Interim Report and Accounts for the Three and Six Months Ended 30 June 2021
Condor Gold plc (“Condor Gold”, “Condor”, the “Group” or the “Company”), (AIM: CNR; TSX: COG) presents its unaudited interim financial report together with Management’s Discussion and Analysis for the three- and six-month periods to 30 June 2021. Both of the above have been posted on the Company’s website www.condorgold.com and are also available on SEDAR at www.sedar.com.
Highlights for the three and six months ended 30 June 2021
· Mobilisation in January of a second diamond drill rig for the then on-going 3,300 m infill drilling campaign at La India Starter Pits was announced by the Company. The drilling is on 25m by 25m 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 £4,000,000 before expenses. The Placing was arranged directly by the Company with institutional and other investors.
· In February, the Company commenced drilling of a 5,000m exploration program 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 3,000m. Cacao, located only 4km from the planned and permitted processing plant at La India, already hosts an Inferred Mineral Resource of 662 Kt at 2.8 g/t gold for 60,000 oz gold as defined by Condor from 2,890m drilling in 2019. It 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 widest 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 1,296m on the La India Starter Pit infill drilling programme were announced in March. The primary objective of the drilling programme is to provide 25m spaced drill sampling within the two shallow (up to 35m deep), high-grade Starter Pits within the main La India Open Pit Mineral Reserve. Results included LIDC404, which drilled 9.6m true width at 3.98 g/t gold from surface (announcement of 9 March, 2021 refers).
· On 15 March the Company agreed to purchase a complete new Semi Autogenous Mill (“SAG Mill”) package from First Majestic Silver Corp (“First Majestic”) (TSX:FR). The purchase consideration is approximately US$6.5 million, including US$3.0 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 2,300 tonnes per day (“tpd”) or 0.8 million tonnes per annum (“tpa”) 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 Marchfurther drill results from the on-going diamond drill programme at La India Starter Pits were reported. LIDC406 of 17.90 m (17.4m true width) at 3.27 g/t gold from 24.55m drill depth, including 2.1m @ 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. See announcement of 30 March for further details.
· On 29 April Condor announced 44 drill holes for a combined 2,290m of infill and RC replacement drilling completed within La India Starter Pits. A drill intersect in LIDC413 of 22.05m (21.6m true width) at 6.48 g/t gold including 15 m true width at 8.68 g/t gold from 24.75m drill depth in a starter pit is exceptional in terms of width and grade near surface. The drill intercept in LIDC416 of 16.00m (15.7m true width) at 5.30 g/t gold from 18.35m drill depth including 5.8m true width at 12.35 g/t is also very impressive. See announcement of 29 April for further details.
· Hannam and Partners were appointed as Joint Broker to the Company in June.
· Commencement of a 8,500 metre infill diamond drilling programme within the permitted La Mestiza Open Pit Mineral Resource was announced on 10 June. The programme is anticipated to take a further 4 months to complete. Details regarding the updated preliminary mine schedules on La Mestiza Open Pits, based on the existing Mineral Resource and in support of the 8,500 metre drilling programme were also provided.
· In line with it’s intent to develop La India Mine into a production unit, on June 15 the Company announced that had commenced a 1,700 metre infill geotechnical drilling programme within the permitted La India Open Pit. Two diamond drill rigs were deployed to expedite progress, with the programme is anticipated to take 5-6 weeks to complete. The programme has been designed by SRK Consulting (UK) Limited to achieve a Feasibility Study (“FS”) level of design and will complement other ongoing FS level work programmes already underway.
· Hanlon Engineering & Associates of Tucson, Arizona (“Hanlon”) was selected in June as the Lead Engineer to develop a FS level of design for a new processing plant around the Company’s recently acquired new SAG Mill. Hanlon will be responsible for the engineering designs, the capital cost and operating costs of the processing plant to a FS level of design.
· A significant drill intercept of 25.93m (14.9m true width) at 3.94 g/t gold from 263.82m, including 4.58m (2.6m true width) at 7.76g/t gold from 282.12m drill depth in drill hole CCDC033 at the Cacao Prospect. This is the best drilling intercept returned to-date from the Cacao Prospect (“Cacao”). This assay result supports the geological model that Cacao is a fully preserved, deep-seated epithermal gold mineralisation system, with the potential to host a significant gold deposit. Cacao is located approximately 4km from the planned processing plant at Condor’s fully permitted La India gold mine and is being assessed as a potential satellite deposit. See announcement of 28 June for further details.
Post Period Highlights
· The Company received final assay results from the diamond drill programme at the Southern Starter Pit at La India and comprising forty five holes for 2345.95 m in and just beneath the La India Starter Pits. The two planned high-grade Starter Pits (up to 35 m deep), the Northern and Southern Starter Pits, have now been drill tested at 25 m by 25 m spacing. These results will be used to estimate an updated mineral resource and reserve. In summary, the infill drilling programme confirmed that the La India Starter Pits, which sit within the fully permitted La India Open Pit Mineral Reserve Estimate of 6.9Mt at 3.1 g/t gold for 675,000 oz gold, contain approximately 447Kt at 4.17 g/t gold for 59,672 oz contained gold within 35m of surface will be targeted early for extraction. The drill assay results further derisk the project ahead of production. See announcement of 5 July for further details.
· An assay result of 60.60 m (54.5 m true width) at 1.98 g/t gold from 4.15 m drill depth, including 5.75 m (5.2 m true width) at 16.88 g/t gold from 42.55 m drill depth in drill hole LIDC452 located between the two proposed starter pits and a further eleven diamond core drill holes located between and along strike of the planned high-grade La India Starter Pits were announced on 21 July. The wide zone of gold mineralization near surface has the potential to reduce the strip ratio in this area due to the increase in gold mineralized tonnage verse waste rock, thus improving Project economics. These results will be incorporated into a revised FS-level mine plan and are expected to have a positive impact on project economics.
Mark Child, Chairman and Chief Executive of Condor Gold, commented:
“Condor made significant advances during the 6 month period at the fully permitted La India Project. A state of the art new SAG Mill has been purchased, with capacity of between 2,300 tpd to 2,800 tpd capable of producing circa 100,000 oz gold per annum, the first shipments have already arrived in Nicaragua. A lead engineering firm has been appointed to produce FS-level designs for a new processing plant using the new SAG mill. Upfront capital costs and operating costs are currently being updated accordingly. The Project has been significantly de-risked by the purchase of 97% of the land and significant progress has been made with several engineering studies to an FS level. The completion during the quarter of a further 1,242 metres (3,370 metres in total) of a 25m x 25m infill drilling within the high grade La India Starter Pits has returned some excellent drill results, notably 21.6m true width at 6.48 g/t gold including 15m true width at 8.68 g/t gold from 24.75 m drill depth and confirmed the geological model. The exploration drilling on Cacao has demonstrated a wide structure, 14.9m true width at 3.94 g/t gold. The Company has completed circa 4,100 metres of a 8,500 metres infill drilling programme on the high grade Mestiza open pit. The Company is on track with its strategic objective of constructing and operating a processing plant producing circa 100,000 oz gold per annum, then materially expanding the production capacity and demonstrating a 5M oz Gold District.”
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