SURREY, BC - Condor Gold (AIM:CNR; TSX:COG) is pleased to announce the results and details of a Feasibility Study, sometimes referred to as a Bankable Feasibility Study ('2022 FS') on the La India open pit. The 2022 FS supports a Probable Mineral Reserve of 7.3Mt at 2.56g/t gold for 602,000 oz gold and a mine with an Internal Rate of Return ('IRR') of 23% and a post tax and post upfront capital cost net present value ('NPV') of US$86.9 million using a discount rate of 5% and price of US$1,600/oz gold. The 2022 FS brings the level of confidence for the Project to the industry standard of engineering design, sufficient to support +/- 15% capital and operating cost estimates.
The economic analysis in the 2022 FS (including IRR and NPV estimates) is based on the La India open pit only and does 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 believes there is high degree of certainty that additional open pit and underground Mineral Resources can be converted to Mineral Reserves and added to the mine plan through further studies.
Highlights: Feasibility Study La India Open Pit only
The 2022 FS demonstrates a robust and economically viable base case for the La India open pit:
Probable Mineral Reserve of 7.3Mt at 2.56g/t gold for 602,000 oz gold
Production averages 81,545 oz gold per annum for the first 6 years of an 8.4 year mine life
An Internal Rate of Return ('IRR') of 23% and a post tax, post upfront capital cost NPV of US$86.9 million using a discount rate of 5% and price of US$1,600 oz gold (Mineral Reserve Case).
An Internal Rate of Return ('IRR') of 43% and a post tax, post upfront capital cost NPV of US$205.2 million using a discount rate of 5% and price of US$2,000 oz gold.
Low initial capital requirement of US$105.5 million (including contingency and EPCM contract)
Low average Life of Mine All-in Sustaining cash costs US$1,039 per oz gold
Mark Child, Chairman and CEO commented:
'The Company's strategy has been to develop the fully permitted La India Project in 2 stages using the new SAG Mill that has already been purchased. The delivery of a Feasibility Study on La India open pit with an average of 81,524 oz gold per annum for the initial 6 years for a relatively low total upfront capital cost of US$106 Million is a landmark and further de-risks the Project. At US$1,600 oz gold, the La India open pit Mineral Reserve produces total revenues of US$888 Million, the total operating costs of mining, process and G&A are US$480M, leading to an operating profit of US$408 Million or a 46% operating margin. After government and other royalties, but before sustaining capital, the operating profit is US$355M, which in Condor's opinion is ample to repay any project debt on the relatively low upfront capex. At US$2,000 oz gold after paying royalties, but before sustaining capital the operating profit is US$563 Million. 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 oz gold p.a..
The plan is to materially expand production with a stage 2 expansion by converting existing Mineral Resources into Mineral Reserves and an associated integrated mine plan. On 25 October 2021, the Company announced the results of a Preliminary Economic Assessment and filed on SEDAR a technical report entitled 'Condor Gold Technical Report on the La Indian Gold Project, Nicaragua, 2021' detailing average annual production of 150,000 oz of gold over the initial 9 years of production from open pit and underground Mineral Resources and provides an indication of a production target. Outside the main La India open pit Mineral Reserve, there are additional open pit Mineral Resources on four deposits (America, Mestiza, Central breccia and Cacao) which represent an aggregate 206 Kt at 9.9 g/t gold for 66,000 oz in the indicated Mineral Resource category and 2.1Mt at 3.3 g/t gold for 223,000 oz gold in the inferred Mineral Resource category. In addition, there is an aggregate underground Mineral Resource (La India, America, Mestiza, Central Breccia San Lucas, Cristalito-Tatescame, and Cacao) of 979Kt a 6.2 g/t for 194,000 oz gold in the indicated Mineral Resource category and 5.6Mt at 5.0 g/t gold for 898,000 oz gold in the inferred Mineral Resource category.'
Background and Reporting Standards
The 2022 FS has been coordinated and compiled by SRK Consulting (UK) Ltd ('SRK') and represents the next stage in development of the La India Project following publication of the 2021 PEA Technical Report on 9 September 2021. SRK also took responsibility for the following: Mineral Reserves and financial modelling, geology and Mineral Resources, open pit geotechnics, hydrology and hydrogeology, mining and waste dump schedules, metallurgical testing, geochemistry and acid rock drainage metal leaching ('ARDML') and SRK has reviewed the environment and social management approach. Hanlon Engineering and Associates Incorporated ('Hanlon') completed, and take responsibility for, the plant processing design of a 886ktpa (2,530 tpd) single stage SAG comminution and conventional carbon in pulp ('CIP') circuit and the associated project infrastructure; and Tierra Group International Limited ('Tierra Group') completed, and take responsibility for, the tailings waste management design and the La Simona water attenuation structure.
The reporting standard adopted for the reporting of the Mineral Resource Estimate and Mineral Reserve Estimate is the Canadian Institute of Mining, Metallurgy and Petroleum ('CIM') Standards on Mineral Resources and Mineral Reserves (May 2014) (the 'CIM Code') as required by NI 43-101'). The CIM Code is an internationally recognised reporting code which is aligned with the Combined Reserves International Reporting Standards Committee ('CRIRSCO').
The Qualified Persons ('QPs') responsible for this study and the reported Mineral Reserves are:
On behalf of SRK: Dr Tim Lucks of SRK Consulting (UK) Limited, Mr Fernando Rodrigues and Mr Ben Parsons of SRK Consulting (U.S.) Inc., Mr Parsons assumes responsibility for the Mineral Resource Estimate, Mr Fernando Rodrigues for the Mineral Reserve estimate and the open pit mining study and production schedule, and Dr Lucks for the oversight of the remaining SRK technical disciplines.
On behalf of Hanlon: Mike Rockandel for the Process design and Project Infrastructure
On Behalf of Tierra Group: Justin Knudsen P.E. for the tailings waste management and La Simona water attenuation structure design.
In line with the CIM Code, a NI 43-101 compliant Technical Report summarising the results of the 2022 FS will replace the previously reported Preliminary Economic Assessment ('PEA') as presented in the Technical Report filed on SEDAR in October 2021. The 2022 FS Technical Report will be issued within 45 days of this announcement.
Mining and Mineral Reserves
Condor Gold is pleased that the 2022 FS supports an updated Mineral Reserve estimate for the La India open pit of 7.3Mt at 2.56g/t gold for 602,000 oz gold. The 2022 FS assumes a single open pit mining operation extracting ore at a nominal rate of 1.3 Mtpa (during the 5 years after pre-stripping and before ramp-down) with an operating life of 8.4 years and mill processing at a nominal rate of 0.89 Mtpa. The mine schedule produces a total of 7.3 Mt of ore grading 2.56 g/t Au with an associated 96.7 Mt of waste. A stockpiling strategy is employed to provide higher grade ores in the initial years of operation. The average life of mine ('LOM') stripping ratio is 13.2:1 (t:t) over a mine schedule of 7 years including 1 year of pre-stripping 5.1 Mt. After operating Year 6, mining from the pit will cease but mill production will continue into Year 9 as the lower grade material from the stockpile is processed. The La India open pit is located to the northwest of the village of La India and excludes the requirement for the relocation of the village. The pit at full extent maintains a 100m standoff from the nearest structures, and is separated by a 5m high berm to minimise the sound, dust, and visual impact of the mine.
The pit optimisations supporting the 2022 FS were undertaken at a US$1,600/oz gold price and assuming an average metallurgical gold recovery of 91.0%. A steady state mining rate is planned after the initial period of waste and pre-stripping at an annualised mill feed rate of 886ktpa. Mine plans include 4.86 Mt of pre-stripping of waste material in the 12 months preceding commercial production. The waste rock extracted from the pit will initially be placed in an external dump to the north of the pit and then directly to the west. During the final phases of mining, waste will be placed within the northern extents of the pits as backfill.
The 2022 FS assumes that all earth moving activities and mining operations will be conducted on a contract mining basis using a conventional truck and excavator method. The Company has obtained a detailed offer from an established contract mining/construction group for loading and hauling which currently has aggregate mining operations in El Salvador, Costa Rica, and Panama. The quote was made following a site visit to the La India project by the contracting party's representatives and is based on their own experience of operating mines. Drilling and blasting activities are managed by a separate contractor that provides the same services to other nearby mines, and is supported by written quotes based on their experiences and a site visit.
The Probable Mineral Reserves are based on Indicated Mineral Resources that have been assessed to be technically and economically viable through the 2022 FS. All Probable Mineral Reserves are located within 250 m of surface and are extractable by open pit mining methods and reported above a cut-off grade of 0.6 g/t.
Contact:
Condor Gold plc
Mark Child
Chairman and CEO
T: +44 (0) 20 7493 2784
Beaumont Cornish Limited
Roland Cornish and James Biddle
T: +44 (0) 20 7628 3396
SP Angel Corporate Finance LLP
Ewan Leggat
T: +44 (0) 20 3470 0470
H&P Advisory Limited
Andrew Chubb and Nilesh Patel
T: +44 207 907 8500
BlytheRay
Tim Blythe and Megan Ray
T: +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 line with the CIM Code, a NI 43-101 compliant Technical Report summarising the results of the 2022 FS will replace the previously reported Preliminary Economic Assessment ('PEA') as presented in the Technical Report filed on SEDAR in October 2021. The 2022 FS Technical Report will be issued within 45 days of this announcement.
The previous Preliminary Economic Assessment reported on the 25 October 2021 Condor considered the expanded Project inclusive of the exploitation of the Mineral Resources associated to the La India, Mestiza, America and Central Breccia deposits. The 2021 PEA presented a post-tax, post upfront capital expenditure NPV of US$418 million, with an IRR of 54% and 12 month pay-back period, assuming a US$1,700 per oz gold price, with average annual production of 150,000 oz gold per annum for the initial 9 years of gold production. The open pit mine schedules were optimised from designed pits, bringing higher grade gold forward resulting in average annual production of 157,000 oz gold in the first 2 years from open pit material and underground mining funded out of cashflow. The Mineral Resource estimate and associated Preliminary Economic Assessment contained in the 2021 Technical Report is considered a historical estimate within the meaning of National Instrument 43-101 - Standards of Disclosure for Mineral Projects ('NI 43-101'), and the Company is not treating the historical Mineral Resource estimate and associated studies as current, and the reader is cautioned not to rely upon this data as such. The Company believes that the historical Mineral Resource estimate and Preliminary Economic assessment is relevant to the continuing development of the La India Project.
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. Condor has purchased a new SAG Mill, which has mainly arrived in Nicaragua. Site clearance and preparation is at an advanced stage.
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.
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: future development and production plans, projected capital and operating costs, mine life and production rates, metal or mineral recovery estimates and Mineral Resource and Mineral Reserve estimates at the 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, 2021 dated March 29, 2022 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.
CONDOR GOLD PLC 
