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Condor Gold announce 1Q21 financial results

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Global Mining Review,

Condor Gold has published its unaudited financial results for the three months ending 31 March 2021 (1Q21) and the Management’s discussion and analysis for the same period.

1Q21 highlights

  • Strong cash balance: £6.3 million as of end-March.
  • Mobilisation in January of a second diamond drill rig for the on-going 3300 m infill drilling campaign at La India Starter Pits was announced by the company. The drilling is on 25 m by 25 m drill spacing.
  • Completion of ground investigation drilling of 23 geotechnical drill holes for the final designs of the tailings storage facility and water retention reservoir and 58 geotechnical test pits on these areas and at the location of the processing plant.
  • Completion in February of a private placement of 9 523 810 new ordinary shares in the company at a price of 42p per share, including a Directors & CFO subscription of 4 871 414 shares to raise in aggregate gross proceeds of £4 million before expenses. The placing was arranged directly by the company with institutional and other investors.
  • In February, the company commenced drilling of a 5000 m exploration programme on the Cacao prospect with the objective of demonstrating the depth of the main gold mineralisation level and extending it along strike for up to 3000 m. Cacao, located only 4 km from the planned and permitted processing plant at La India, already hosts an inferred mineral resource of 662 000 t at 2.8 g/t gold for 60 000 oz gold defined by Condor from 2890 m drilling in 2019 is a highly prospective target, sitting on a major dilational opening between two major feeder zones (La India and Andrea Corridors). The Cacao vein is one of the thickest in the district, comparable to the main La India Vein. Mineral textures are identical to La India.
  • The results for the first 26 diamond drill holes for a combined 1296 m on the La India Starter Pit infill drilling programme were announced in March. The primary objective of the drilling programme is to provide 25 m spaced drill sampling within the two shallow (up to 35 m deep), high-grade starter pits within the main La India Open Pit mineral teserve. Results included LIDC404, which drilled 9.6 m true width at 3.98 g/t gold from surface.
  • On 15 March the company agreed to purchase a complete new semiautogenenuous mill “SAG mill) package from First Majestic Silver Corp. The purchase consideration is approximately US$6.5 million, including US$3 million payable in shares of the company at 50p per ordinary share (the consideration shares). The SAG mill package represents a key item of the plant required to bring the company’s La India Project into production. The SAG mill is estimated by Metso Outotec’s technical support group to have a throughput of up to 2300 tpd or 0.8 million tpy on a sustained basis, based on the metallurgical characteristics of the ore and mineralised material at Condor’s La India Project. Based on internal technical studies and mining dilution studies conducted by SRK Consulting (UK) Limited, initial production is expected to be 80 000 – 100 000 oz gold per annum.
  • On 30 March 2021, further drill results from the on-going diamond drill programme at La India Starter Pits. LIDC406 of 17.90 m (17.4 m true width) at 3.27 g/t gold from 24.55 m drill depth, including 2.1 m at 15.1 g/t gold is highly encouraging and adds considerable confidence to the geological model, the mineral resource and reserve calculation and mine plan.

Post period highlights

  • On 29 April 2021, Condor announced 44 drill holes for a combined 2290 m of infill and RC replacement drilling completed within La India Starter Pits. A drill intersect in LIDC413 of 22.05 m (21.6 m true width) at 6.48 g/t gold including 15 m true width at 8.68 g/t gold from 24.75 m drill depth in a starter pit is exceptional in terms of width and grade near surface. The drill intercept in LIDC416 of 16 m (15.7m true width) at 5.30 g/t gold from 18.35 m drill depth including 5.8 m true width at 12.35g/t is also very impressive.

Mark Child, Chairman and CEO, commented: “Condor has made significant progress during 1Q21, advancing and de-risking the La India Project to a ‘shovel ready’ status ahead of construction. There are several areas worth highlighting and explaining – when combined they progress Condor’s strategy of constructing and operating and mine producing approximately 100 000 oz gold p.a. and demonstrating a 5 million oz Gold District.

“The 3500m infill drilling programme at La India Starter pits has nearly been completed. The objective is to confirm the geological model by drilling on 25 m by 25 m drill spacing with PQ, triple tube diamond core drilling and replace reverse circulation drill holes. The drill results have been excellent, a highlight is drill intersect in LIDC413 of 22.05 m (21.6 m true width) at 6.48 g/t gold including 15 m true width at 8.68 g/t gold from 24.75 m drill depth. The La India Starter pits represent circa 10% of the main La India opencast mineral reserve, are shallow, within 35 m of the surface and contain 455 000 t at 4.17g/t gold for 59 674 oz gold using a 2 g/t cut-off grade and have a low strip ratio. At US$1700/oz gold price, the operating cash flow is estimated to be approximately US$60 million. The intention is to mine them early to quicken the payback period and enhance the project’s economics.

“The Feasibility Level Studies on the tailings storage facility and water retention dam are 75%- completed. The Site Wide Water Balance study is significantly advanced and due to be completed this summer. Site clearance and preparation of 11 ha. in the area of the processing plant is advanced with the main culverts and access road completed.

“The purchase of a complete new SAG Mill package from First Majestic Silver for US$6.5 million marks a step change for the project as the mill has been sized at 2300 tpd (0.8 million tpy) with initial production estimated to range from 80 000 to 100 000 oz gold per annum from the three fully permitted opencast. This marks stage 1 of production; the design and layout of the processing plant will include the ability to double the production capacity. The new mill is 100% ready to be shipped and has been manufactured and supplied with warrantees by Metso Outotec. The acceptance of US$3 million worth of Condor’s shares at 50p by First Majestic Silver, as part of the purchase consideration, is a vote of confidence in the project.

“The 5000 m drilling program on the Cacao vein is aimed at demonstrating a 500 000 oz gold potential at Cacao, which currently hosts a small inferred mineral resource of 662 000 t at 2.8 g/t gold for 60 000 oz gold over a 500 m strike length Cacao, but is open at depth and along strike in both directions. The drill programme is designed to test to depth and along a 3000 m strike length and approximately half the drilling has been completed. The vein width is comparable to the best intersections at La India and the hanging wall of the vein is increasingly stockworked, as at La India.”

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