Condor Gold
Condor Gold Plc is a UK based AIM listed exploration Company focused on proving a large commercial reserve on its 100% owned La India Project in Nicaragua.
At 18th September 2012, La India Project has a Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Standards resource of 2.4M oz gold at 4.6g/t including 751,000 oz at 4.4g/t in the Indicated Category, as required by NI 43-101 . La India Project resource includes a high grade open pit resource of 954,000 oz gold at 3.6g/t gold. A preliminary economic assessment is currently underway. In addition to the La India Resource, 87k oz gold on the Rio Luna Resource takes Condor's total resource to 2.5m oz gold in Nicaragua to CIM standards.
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Condor Resources - low cost gold producer in the making?

Harry Norman from Proactive Investors talks to Mark Child, Executive Chairman of Condor Resources. Listed on the AIM Market Mining Sector, stock code CNR, share price 4.63 pence, market capitalisation £28.3 million sterling. www.condorresourcesplc.com.
Harry Norman: Condor Resources recently published a Mining Concept Study prepared by SRK Consultants for your flagship La India Gold project in Nicaragua. Please talk us through the salient features of this report and the conclusions you have drawn from it.
Mark Child: SRK produced the Mining Concept Study on Condor's 1.62 million ounce of gold at 5.6g/t on La India Project. It concludes that an 80,000 ounce per annum mill is technically feasible, and economically viable. They've used some pretty tough parameters with $1200 gold, 2.5 gram per tonne cut off and a 1.2 metre minimum mining width, they've excluded any open pit potential at this stage. The net present value ranges up to 150 million US dollars, three times Condor's current market capitalisation. Internal rates of return vary from 41 to 84% which is highly economic. I view this as very much a first pass report, it can be improved on, as we expand the resource to 2 million ounces this year and we prove open pit potential we would look to increase the size of the mill to 100,000 ounces gold production per annum.
Harry Norman: How seriously should investor take SRK Consultant's conclusion that operating costs are between 439 and 584 dollars per ounce of gold are possible at La India?
Mark Child: Very seriously, SRK have been extremely thorough in their benchmarking which is approximately 30% of the whole report, that's benchmarking all different mining costs across South America, Central America and Mexico, Nicaragua is one of the lowest cost producers in the world. For example, the minimum wage is $150 per month, manual workers we pay 6 or $7 a day that's part of the reason the other main reason is the high grade.
Harry Norman: Please will you talk us through the current state of gold resources for the La India Project which you are able to consolidate last December?
Mark Child: Yes we had this SRK report out for 1.62 million ounces gold in December last year. We had 265,000 ounces in the indicated category, at 7 g/t, the balance and in the inferred category. We divided the resource up into 3 main sets which are separated by about a kilometre to a kilometre and a half, which will feed a mill on site, La India vein set 730,000 ounces, the America vein set 405,000 ounces and the Mestiza vein set of 334,000 ounces.
Harry Norman: Mark what are your current goals for developing the resources at La India and what work is underway there?
Mark Child: We are targeting our 2 million ounce resource this year of which half a million will be in the indicated category, we've started drilling with two drill rigs this week and we'll go up to a third in the next few weeks. The Soviets in 1991 after 5 years of exploration work and 12,000 metres of drilling estimated at a 2.4 million ounce gold resource. Where we have targeted, comprehensively the La India set we've exceeded the Soviet resource by 50% and come out with 730,000 ounces in that main set. If we could do that across the whole project, to give an indication of the potential, we would be up 3.6 million ounces which would be a world class deposit. That is not what we're estimating at the moment but at least it gives an indication of the potential of the La India project. So this year we're also focusing on the economics of a commercial mine i.e., getting more into the indicated category and we're looking to prove open pit potential where we're confident between 20 and 30% of the eventual production will be in open pit.
Harry Norman: B2 Gold, a TSX C$1.5 billion market cap company, has just acquired the Trebol and El Pavon gold properties in Nicaragua, what are your thoughts about the value B2 Gold places on these properties and the way the market currently values Condor Resources?
Mark Child: B2 Gold's paid 20 million US Dollars for 40% interest in those properties, they already have 60% via earn-ins and spending the money in the ground and drilling, so it values the two properties at US$50 million, the same as Condor's own market cap. There is no 43-101 or JORC Code resource on properties, there is an indication by a previous explorer of 340,000 ounces to non-JORC non 43-101. If you were to take that as an indication because that's all we know, they valued the resources in the ground at $145 per ounce, if you apply that to Condor's 1.62 million ounces in the ground at La India, just on that alone we'd be worth 25p per share but I do suspect that B2 Gold think there's more than half a million ounces on this project but clearly they've got to drill it and prove it.
Harry Norman: Please would you bring us up to date with Condor Resources other projects in Nicaragua Mark?
Mark Child: In the fourth quarter of last year, Condor announced a mainden JORC resource for the Rio Luna Project of 187,000 ounces at 3.9 grams per tonne, this has the potential to be 300,000 to 400,000 ounce project which we would hope to drill at some stage in the future. The other 3 projects; we're not doing very much but they offer considerable upside as they host historic mines or have a lot of historic exploration on them.
Harry Norman: What progress can you report with the mining embargo in El Salvador and Condor's properties there?
Mark Child: Condor has just over 1million ounces of gold equivalent in El Salvador of which 35% is of silver content we've been under a moratorium for nearly 4 years, the government has engaged the Tau Group of Spain to conduct a strategic environmental study on benefits of mining to the public of El Salvador, that was given to the ministry six months ago and according to our intelligence, just last week, we've seen copies of it posted on the web. We've asked the Tau Group whether it is indeed the full and final report. If so, we would hope that it will be finally released in the next few weeks, which will be a step in the right direction.
Harry Norman: Having just raised £2.5 million growth through a placing, please would you talk us through the company's capital structure and financial situation going forward Mark?
Mark Child: The Company has 610 million shares in issue, no warrants and about 6 and a half percent in employee options. The company is fully funded for 10,000 metres of drilling which we will complete this year and that should take the resource to 2 million ounces. The shareholder base, I'm the largest shareholder at just over 11%, and am very committed to making this work. Oracle Investment has 8% and Macquarie Bank has 5%. The other directors between them have 1 and a half per cent.
Harry Norman: What can investors expect from Condor Resources over the next 12 to 18 months?
Mark Child: Well we've just started this week with two drill rigs again; we'll add a third drill rig in the next few weeks. We're going to go through scoping studies and feasibility studies, people can expect positive drill results, we are confident in getting,, we will pass a 2 million ounce resource with half a million indicated. We're going to also do metallurgical, in fact we have 25 kilos sitting in the met labs in the States at the moment, geotechnical and environmental and we're also bringing silver credit, which is one for one ratio into the JORC Code so if we hit the two million ounces of gold, we should also have two million ounces of silver which will be a nice bonus.
Harry Norman: Geologically speaking Nicaragua is part of the Pacific ring of fire and four tectonic plates meet near the country. Do you think Nicaragua is particularly underrated in the UK as a gold exploration and mining destination Mark?
Mark Child: Yes it certainly is. Condor is the only UK incorporated AIM listed company, that's operating in Central America let alone Nicaragua. There are 7 companies operating there, the other 6 are all from North America and Canada. It's been a great place to operate, gold is their third biggest export, it's been stable for over 20 years, it's a democracy but it's very much misunderstood in Europe.


Other Condor Gold news
- Condor Gold kicks off work to consider La India pit dynamics
2013-04-25 - Condor Gold announces next stage of drilling programme
2013-04-24 - UPDATE: Condor Gold unveils further positive La India results
2013-04-15 - Condor Gold stakeholder passes on third funding top-up
2013-03-22 - Condor Gold's drilling continues to make the grade
2013-03-04