Condor Gold announces La India feasibility study

12th Sep 2022 16:31

(Sharecast News) - Condor Gold announced the results and details of a feasibility study on the La India open pit on Monday, supporting a probable mineral reserve of 7.3 million tonnes at 2.56 grams of gold per tonne for 602,000 ounces of gold.

The AIM-traded firm said the study also supported a mine with an internal rate of return of 23%, and a post-tax and post-upfront capital cost net present value of $86.9m using a discount rate of 5% and price of $1,600 per ounce of gold.

It said the 2022 feasibility study brought the level of confidence for the project to the "industry standard" of engineering design, sufficient to support capital and operating cost estimates within 15%.

The economic analysis in the study, including the internal rate of return and net present value estimates, was based on the La India open pit only and did not include the mineral resources at the Mestiza, America, Central Breccia or El Cacao potential extractable as open pits, or the underground mineral resources at the La India, Mestiza, America, El Cacao, San Lucas or Cristalito-Tatescame vein sets.

Condor said it believed there was a "high degree of certainty" that additional open pit and underground mineral resources could be converted to mineral reserves and added to the mine plan through further studies.

"The company's strategy has been to develop the fully permitted La India Project in two stages using the new SAG mill that has already been purchased," said chairman and chief executive officer Mark Child.

"The delivery of a feasibility study on La India open pit with an average of 81,524 ounces of gold per annum for the initial six years for a relatively low total upfront capital cost of $106m is a landmark and further de-risks the project.

"At $1,600 per ounce of gold, the La India open pit mineral reserve produces total revenues of $888m."

Child noted that the total operating costs of mining, process and general and administrative expenses would be $480m, leading to an operating profit of $408m, or a 46% operating margin.

"After government and other royalties, but before sustaining capital, the operating profit is $355m, which in Condor's opinion is ample to repay any project debt on the relatively low upfront capex.

"At $2,000 per ounce of gold after paying royalties, but before sustaining capital the operating profit is $563m.

"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 ounces of gold per annum."

At 1613 BST, shares in Condor Gold were up 12.62% at 29p.

Reporting by Josh White at Sharecast.com.