Condor Gold receives permit for high-grade America opencast mine

The America opencast mine hosts 114 000 t at a grade of 8.1 g/t gold (30 000 oz contained gold) in the indicated mineral resource category and 677 000 t at a grade of 3.1 g/t gold (67 000 oz contained gold) in the inferred mineral resource category. The America opencast mine compliments the already permitted La India opencast mine and the recently permitted high grade Mestiza opencast mine. La India hosts approximately 8.4 million t at a grade of 3.1 g/t gold (837 000 oz contained gold) in the indicated mineral resource category and 883 000 t at grade of 2.4 g/t gold (68 000 oz contained gold) in the inferred mineral resource category. La India has a robust, economically viable Pre-Feasibility Study (PFS) with mineral reserves of 6.9 million t at 3.0 g/t for 675 000 oz gold. The Mestiza opencast mine hosts 92 000 t at a grade of 12.1 g/t gold (36 000 oz contained gold) in the indicated mineral resource category and 341 000 t 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 opencast mine, Condor has 1.12 million oz gold opencast mineral resources permitted for extraction inclusive of a mineral reserve of 6.9 million t at 3.0g/t gold for 675 000 oz gold.

Mark Child, Chairman and CEO, commented: “Condor has been granted the key Environmental Permit to develop and exploit gold from a third high grade opencast. When added to the high grade La India opencast and Mestiza opencast, Condor has 1.12 million oz gold opencast 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 2800 tpd at La India Project. The permitted high-grade America opencast and recently permitted Mestiza opencast 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 approximately 9.9 million t at 3.6 g/t gold for approximately 1.1 million oz gold in the indicated category and approximately 8.5 million t at 4.3g/t gold for approximately 1.2 million oz gold in the inferred category. Condor’s focus has been on developing the opencast mineral resources within 3 opencasts, which are inclusive of a mineral reserve of 6.9 million t 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 2800 tpd and develop the associated mine site infrastructure for a new mine at its La India Project. This main permit is for development and extraction of ore from La India opencast mine, subject to certain conditions. Production from La India 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.

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 opencast mines. Public Consultations were held on 28 February 2020 for both mines.

Significance of permitting the America opencast

The America opencast mine has a higher gold grade than La India and adds a third permitted opencast mine, following the permitting of the Mestiza opencast. The America and Mestiza opencasts 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 has lower quartile industry all-in-sustaining-cash cost of US$690/oz gold in the PFS which used a gold price of $1250/oz. A third permitted opencast mine adds flexibility to the mine schedule.

The diluted and modified mining model for the America opencast, undertaken by SRK Consulting Ltd, reported a total diluted tonnage of 649 000 t at 3.83 g/t gold for 80 000 oz gold within the US$1500 /oz optimised pit shell used in the 2019 Mineral Resource Estimate update. A cut-off grade of 1.5g/t gold was used.

The America opencast mine 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 Mestiza 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. 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 opencast mine, undertaken internally by Condor, reports a total diluted tonnage of approximately 7.3 million t 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 opencast mines is approximately 8.8 million t 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 optimise the project.

The underground mineral resources of 1.27 million t at a grade of 5.8 g/t gold, for 238 000 oz gold in the indicated category and 5.47 million t 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.

Read the article online at: https://www.globalminingreview.com/mining/07052020/condor-gold-receives-permit-for-high-grade-america-opencast-mine/