and natural
material of intrinsic economic interest which has been identified
and estimated through exploration and sampling and within which
Mineral Reserves may subsequently be defined by the consideration
and application of Modifying Factors. The phrase 'reasonable
prospects for eventual economic extraction' implies a judgment by
the Qualified Person in respect of the technical and economic
factors likely to influence the prospect of economic extraction.
The Qualified Person should consider and clearly state the basis
for determining that the material has reasonable prospects for
eventual economic extraction. Assumptions should include estimates
of cutoff grade and geological continuity at the selected cut-off,
metallurgical recovery, smelter payments, commodity price or
product value, mining and processing method and mining, processing
and general and administrative costs. The Qualified Person should
state if the assessment is based on any direct evidence and
testing.
Interpretation of the word 'eventual' in this context may vary
depending on the commodity or mineral involved. For example, for
some coal, iron, potash deposits and other bulk minerals or
commodities, it may be reasonable to envisage 'eventual economic
extraction' as covering time periods in excess of 50 years.
However, for many gold deposits, application of the concept would
normally be restricted to perhaps 10 to 15 years, and frequently to
much shorter periods of time.
Inferred Mineral Resource
An Inferred Mineral Resource is that part of a Mineral Resource
for which quantity and grade or quality are estimated on the basis
of limited geological evidence and sampling. Geological evidence is
sufficient to imply but not verify geological and grade or quality
continuity.
An Inferred Mineral Resource has a lower level of confidence
than that applying to an Indicated Mineral Resource and must not be
converted to a Mineral Reserve. It is reasonably expected that the
majority of Inferred Mineral Resources could be upgraded to
Indicated Mineral Resources with continued exploration.
An Inferred Mineral Resource is based on limited information and
sampling gathered through appropriate sampling techniques from
locations such as outcrops, trenches, pits, workings and drill
holes. Inferred Mineral Resources must not be included in the
economic analysis, production schedules, or estimated mine life in
publicly disclosed Pre-Feasibility or Feasibility Studies, or in
the Life of Mine plans and cash flow models of developed mines.
Inferred Mineral Resources can only be used in economic studies as
provided under NI 43-101.
There may be circumstances, where appropriate sampling, testing,
and other measurements are sufficient to demonstrate data
integrity, geological and grade/quality continuity of a Measured or
Indicated Mineral Resource, however, quality assurance and quality
control, or other information may not meet all industry norms for
the disclosure of an Indicated or Measured Mineral Resource. Under
these circumstances, it may be reasonable for the Qualified Person
to report an Inferred Mineral Resource if the Qualified Person has
taken steps to verify the information meets the requirements of an
Inferred Mineral Resource.
Indicated Mineral Resource
An Indicated Mineral Resource is that part of a Mineral Resource
for which quantity, grade or quality, densities, shape and physical
characteristics are estimated with sufficient confidence to allow
the application of Modifying Factors in sufficient detail to
support mine planning and evaluation of the economic viability of
the deposit.
Geological evidence is derived from adequately detailed and
reliable exploration, sampling and testing and is sufficient to
assume geological and grade or quality continuity between points of
observation.
An Indicated Mineral Resource has a lower level of confidence
than that applying to a Measured Mineral Resource and may only be
converted to a Probable Mineral Reserve.
Mineralization may be classified as an Indicated Mineral
Resource by the Qualified Person when the nature, quality, quantity
and distribution of data are such as to allow confident
interpretation of the geological framework and to reasonably assume
the continuity of mineralization. The Qualified Person must
recognize the importance of the Indicated Mineral Resource category
to the advancement of the feasibility of the project. An Indicated
Mineral Resource estimate is of sufficient quality to support a
Pre-Feasibility Study which can serve as the basis for major
development decisions.
Mineral Reserve
Mineral Reserves are sub-divided in order of increasing
confidence into Probable Mineral Reserves and Proven Mineral
Reserves. A Probable Mineral Reserve has a lower level of
confidence than a Proven Mineral Reserve.
A Mineral Reserve is the economically mineable part of a
Measured and/or Indicated Mineral Resource. It includes diluting
materials and allowances for losses, which may occur when the
material is mined or extracted and is defined by studies at
Pre-Feasibility or Feasibility level as appropriate that include
application of Modifying Factors. Such studies demonstrate that, at
the time of reporting, extraction could reasonably be
justified.
The reference point at which Mineral Reserves are defined,
usually the point where the ore is delivered to the processing
plant, must be stated. It is important that, in all situations
where the reference point is different, such as for a saleable
product, a clarifying statement is included to ensure that the
reader is fully informed as to what is being reported.
The public disclosure of a Mineral Reserve must be demonstrated
by a Pre-Feasibility Study or Feasibility Study.
Mineral Reserves are those parts of Mineral Resources which,
after the application of all mining factors, result in an estimated
tonnage and grade which, in the opinion of the Qualified Person(s)
making the estimates, is the basis of an economically viable
project after taking account of all relevant Modifying Factors.
Mineral Reserves are inclusive of diluting material that will be
mined in conjunction with the Mineral Reserves and delivered to the
treatment plant or equivalent facility. The term 'Mineral Reserve'
need not necessarily signify that extraction facilities are in
place or operative or that all governmental approvals have been
received. It does signify that there are reasonable expectations of
such approvals.
'Reference point' refers to the mining or process point at which
the Qualified Person prepares a Mineral Reserve. For example, most
metal deposits disclose mineral reserves with a "mill feed"
reference point. In these cases, reserves are reported as mined ore
delivered to the plant and do not include reductions attributed to
anticipated plant losses. In contrast, coal reserves have
traditionally been reported as tonnes of "clean coal". In this coal
example, reserves are reported as a "saleable product" reference
point and include reductions for plant yield (recovery). The
Qualified Person must clearly state the 'reference point' used in
the Mineral Reserve estimate.
Probable Mineral Reserve
A Probable Mineral Reserve is the economically mineable part of
an Indicated, and in some circumstances, a Measured Mineral
Resource. The confidence in the Modifying Factors applying to a
Probable Mineral Reserve is lower than that applying to a Proven
Mineral Reserve.
The Qualified Person(s) may elect, to convert Measured Mineral
Resources to Probable Mineral Reserves if the confidence in the
Modifying Factors is lower than that applied to a Proven Mineral
Reserve. Probable Mineral Reserve estimates must be demonstrated to
be economic, at the time of reporting, by at least a
Pre-Feasibility Study.
Pre-Feasibility Study (Preliminary Feasibility Study)
The CIM Definition Standards requires the completion of a
Pre-Feasibility Study as the minimum prerequisite for the
conversion of Mineral Resources to Mineral Reserves.
A Pre-Feasibility Study is a comprehensive study of a range of
options for the technical and economic viability of a mineral
project that has advanced to a stage where a preferred mining
method, in the case of underground mining, or the pit
configuration, in the case of an open pit, is established and an
effective method of mineral processing is determined. It includes a
financial analysis based on reasonable assumptions on the Modifying
Factors and the evaluation of any other relevant factors which are
sufficient for a Qualified Person, acting reasonably, to determine
if all or part of the Mineral Resource may be converted to a
Mineral Reserve at the time of reporting. A Pre-Feasibility Study
is at a lower confidence level than a Feasibility Study.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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