Highlights: 1.4Mtpa PEA Open Pit + Underground Operations
- Internal Rate of Return (“IRR”) of 54% and a post-tax Net Present Value (“NPV”) of US$418 million, after deducting upfront capex, at a discount rate of 5% and gold price of US$1,700/oz.
- Average annual production of ~150,000 oz of gold over the initial 9 years of production.
- 1,469,000 oz of gold produced over 12-year Life Of Mine (“LOM”).
- Initial capital requirement of US$160 million (including contingency), where the underground development is funded through cash flow.
- Pay back period 12 months.
- All-in Sustaining Costs of US$958 per oz gold over LOM.
- Robust Base Case presents an IRR of 43% and a post-tax NPV of US$312 million at a discount rate of 5% and gold price of US$1,550/oz.
- IRR of 58% and a post-tax NPV of US$302 million, at a discount rate of 5% and gold price of US$1,700/oz.
- Average annual production of ~120,000 oz of gold over the initial 6 years of production.
- 862,000 oz of gold produced over 9 year Life of Mine (“LOM”).
- Initial capital requirement of US$153 million (including contingency).
- Pay back period 12 months.
- All-in Sustaining Costs of US$813 per oz gold.
- Robust Base Case presents an IRR of 48% and a post-tax NPV of US$236 million at a discount rate of 5% and gold price of US$1,550/oz.
“I am delighted to announce robust economics for two mining scenarios in an updated technical study on Condor’s 100% owned La India Project. The highlight of the technical study is 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 have been 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 2021 PEA reflects the January 2019 Mineral Resource Estimate (as reported in the RNS dated 28 January 2019), incorporating advances in understanding and technical study detail relating to a number of areas of the Project (relative to the Pre-Feasibility Study (“PFS”) and PEA scenarios presented in the “Technical Report on the La India Gold Project, Nicaragua, December 2014”, reported in the RNS dated 21 December 2014, updates provided in final prospectus filed with the Ontario Securities Commission as announced on 27 December 2017), as well as the incorporation of the Mestiza open pit. The most significant area of advancement relates to the mining studies conducted for each of the open pits, where this has focused on producing optimised pit designs considering maximising access to mineralised material and the opportunity to maintain the grade profile through stockpiling, without requiring the relocation of the village. The other technical disciplines, namely open pit geotechnics, underground mining, hydrogeology, tailings management and infrastructure remain relatively unchanged compared to the 2014 PFS/PEA (accounting for the changes in production), with minor updates relating to mineral processing and hydrological. The environmental and social studies reflect Condor’s achievement of being granted an Environmental Permit to construct and operate a processing plant with capacity of up to 2,800 tonnes per day (“tpd”) and develop the associated mine site infrastructure for a new mine at the Project (the “Main Permit”).
Condor has open pit Mineral Resources of 8,583Kt at 3.3g/t gold for 903,000 oz gold in the Indicated category and 1,901Kt at 3.6g/t gold for 220,000 oz gold in the Inferred category permitted for extraction.
The 2021 PEA is the first Technical Report update since the 2014 PFS and PEAs. While the MRE has not changed materially during this period there have been a number of changes to the infrastructure designs and layout, which will be reflected in the 2021 PEA. These include: no resettlement of the village of La Cruz de la India, the elimination of a southern waste rock dump, the relocation of the processing plant approximately 1.2Km to the East, no requirement to relocate the main road, the purchase of the vast majority of the surface rights and obtaining the Main Permit to construct and operate a mine. Condor has developed a detailed knowledge of the hydrology, the site wide water balance and surface water management, where the water management plans have been aligned with the updated pit designs, pit development, and incorporation of the underground workings for the 2021 PEA. Furthermore, a gold price of US$1,250 oz gold was used in the 2014 PFS and PEAs verses a base case of US$1,550 oz gold in the 2021 PEA.
Thus the 2021 PEA provides an update on the current status of the Project, while acknowledging a key part of Condor’s strategy is to prove up a 5M oz Gold District at the Project.
The PEA has been conducted in parallel to the on-going field investigations being conducted by Condor inclusive of the recently completed 3,370 m resource drilling programme at the La India open pit, the resource infill drilling programme currently being conducted at the Mestiza open pit and resource expansion drilling being conducted on the Cacao deposit. Feasibility study level open pit geotechnical drilling and investigations, hydrological studies, metallurgical testwork, and tailings management and process plant design are on going relating to the permitted La India open pit.
It is Condor’s intention that the new drilling data will be incorporated in a further MRE update and that this will support the development of a Feasibility Study, along with the other on-going multi-disciplinary studies on the La India deposit.
SRK followed industry standard practices to derive the January 2019 MRE update, which remains consistent with SRK’s approach for the MREs previously completed. Table 3 presents the 2019 Mineral Resource Statement for the Project, inclusive of all veins. Different levels of geotechnical studies have been competed for the four potential open pits considered in both Scenario A and B, where these range from a detailed PFS investigation for La India, to scoping and benchmark values for Mestiza, America and Central Breccia. Scenario B considers the inclusion of underground mining at the La India, America and Mestiza deposits. To support the underground mining studies, SRK has reviewed and assessed the rock mass classification, and assessed the requirements for crown pillar design, sill pillar design and support at a PEA level. This study is based on the summarised geotechnical information from earlier studies including those referred to in the SRK 2014, 2017 NI 43-101 Technical Report, with no further drill core or logging data added subsequently.
Please find further information in the attachement.