Condor Gold charts two options for mining La India

Condor Gold (TSX: COG; LSE: CNR) has outlined two mining scenarios in an updated technical study for its flagship La India gold project in Nicaragua, both of which anticipate robust economics. 

The preliminary economic assessment prepared by SRK Consulting considers two possible routes to develop the asset.

One is to go with a mixed open pit and underground operation, which would produce a total of 1.47 million ounces of gold over its 12 year mine life, with an average of 150,000 ounces per annum during the first nine years.  

This model would require an initial US$160 million investment, with underground development funded through cash flow. 

The other scenario is for an open pit operation only, with development of the core La India pit and satellite pits at Mestiza, America and Central Breccia zones. This alternative would yield about 120,000 ounces of gold per annum over an initial period of six years, with total output of 862,000 ounces over nine years of mine life. 

“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 an average annual production of 150,000 oz. gold per annum for the initial nine years of gold production,” chairman and CEO Mark Child said in a statement. 

“The open pit mine schedules have been optimized 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 cashflow,” he noted 

Condor Gold staked concessions in Nicaragua, Central America’s largest country, in 2006.

Since then, mining has significantly taken off in the country due to the arrival of foreign companies with the cash and expertise to tap into existing reserves. 

The government of Nicaragua granted Condor in 2019 the 132.1 sq. km Los Cerritos exploration and exploitation concession, which expanded the La India project concession area by 29% to a total of 587.7 sq. kilometres. 

Condor also attracted a partner — Nicaragua Milling. The privately held company, which took a 10.4% stake in the miner in September 2020, has operated in the country for two decades.