Condor Gold plc has outlined two mining scenarios following SRK Consulting’s preliminary economic assessment (PEA) on its 100% owned La India gold project in Nicaragua.
SCENARIOS
Scenario A involves mining from four open pits, termed La India, America, Mestiza and Central Breccia Zone (CBZ), which targets a plant feed rate of 1.225 million tonnes per annum (Mtpa) over nine years with total gold production of 862,000oz.
Scenario B comprises the open pits and three underground operations at La India, America and Mestiza, in which the processing rate is increased to 1.4 Mtpa.
This would have an average annual production of 150,000 oz of gold over the initial nine years of production, and 1,469,000 oz of gold produced over the 12-year life of the mine.
Condor said that both scenarios would return positive NPVs at the company’s base discount rate of 5%.
This would be $236m for scenario A and $313m for scenario B at a gold price of $1,550/oz.
Both cases offer a payback period of 12 months.
CASH FLOW
“I am delighted to announce robust economics for two mining scenarios in an updated technical study on Condor’s 100% owned La India project,” said chairman and chief executive Mark Child.
“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 nine 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 two years from open pit material and underground mining funded out of cash flow.”