Condor Gold plc is to buy a $6.5 million (£4.67m) complete new semi-autogenenuous mill (SAG mill) package for its La India gold project in Nicaragua.
The junior miner has avoided a 12-month wait for the design and manufacture of the equipment by buying the SAG mill from Canadian company First Majestic Silver Corp. The La India gold project will now be accelerated by a year.
The cost includes $3m payable in shares of the company with the balance of some $3.5m paid in cash over the next three to four months.
The junior gold miner said that the SAG mill and parts, representing a key item of the plant needed for production, were 90% ready to be shipped.
The SAG mill is estimated 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.
The capacity can be expanded after two to three years of production, based on the metallurgical characteristics of the ore and mineralised material at La India.
Internal technical studies and mining dilution studies conducted by SRK Consulting (UK) Ltd show that initial production is expected to be 80,000 – 100,000 oz gold per annum.
Condor added that the throughput could be increased by 22% to 2,850tpd by installing a larger motor.
Finnish grinding mills and systems manufacturer Metso Outotec initially sold the SAG Mill to First Majestic which then found it surplus to requirements and sold it to Condor.
“The key message is Condor has purchased and sized the mill at 2,300tpd, significantly shortened the mill delivery time, set a trajectory for detailed project design and an accelerated path to production,” said chairman and chief executive Mark Child.
“What’s more, Condor has acquired a state-of-the-art complete new SAG Mill package with warrantees, manufactured and supplied by Metso Outotec, the premier manufacturer of grinding mills and entire grinding systems for the global mining industry.
“I am also delighted that First Majestic Silver Corp has given a vote of confidence to Condor’s management team and endorsed a new mine at the fully permitted La India Project by accepting part payment in Condor’s shares at 50p.”