Flying high in Nicaragua
5 April 2015
Condor Gold PLC (LON: CNR) is a junior exploration company listed on AIM focused on revitalising the historic La India gold mining district of Nicaragua. To date the company has produced a global N.I. 43-101 mineral resource of 2.33m ounces of high-grade gold including open-pit resources of more than 1Moz at 3.0g/t gold.
The Dec 2014 N.I. 43-101 pre-feasibility study demonstrated the 675,000oz open pit reserve could produce 80,000 oz gold p.a. for seven years, while two preliminary economic assessments completed at the same time show the addition of two feeder pits would increase open pit production to 100,000oz p.a. for eight years, while the inclusion of underground resources would increase annual production to 140,000oz gold. All-in sustaining cash costs are under US$700 per oz gold for each production scenario, which is significantly below the industry average. The IRR is more than 25 per cent.
Nicaragua is a mining-friendly jurisdiction; gold is the second largest export. In 2015, Condor is de-risking the project by applying for permits and acquiring surface rights. Condor has recently started a 4,000m drilling programme aimed at demonstrating further upside in La India Project. Condor owns 100 per cent of a 280km2 mining district and Condor’s geologists believe there is scope to significantly increase the size of the gold resource and reserves.
Condor’s market cap is only £28m, valuing the current resource at only US$15 per oz in the ground compared with a gold price of around US$1,200. Recent M&A activity has valued gold exploration companies at between 5 per cent to 10 per cent of the current gold price.
Mark Child is executive chairman and CEO, Condor Gold
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