TIDMCNR
RNS Number : 4422P
Condor Gold PLC
19 October 2021
Condor Gold plc
7/8 Innovation Place
Douglas Drive
Godalming
Surrey
GU7 1JX
19 October 2021
Condor Gold Plc
("Condor", "Condor Gold" or the "Company")
Condor Provides Update on a Feasibility Study for the La India
Project
Condor Gold (AIM: CNR; TSX: COG) is pleased to provide an update
on the status of studies underway in support of a Feasibility Study
("FS") for its fully permitted La India Project, Nicaragua. The FS
is being conducted on La India Open Pit and associated mine site
infrastructure. The FS Studies currently underway will bring the
level of confidence for the Project to the industry standard of
engineering design, in order to support +/- 15% capital and
operating cost estimates. Work is well underway with supporting
field and testing studies nearing completion for the final mine
design to commence in November 2021, with publication of the FS in
the 1(st) quarter of 2022.
Highlights: Feasibility Studies Progress
-- Processing plant design incorporating the 2,300tpd SAG Mill
purchased by Condor, has been 100% completed. Associated
infrastructure designs and costs are under development.
-- A surface water hydrological model has been 100% completed,
which feeds into the Site Wide Water Balance, with the supporting
documentation due by the end of October. Detailed water management
structure designs are underway.
-- Tailings Storage Facility ("TSF") design has been 100%
completed, the draft report was delivered to Condor during the
first week in October. The report is under review by Condor, with
the material take-offs for construction passed to Hanlon
Engineering for cost estimation.
-- The stormwater attenuation structure at La Simona is under
design and is 90% completed. As with the TSF, the material
take-offs will be passed to Hanlon to estimate the construction
costs.
-- Metallurgical Studies - Analytical work is 95+% completed. A
draft report is due by the end of October.
-- Mineral Resource Estimate update. All assays from the infill
drilling program have been received. Updates to the geological
framework inclusive of the lithological, structural and weathering
model are approximately 80% complete. Once completed the Mineral
Resource estimate update for La India will commence.
-- Pit Geotechnical - a review of the initial round of 1700 m of
geotechnical drilling by SRK indicated that an additional 690m of
oriented core drilling, followed by televiewer logging, will be
required to meet FS level confidence. Completion of the drilling
and logging is expected by mid November, with televiewer inspection
to be conducted upon completion of each hole.
-- Hydrogeology / pit water management - Condor successfully
intercepted the deepest level of the 1950s-era underground mine
workings in hole LIDC 178, providing confidence that said workings
are suitable to tap in to, in order to draw down ground water
levels and support depressurization of the pit slopes. A test
borehole close to the historical mineshaft will be drilled in
November to one of the options for the location of the long-term
pumping station.
Mark Child, Chairman and CEO commented:
"I am pleased to provide an update on the development of a
Feasibility Study in line with International best practices for the
La India Open Pit and associated mineral processing and mine site
infrastructure. Several key studies have been completed or are near
completion. There are no negative surprises and the Project
continues to be materially de-risked, nearing a shovel ready
status. A Feasibility Study increases the confidence of the
Project, incorporating a Feasibility Level engineering design, and
+/- 15% capital and operating costs. This in turn will facilitate
Project financing ahead of Project construction. Condor staff and
our contractors at Hanlon Engineering, Tierra Group International,
SGS Lakefield Laboratories and SRK Consulting (UK and USA) have
been diligently pursuing the supporting work for the study for over
a year and are making substantial headway in completion of that
work, despite the challenges of logistics, market conditions, and
of course, the impact of Covid on the ability to travel".
Background
With the acquisition of the complete new SAG Mill package from
First Majestic Silver (RNS Dated March 15, 2021), Condor initiated
a series of studies intended to demonstrate feasibility-level
engineering and economics for the flagship La India Open Pit. This
effort included updates of the Pre-Feasibility Study ("PFS")-Level
studies conducted in 2014, along with interim studies conducted
over the course of permitting and planning efforts, along with
in-fill drilling targeting initial production from the La India
Open Pit.
The FS Studies currently underway will bring the level of
confidence for the Project to the industry standard of +/- 15% on
operating costs, capital costs. The studies will cover the complete
spectrum of supporting documentation, including:
-- Feasibility level design of the processing plant and
associated infrastructure. 100% completed.
-- Hydrology: Detailed development of the surface water
management requirements via a site-wide water balance and
corresponding design of the facilities to manage surface water.
100% completed.
-- Feasibility level design of the tailings storage facility. 100% completed.
-- The stormwater attenuation structure at La Simona is under
design and is 90% completed. As with the TSF, the material
take-offs will be passed to Hanlon to estimate the construction
costs
-- Additional metallurgical testing of the La India ore to
confirm recovery, rock crushing and grinding characteristics and
reagent consumption. 95% completed.
-- Mineral Resource Model: Updated geological interpretation and
Resource model - combining the recent in-fill drilling on La India
Open Pit with the updated interpretation. 80% completed.
-- Pit Geotechnical: More detailed analysis of the slope design
parameters supported by additional geotechnical drilling
-- Hydrogeological Modelling: Comprehensive characterization of
the groundwater required for pit dewatering
-- Geochemical analysis to confirm that the majority of waste
rock is non acid forming with low sulphide sulphur contents
-- Updated mine plans with consideration of the above findings
-- Updated cost estimates for contract mining, plant consumables, fuel, staffing and labour
-- Review of Social and Environmental management practices and corresponding costs
-- Closure costs
-- Development of a comprehensive technical / economic model
Plant Design
Hanlon Engineering has now completed design of the processing
plant and, along with Condor staff assistance, is engaged in
sourcing cost estimates for construction and operating consumables
from local vendors (where applicable).
Hanlon has also been awarded the design and costing of the
infrastructure elements of the Project. General arrangement
drawings of the plant and buildings were reviewed the week of
October 8. Other than minor adjustments to the arrangement of the
central office, these drawings will be sent out for FS-level cost
estimates to local vendors by mid October.
Hydrological Model and Surface Water Management
The La India Project is subject to short and intense rain events
during the local rainy season, necessitating a robust understanding
of the surface water hydrology. Condor commissioned a study of the
site wide water balance (SWWB) in November 2020 by SRK (UK) to
provide the design parameters for the surface water management
system, integrating the various elements from the Tailing Storage
Facility (TSF) and plant design with the haul road (between the pit
and processing plant) and sound berm surrounding the nearby
village. The SWWB analysis has now been completed with the report
due before the end of October 2021.
Design work for the various structures comprising the surface
water management system is currently underway, where Tierra Group
are providing the designs for critical structures, and other less
material components will be awarded to local Nicaraguan design
firms.
Tailing Storage Facility
The design of the TSF is now complete with the draft report
under Condor review. The report package consists of the
geotechnical characteristics of the foundation area for the dam,
assessment of the seismic hazard potential, FS level construction
drawings, and summary reports. This report will be submitted to the
Government of Nicaragua following completion of the overall FS.
Tierra Group is also responsible for the design of the La Simona
attenuation structure upstream of the open pit (which is 90%
completed), and the sound berm between the village of La India and
the open pit operations (80% completed).
Metallurgical Testing
The 2014 PFS included a robust metallurgical testing regime with
results supporting a 91% commercial-scale recovery on the hard and
abrasive La India ores. A follow up series of tests was conducted
in 2019 produced comparable results.
Additional variability and recovery tests were conducted in
support of the FS study with results again comparable to previous
expectations. The recent analyses by SGS Lakefield indicated that a
40 hour retention time in the leach circuit is advisable and has
also demonstrated the potential for lower reagent consumption,
retaining the 75 micron size recommended in the PFS. These
recommendations have been incorporated into the Hanlon Plant design
and will be included in the estimated processing costs. The final
few lab results are expected the week of October 18(th) with the
full draft report delivered by the end of October.
Geological Interpretation and Resource Model Update
The current understanding of the La India deposit geology is not
materially different than that underlying the 2014 PFS and the
January 2019 Mineral Resource update. The recent addition of 3,370
meters of infill drilling within La India open pit in an area that
comprises the initial years' feed to the mill is expected to
improve the confidence in the model associated to this period. SRK
are currently in the process of updating the geological
interpretation/framework for the La India deposit inclusive of the
lithological, structural and weathering model as a result of the
infill drilling program, which is approximately 80% complete. Once
completed the Mineral Resource estimate update for La India will
commence inclusive of the results from the infill drill
programme.
Pit Geotechnical / Slope Stability
The studies to confirm and refine the slope design parameters
applied in 2014 were initially slated for 1700 meters of oriented
core drilling with support by optical or acoustic televiewer scans
of the holes following the completion of drilling. Review by SRK
indicated that an additional 690 meters of additional core drilling
would be required to provide inputs on pit-wall locations with poor
data recovery. This additional drilling commenced on October 4 and
will be supplemented with a second drill rig added to the programme
during the week of October 18 in order to expedite the process.
Drilling, logging and televiewer scans will be completed by
mid-November, pending equipment availability. Condor anticipates
that the revised slope parameters will be delivered concurrently
with the delivery of the updated resource model.
Hydrogeological Model
One of the requirements of the pit slope design parameters is
the assumption of a dewatered / depressurized rock mass. Condor
initially tested the feasibility of this assumption in a pump test
conducted as part of the PFS in 2014. The current efforts to
support the dewatering programme for the mining operation are
designed to provide locations for dewatering infrastructure that
minimize the potential impacts on mine operations, along with
sufficient detail to estimate costs associated with the dewatering
program.
Condor successfully reconditioned an existing exploration hole
to serve as a piezometer and test bed to demonstrate connection
with the historical Level 8 workings from the 1950's era mining.
This process led to a successful test of the connection, indicating
that the existing workings can potentially serve as a dewatering
collection system. Condor is assessing several options for a
dewatering pump station, which include a pump station adjacent to
the old mine shaft, or potentially intercepting/accessing of the
old San Lucas drainage tunnel.
Waste Geochemistry
Previous analyses from the PFS in 2014 indicated that the waste
rock produced by the La India Open Pit will be non-acid forming and
is net-neutralizing, likely due to calcite in the various
lithological units. Following the recommendations of CORES
Consultants, Condor constructed a series of 5 barrels containing
the various waste rock types exposed to normal precipitation. Two
series of water samples were collected and tested locally within
Nicaragua, prior to a recent conversion to SGS Laboratories in
Lakefield, Ontario to achieve lower detection limits. As of this
writing, the results of the two series of water analyses have
indicated that only sedimentation ponds will be needed to maintain
discharge water quality, although this will be confirmed with
continued testing of water from the barrels and subsequent
predictive modelling.
SRK has requested that additional variability samples be
collected and tested with industry standard static laboratory tests
for ARDML assessment. The requested samples have been collected and
been shipped. Condor anticipates that the testing and reporting
process will require 6-8 weeks.
Waste Dump Footing Characterization
Condor has reviewed and under current assumptions indicated that
sufficient capacity for anticipated waste volumes from the open pit
can be stored in a single dump location to the west of the pit. In
order to verify these assumptions, and as part of the FS design
requirements from SRK, Condor is excavating a number of test pits
at selected locations to confirm sufficient stability under the
planned waste dump footprint. This work has already begun with
points surveyed and access roads established to the first sample
locations. Test work will consist of soils logging, shear vane
tests and percolation tests.
Mining Studies
In parallel to the recently reported PEA (see RNS 9 September
2021) Condor included preliminary designs of the La India Open Pit.
While the 2300 tpd production schedules included conformance with
the PFS design parameters, including the PFS slope stability
parameters and inclusion of ramps, as well as production of a
series of phase plans to optimise access to mineralise material,
these were also intended as preliminary production schedules to
support initial bid packages to be sent out to local mining
contractors. The final pit designs will be updated based on the
updated Mineral Resource estimate, along with any changes resulting
from the Geotech / Slope stability and hydrogeological and
hydrological studies.
- Ends -
For further information please visit www.condorgold.com or
contact:
Condor Gold plc Mark Child, Chairman and CEO
+44 (0) 20 7493 2784
Beaumont Cornish Limited Roland Cornish and James Biddle
+44 (0) 20 7628 3396
SP Angel Corporate Finance Ewan Leggat
LLP +44 (0) 20 3470 0470
H&P Advisory Limited Andrew Chubb and Nilesh Patel
+44 207 907 8500
Blytheweigh Tim Blythe and Megan Ray
+44 (0) 20 7138 3204
About Condor Gold plc:
Condor Gold plc was admitted to AIM in May 2006 and dual listed
on the TSX in January 2018. The Company is a gold exploration and
development company with a focus on Nicaragua.
In August 2018, the Company announced that the Ministry of the
Environment in Nicaragua had granted the Environmental Permit
("EP") for the development, construction and operation of a
processing plant with capacity to process up to 2,800 tonnes per
day at its wholly-owned La India gold Project ("La India Project").
The EP is considered the master permit for mining operations in
Nicaragua.
La India Project contains a Mineral Resource of 9,850 Kt at 3.6
g/t gold for 1.14 M oz gold in the Indicated category and 8,479 Kt
at 4.3 g/t gold for 1.18 M oz gold in the Inferred category. A gold
price of $1,500/oz and a cut-off grade of 0.5 g/t and 2.0 g/t gold
were assumed for open pit and underground resources, respectively.
A cut-off grade of 1.5 g/t gold was furthermore applied within a
part of the Inferred Resource. Mineral Resources are not Mineral
Reserves and do not have demonstrated economic viability. There is
no certainty that any part of the Mineral Resources will be
converted to Mineral Reserves.
Environmental Permits were granted in April and May 2020 for the
Mestiza and America open pits respectively, both located close to
La India. The Mestiza open pit hosts 92 Kt at a grade of 12.1 g/t
gold (36,000 oz contained gold) in the Indicated Mineral Resource
category and 341 Kt at a grade of 7.7 g/t gold (85,000 oz contained
gold) in the Inferred Mineral Resource category . The America open
pit hosts 114 Kt at a grade of 8.1 g/t gold (30,000 oz) in the
Indicated Mineral Resource category and 677 Kt at a grade of 3.1
g/t gold (67,000 oz) in the Inferred Mineral Resource category.
Following the permitting of the Mestiza and America open pits,
together with the La India Open Pit Condor has 1.12 M oz gold open
pit Mineral Resources permitted for extraction.
Reporting Standards
The reporting standard adopted for the reporting of the Mineral
Resource Estimate ("MRE") uses the terminology, definitions and
guidelines given in the Canadian Institute of Mining, Metallurgy
and Petroleum ("CIM") Standards on Mineral Resources and Mineral
Reserves (May 2014) as required by NI 43-101 ("The CIM Code"). The
CIM Code is an internationally recognised reporting code as defined
by the Combined Reserves International Reporting Standards
Committee.
The 2021 PEA Technical Report will be issued within 45 days of
the public disclosure in accordance with the public disclosure to
NI 43-101 standards.
Disclaimer
Neither the contents of the Company's website nor the contents
of any website accessible from hyperlinks on the Company's website
(or any other website) is incorporated into, or forms part of, this
announcement.
Qualified Persons
The Mineral Resource Estimate has been completed by Ben Parsons,
a Principal Consultant (Resource Geology) with SRK Consulting
(U.S.) Inc, who is a Member of the Australian Institute of Mining
and Metallurgy, MAusIMM(CP). He has some nineteen years' experience
in the exploration, definition and mining of precious and base
metals. Ben Parsons is a full-time employee of SRK Consulting
(U.S.), Inc, an independent consultancy, and has sufficient
experience which is relevant to the style of mineralisation and
type of deposit under consideration, and to the type of activity
which he is undertaking to qualify as a "qualified person" as
defined under National Instrument 43-101 - Standards of Disclosure
for Mineral Projects ("NI 43-101") of the Canadian Securities
Administrators and as required by the June 2009 Edition of the AIM
Note for Mining and Oil & Gas Companies. Ben Parsons consents
to the inclusion in the announcement of the matters based on their
information in the form and context in which it appears and
confirms that this information is accurate and not false or
misleading.
The Qualified Persons responsible for the Technical Report are
Dr Tim Lucks of SRK Consulting (UK) Limited, and Mr Fernando
Rodrigues, Mr Stephen Taylor and Mr Ben Parsons of SRK Consulting
(U.S.) Inc. Mr Parsons assumes responsibility for the MRE, Mr
Rodrigues the open pit mining aspects, Mr Taylor the underground
mining aspects and Dr Lucks for the oversight of the remaining
technical disciplines and compilation of the report.
The technical and scientific information in this press release
has been reviewed, verified and approved by Gerald D. Crawford,
P.E., who is a "qualified person" as defined by NI 43-101 and is
the Chief Technical Officer of Condor Gold plc.
The technical and scientific information in this press release
has been reviewed, verified and approved by Andrew Cheatle, P.Geo.,
who is a "qualified person" as defined by NI 43-101.
Forward Looking Statements
All statements in this press release, other than statements of
historical fact, are 'forward-looking information' with respect to
the Company within the meaning of applicable securities laws,
including statements with respect to: the ongoing mining dilution
and pit optimisation studies, and the incorporation of same into
any mining production schedule, future development and production
plans at La India Project. Forward-looking information is often,
but not always, identified by the use of words such as: "seek",
"anticipate", "plan", "continue", "strategies", "estimate",
"expect", "Project", "predict", "potential", "targeting",
"intends", "believe", "potential", "could", "might", "will" and
similar expressions. Forward-looking information is not a guarantee
of future performance and is based upon a number of estimates and
assumptions of management at the date the statements are made
including, among others, assumptions regarding: future commodity
prices and royalty regimes; availability of skilled labour; timing
and amount of capital expenditures; future currency exchange and
interest rates; the impact of increasing competition; general
conditions in economic and financial markets; availability of
drilling and related equipment; effects of regulation by
governmental agencies; the receipt of required permits; royalty
rates; future tax rates; future operating costs; availability of
future sources of funding; ability to obtain financing and
assumptions underlying estimates related to adjusted funds from
operations. Many assumptions are based on factors and events that
are not within the control of the Company and there is no assurance
they will prove to be correct.
Such forward-looking information involves known and unknown
risks, which may cause the actual results to be materially
different from any future results expressed or implied by such
forward-looking information, including, risks related to: mineral
exploration, development and operating risks; estimation of
mineralisation and resources; environmental, health and safety
regulations of the resource industry; competitive conditions;
operational risks; liquidity and financing risks; funding risk;
exploration costs; uninsurable risks; conflicts of interest; risks
of operating in Nicaragua; government policy changes; ownership
risks; permitting and licencing risks; artisanal miners and
community relations; difficulty in enforcement of judgments; market
conditions; stress in the global economy; current global financial
condition; exchange rate and currency risks; commodity prices;
reliance on key personnel; dilution risk; payment of dividends; as
well as those factors discussed under the heading "Risk Factors" in
the Company's annual information form for the fiscal year ended
December 31, 2020 dated March 31, 2021 and available under the
Company's SEDAR profile at www.sedar.com .
Although the Company has attempted to identify important factors
that could cause actual actions, events or results to differ
materially from those described in forward-looking information,
there may be other factors that cause actions, events or results
not to be as anticipated, estimated or intended. There can be no
assurance that such information will prove to be accurate as actual
results and future events could differ materially from those
anticipated in such statements. The Company disclaims any intention
or obligation to update or revise any forward-looking information,
whether as a result of new information, future events or otherwise
unless required by law.
Technical Glossary
Assay The laboratory test conducted to determine the proportion
of a mineral within a rock or other material. Usually
reported as parts per million which is equivalent
to grams of the mineral (i.e., gold) per tonne of
rock
ARDML Acid rock drainage and metal leaching
--------------------------------------------------------------
Au Gold
--------------------------------------------------------------
Grade The proportion of a mineral within a rock or other
material. For gold mineralisation this is usually
reported as grams of gold per tonne of rock (g/t)
--------------------------------------------------------------
g/t grams per tonne
--------------------------------------------------------------
Indicated Mineral That part of a Mineral Resource for which tonnage,
Resource densities, shape, physical characteristics, grade
and mineral content can be estimated with a reasonable
level of confidence. It is based on exploration, sampling
and testing information gathered through appropriate
techniques from locations such as outcrops, trenches,
pits, workings and drill holes. The locations are
too widely or inappropriately spaced to confirm geological
and/or grade continuity but are spaced closely enough
for continuity to be assumed.
--------------------------------------------------------------
Inferred Mineral That part of a Mineral Resource for which tonnage,
Resource grade and mineral content can be estimated with a
low level of confidence. It is inferred from geological
evidence and assumed but not verified geological and/or
grade continuity. It is based on information gathered
through appropriate techniques from locations such
as outcrops, trenches, pits, workings and drill holes
that may be limited, or of uncertain quality and reliability,
--------------------------------------------------------------
IRR The Internal Rate of Return (IRR) is the discount
rate that makes the net present value (NPV) of a project
zero. In other words, it is the expected compound
annual rate of return that will be earned on a project
or investment
--------------------------------------------------------------
Kt Thousand tonnes
--------------------------------------------------------------
Mineral Resource A concentration or occurrence of material of economic
Estimate interest in or on the Earth's crust in such a form,
quality, and quantity that there are reasonable and
realistic prospects for eventual economic extraction.
The location, quantity, grade, continuity and other
geological characteristics of a Mineral Resource are
known, estimated from specific geological knowledge,
or interpreted from a well constrained and portrayed
geological model.
--------------------------------------------------------------
NI 43-101 Canadian National Instrument 43-101 a common standard
for reporting of identified mineral resources and
ore reserves
--------------------------------------------------------------
NPV Net Present Value (NPV) is the value of all future
cash flows (positive and negative) over the entire
life of an investment discounted to the present. NPV
analysis is a form of intrinsic valuation and is used
extensively across finance and accounting for determining
the value of a business, investment security, capital
project, new venture, cost reduction program, and
anything that involves cash flow. It is after deducting
the upfront capital cost
--------------------------------------------------------------
Open pit mining A method of extracting minerals from the earth by
excavating downwards from the surface such that the
ore is extracted in the open air (as opposed to underground
mining).
--------------------------------------------------------------
Vein A sheet-like body of crystallised minerals within
a rock, generally forming in a discontinuity or crack
between two rock masses. Economic concentrations of
gold are often contained within vein minerals.
--------------------------------------------------------------
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END
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