Condor Gold Commences Drilling on Cacao Vein

RNS Number : 8097P

Condor Gold PLC

22 February 2021

 

Condor Gold plc 7/8 Innovation Place Douglas Drive Godalming Surrey GU7 1JX Tel: [phone]

22 February 2021

Condor Gold Plc

("Condor", "Condor Gold" or the "Company")

Condor Gold Commences Drilling on Cacao Vein to Demonstrate the Potential Upside of La India Project, Nicaragua

Condor Gold (AIM: CNR; TSX: COG) has commenced a 5,000 m diamond drill programme at the Cacao prospect at La India Project, Nicaragua. Cacao is located 4 km from the planned processing plant at our fully permitted La India mine. It is a potential satellite deposit to the already permitted La India, America and Mestiza open pits.

The drill programme has three main objectives: 1) to increase the Inferred Mineral Resource on the Cacao Vein. 2) to increase the strike length of the vein towards the Santa Barbara prospect, 3 km away. 3) to prove the structural geological model that Cacao represents a dilational opening between two major basement feeder zones (the La India and Andrea Corridors).

Highlights

· 5,000 m diamond drill programme commenced at the Cacao prospect at La India Project with the objective of increasing its mineral resource.

· Drilling will concentrate on demonstrating the depth of the main gold mineralisation level and extending it along strike.

· Cacao already hosts an Inferred Mineral Resource of 662 Kt at 2.8 g/t gold for 60,000 oz gold defined by Condor from 2,890 m drilling in 2019.

· Cacao 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 thickest in the district, comparable to  the main La India Vein. Mineral textures are identical to La India

· Isolated exposures of quartz veins in bedrock and colluvium suggest the Cacao structure extends for 3-4 km. Samples from active artisanal mine workings in the Rio Viejo, approximately 1.6 km along strike from Cacao returned assays of up to 11.6 g/t gold.

· A hot spring deposit (sinter) at Cacao indicates minimal erosion, with the entire epithermal system preserved. Sinter is the rock found at the top of an epithermal boiling zone.

· Higher grades at depth at Cacao. Previous drilling indicates improving gold grade at depth, suggesting the presence of a boiling-related bonanza zone.

· Mineralisation is open down-dip and along strike.

· Historic drilling by Condor demonstrated broad zones of gold mineralisation: intercepts included: 7.85 m at 3.75 g/t, 7.85 m at 2.95 g/t, and 17.1 m at 1.74 g/t gold. The principal vein shows excellent continuity.

· Underlying felsic, glassy volcanic rocks are anticipated at depth. These are a more favourable host for veining, for example at La India. The andesite/felsic contact may be especially favourable for veining and bonanza grade.

· Potential satellite mine: the prospect is only 4 km from the planned and permitted processing plant at La India.

Mark Child, Chairman and CEO commented:

"Condor has successfully permitted a new processing plant of up to 2,800 tpd, along with the associated mine site infrastructure, and is currently completing detailed engineering studies to make the project 'shovel ready'. Initial production is expected to be 120,000 oz gold p.a. from three permitted open pits. In parallel, Condor is now embarking on the exciting second part of its strategy: demonstrating the potential for a 5 Moz Gold District with the initial focus on a 5,000 m drilling programme at Cacao.

Please see http://www.condorgold.com/content/technical-videos or if you are viewing from Canada http://ca.condorgold.com/content/technical-videos . The Company considers that the significant potential of Cacao is now demonstrated via its 2,890 m of drilling, resultant Inferred Mineral Resource of 662 Kt at 2.8 g/t gold for 60,000 oz gold and subsequent geological interpretation. Cacao is open at depth and along strike in both directions. The vein width is comparable to the best intersections at La India and the hanging wall of the vein is increasingly stockworked, as at La India. Structurally controlled ore shoots, as at La India, are to be expected in this major dilational, and continuous, vein. The next phase of drilling at Cacao will test the interpretation that it is largely a concealed gold deposit. It aims to demonstrate the depth of the main gold mineralisation and extend it along strike and increase the Inferred Mineral Resource."

Geological Setting

The Cacao target is hosted by flat-lying andesites and is separated from the La India, America and Mestiza veins by the Highway Fault (Figure 1). This fault was active after vein mineralisation and dropped down rocks to the east. This explains the presence of a chalcedonic phreatic breccia and hot spring deposit (sinter) at Cacao. These typically form upon, and immediately beneath, the original ground surface. Consequently, the gold mineralised epithermal vein system at Cacao has been 'preserved' in its entirety. The vein which fed the hot spring is only present at depth. This contrasts with the veins west of the Highway Fault, including La India, where erosion directly exposes the high grade (bonanza) level of the epithermal system. This made the veins west of Highway Fault significantly easier to locate. Cacao is therefore a 'concealed' target that failed to attract the attention of both Noranda Mining, which mined at La India before 1956, and informal miners.

 

Link to Figure 1: Location of Cacao Relative to Permitted Mine Site Infrastructure

http://www.rns-pdf.londonstockexchange.com/rns/8097P_1-2021-2-21.pdf

Background; Discovery to Inferred Mineral Resource

An east-west-striking ridge of chalcedonic phreatic breccia, 10 to 50 m wide and about 600 m long, was first identified at Cacao in 2006. Rock chip and trench sampling by Condor in 2006-2007 identified some gold-bearing subvertical crustiform quartz veins up to 1 m thick within the breccia. But, unlike the significant veins at La India and America, they are discontinuous and were never exploited by informal miners.

Drilling in 2007 and 2008 demonstrated that the phreatic breccia narrows downwards and gives way to a higher grade, classic crustiform epithermal vein. This vein is identical to those mined by Noranda at La India. Identification of float boulders of hot spring sinter in 2015 motivated further drilling in 2016, to test the model of a concealed boiling level. As at La India, the drilling identified numerous mineralising 'events', with early hydrothermal breccias cut by later crustiform veins. This long-lived hydrothermal system resulted in some significant veins and intercepts of up to 7.85 m (3.9 m true thickness) at 3.75 g/t gold (CCDC023, approximately 150 m below surface).

Drilling to date (26 holes, total of 2890 m) has only tested below the ridge of chalcedonic breccia. The best intercepts are shown in Table 1.

The current programme has commenced with 1 drill rig and will continue to test deeper, but will also test the strike potential. Eastwards the mineralisation dives beneath a major alluvial fan, about 20 m thick. Deeply eroded streams in the fan show large boulders of silicified rock and sinter directly along strike; this implies the vein continues. The Cacao Vein reappears from the alluvium in the Rio Viejo, about 1.6 km east of Cacao. There, several parallel veins are exploited by informal miners. Grab samples give up to 11.6 g/t Au. The structure(s) then disappears below more alluvium, before re-emerging on Condor's Santa Barbara Concession, about 3 km east of Cacao. Float boulders at Santa Barbara show excellent epithermal vein textures; grab samples give up to 1.8 g/t Au. Nearby, in situ veins, within rhyolite, give up to 15.8 g/t Au. (Figure 2).

Table 1: Drill Results on Cacao Vein

Drill hole ID		Collar UTM WGS84-16N		Drill inclination/azimuth			From (m)	To (m)		Drill Width (m)		*True Width (m)		Au (g/t)		Ag (g/t)			Other
CCRD002		580398E 1412068N 478 m RL		-63/360			87.00	101.05		14.05		6.4		6.05		2.5			Includes 1 m @ 16.5 g/t & 1 m @ 10.75 g/t Au
CCRD004		580318E 1412087N 477 m RL		-65/360			123.35	128.90		5.55		1.9		6.10		12.2			Includes 3.6 m @ 8.57 g/t Au
CCRD006		580157E 1412086N 465 m RL		-63/360			93.12	106.95		13.83		4.3		2.25		4.3			Includes 1 m @ 8.17 g/t Au
							132.90	135.50		2.60		0.8		34.13		4.8			Includes 0.85 m @ 99.7 g/t Au
CCRD014		580320E 1411942N 457 m RL		-55/360			134.63	137.28		2.65		1.7		8.45		-			Includes 0.85 m @ 20.1 g/t Au
							144.18	148.63		4.45		2.9		1.21		-
CCDC020		580158E 1411940N 452 m RL		-61/360			154.50	159.28		4.78		3.0		1.37		-
							163.00	167.15		4.15		2.6		2.93		-
CCDC023		580318E 1411946N 457 m RL		-64/360			157.40	165.25		7.85		3.9		3.75		5.1			Includes 0.9 m @ 11.9 g/t & 0.5 m @ 12.6 g/t Au
							167.30	169.50		2.20		1.1		2.24		10.2
CCDC024		580154E 1411939N 452 m RL		-70/360			199.75	207.60		7.85		4.2		2.95		17.2			Includes 2 m @ 6.06 g/t Au
CCDC025		580370E 1411957N 458 m RL		-52/360			80.00	82.30		2.30		1.5		1.31		<2
							92.70	109.80		17.10		11.2		1.74		1.3			Includes 1.7 m @ 6.0 g/t Au

 

Link to Figure 2: Geological map with the inferred Cacao-Santa Barbara Vein.

http://www.rns-pdf.londonstockexchange.com/rns/8097P_1-2021-2-21.pdf

Mineral Resource Estimation

Resource modelling suggests that Cacao is amenable to open pit and underground mining, despite the lower grades encountered at surface. A mineral resource estimate is shown in Table 2.

Table 2: Cacao Inferred Mineral Resource, prepared in accordance with CIM and Canadian NI 43-101 (25^th January 2019; SRK Consulting (UK) Ltd).

Vein name	Cut-off	Tonnes (kt)	Gold grade (g/t)	Contained gold (koz)
El Cacao(1)	0.5 g/t (OP)	188	2.3	14
El Cacao(2)	2.0 g/t (UG)	474	3.0	46
(1) The methods applied to conducting the geological modelling and estimation have not changed from those described in the Technical Report. The Cacao pits are amenable to open pit mining and the Mineral Resource Estimates are constrained within Whittle optimised pits, which SRK based on the following parameters: A Gold price of USD1,500 per ounce of gold with no adjustments. Prices are based on experience gained from other SRK projects. Metallurgical recovery assumptions are between 91-96% for gold, based on testwork conducted to date. Marginal costs of USD19.36/t for processing, USD5.69/t G&A and USD2.35/t for mining, slope angles defined by the Company Geotechnical study which range from angle 40 - 48°, a haul cost of USD1.25/t was added to the Mestiza ore tonnes to consider transportation to the processing plant.
(2) Underground Mineral Resources beneath the open pit are reported at a cut-off grade of 2.0 g/t over a minimum width of 1.0m. Cut-off grades are based on a price of USD1,500 per ounce of gold and gold recoveries of 91 percent for resources, costs of USD19.36/t for processing, USD4.55/t G&A and USD50.0/t for mining, without considering revenues from other metals.

The Company considers that the significant potential of Cacao is now demonstrated. It is open at depth and along strike. The vein width is comparable to, or greater than, the best intersections at La India. The epithermal textures indicate boiling conditions, good for high-grade gold. And, as at La India, structurally controlled ore shoots are expected in this major dilational, and continuous, vein. The next phase of approximately 5,000 m of drilling will test the interpretation that Cacao is a major concealed gold deposit. Drilling will concentrate on demonstrating the depth of the main gold mineralisation level and extending it along strike.

- Ends -

For further information please visit www.condorgold.com or contact:

Condor Gold plc	Mark Child, Chairman and CEO [phone]
Beaumont Cornish Limited	Roland Cornish and James Biddle [phone]
SP Angel Corporate Finance LLP	Ewan Leggat [phone]
Blytheweigh	Tim Blythe and Megan Ray [phone]

About Condor Gold plc:

Condor Gold plc was admitted to AIM in May 2006 and dual listed on the TSX in January 2018. The Company is a gold exploration and development company with a focus on Nicaragua.

In August 2018, the Company announced that the Ministry of the Environment in Nicaragua had granted the Environmental Permit ("EP") for the development, construction and operation of a processing plant with capacity to process up to 2,800 tonnes per day at its wholly-owned La India gold project ("La India Project"). The EP is considered the master permit for mining operations in Nicaragua. Condor Gold published a Pre-Feasibility Study ("PFS") on the project in December 2014, summarised in the Technical Report, as defined below. The PFS details an open pit gold Mineral Reserve in the Probable category of 6.9 Mt at 3.0 g/t gold for 675,000 oz gold, producing 80,000 oz gold per annum for 7 years. La India Project contains a Mineral Resource of 9,850 Kt at 3.6 g/t gold for 1.14 Moz gold in the Indicated category and 8,479 Kt at 4.3 g/t gold for 1.18 Moz gold in the Inferred category. The Indicated Mineral Resource is inclusive of the Mineral Reserve. A gold price of $1,500/oz and a cut-off grade of 0.5 g/t and 2.0 g/t gold were assumed for open pit and underground resources, respectively. A cut-off grade of 1.5 g/t gold was furthermore applied within a part of the Inferred Resource. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. There is no certainty that any part of the Mineral Resources will be converted to Mineral Reserves.

Environmental Permits were granted in April and May 2020 for the Mestiza and America open pits respectively, both located close to La India. The Mestiza open pit hosts 92 Kt at a grade of 12.1 g/t gold (36,000 oz contained gold) in the Indicated Mineral Resource category and 341 Kt at a grade of 7.7 g/t gold (85,000 oz contained gold) in the Inferred Mineral Resource category. The America open pit hosts 114 Kt at a grade of 8.1 g/t gold (30,000 oz) in the Indicated Mineral Resource category and 677 Kt at a grade of 3.1 g/t gold (67,000 oz) in the Inferred Mineral Resource category. Following the permitting of the Mestiza and America open pits, together with the La India open pit Condor has 1.12 Moz gold open pit Mineral Resources permitted for extraction, inclusive of a Mineral Reserve of 6.9 Mt at 3.0 g/t gold for 675,000 oz gold.

Disclaimer

Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

Qualified Persons

The Mineral Resource Estimate has been completed by Ben Parsons, a Principal Consultant (Resource Geology) with SRK Consulting (U.S.), Inc, who is a Member of the Australian Institute of Mining and Metallurgy, MAusIMM(CP). He has some nineteen years' experience in the exploration, definition and mining of precious and base metals. Ben Parsons is a full-time employee of SRK Consulting (U.S.), Inc, an independent consultancy, and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration, and to the type of activity which he is undertaking to qualify as a "qualified person" as defined under National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101") of the Canadian Securities Administrators and as required by the June 2009 Edition of the AIM Note for Mining and Oil & Gas Companies. Ben Parsons consents to the inclusion in the announcement of the matters based on their information in the form and context in which it appears and confirms that this information is accurate and not false or misleading.

The technical and scientific information in this press release has been reviewed, verified and approved by Gerald D. Crawford, P.E., who is a "qualified person" as defined by NI 43-101 and is the Chief Technical Officer of Condor Gold plc.

The technical and scientific information in this press release has been reviewed, verified and approved by Dr. Warren Pratt, C.Geol., who is a "qualified person" as defined by NI 43-101.

Technical Information

Certain disclosure contained in this news release of a scientific or technical nature has been summarised or extracted from the technical report entitled "Technical Report on the La India Gold Project, Nicaragua, December 2014", dated November 13, 2017 with an effective date of December 21, 2014 (the "Technical Report"), prepared in accordance with NI 43-101. The Technical Report was prepared by or under the supervision of Tim Lucks, Principal Consultant (Geology & Project Management), Gabor Bacsfalusi, Principal Consultant (Mining), Benjamin Parsons, Principal Consultant (Resource Geology), each of SRK Consulting (UK) Limited, and Neil Lincoln of Lycopodium Minerals Canada Ltd., each of whom is an independent "qualified person" as defined by NI 43-101.

Forward Looking Statements

All statements in this press release, other than statements of historical fact, are 'forward-looking information' with respect to the Company within the meaning of applicable securities laws, including statements with respect to: the ongoing mining dilution and pit optimisation studies, and the incorporation of same into any mining production schedule, future development and production plans at La India Project. Forward-looking information is often, but not always, identified by the use of words such as: "seek", "anticipate", "plan", "continue", "strategies", "estimate", "expect", "project", "predict", "potential", "targeting", "intends", "believe", "potential", "could", "might", "will" and similar expressions. Forward-looking information is not a guarantee of future performance and is based upon a number of estimates and assumptions of management at the date the statements are made including, among others, assumptions regarding: future commodity prices and royalty regimes; availability of skilled labour; timing and amount of capital expenditures; future currency exchange and interest rates; the impact of increasing competition; general conditions in economic and financial markets; availability of drilling and related equipment; effects of regulation by governmental agencies; the receipt of required permits; royalty rates; future tax rates; future operating costs; availability of future sources of funding; ability to obtain financing and assumptions underlying estimates related to adjusted funds from operations. Many assumptions are based on factors and events that are not within the control of the Company and there is no assurance they will prove to be correct.

Such forward-looking information involves known and unknown risks, which may cause the actual results to be materially different from any future results expressed or implied by such forward-looking information, including, risks related to: mineral exploration, development and operating risks; estimation of mineralisation, resources and reserves; environmental, health and safety regulations of the resource industry; competitive conditions; operational risks; liquidity and financing risks; funding risk; exploration costs; uninsurable risks; conflicts of interest; risks of operating in Nicaragua; government policy changes; ownership risks; permitting and licencing risks; artisanal miners and community relations; difficulty in enforcement of judgments; market conditions; stress in the global economy; current global financial condition; exchange rate and currency risks; commodity prices; reliance on key personnel; dilution risk; payment of dividends; as well as those factors discussed under the heading "Risk Factors" in the Company's annual information form for the fiscal year ended December 31, 2019 dated March 31, 2020 and available under the Company's SEDAR profile at www.sedar.com.

Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. The Company disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise unless required by law.

Technical Glossary

Andesite	A commonly occurring type of volcanic rock, of intermediate chemical composition as judged by the proportion of lighter minerals such as quartz and feldspar minerals compared to heavier iron and magnesium-rich minerals.
Assay	The laboratory test conducted to determine the proportion of a mineral within a rock or other material. Usually reported as parts per million which is equivalent to grams of the mineral (i.e. gold) per tonne of rock
Ag	Silver
Au	Gold
Boiling zone	Used to refer to zones in the Earth's crust where hydrothermal fluids change to vaporise (boil). This can happen where there is a drop in confining pressure, either when the fluids rise to the lower pressure surface or near surface, or when tectonic force-induced movements along fault planes result in localised dilational openings. The vaporisation of the hydrothermal fluid can result in the deposition minerals held in solution including gold
Bonanza grade gold	Rock, generally quartz veins, with extremely high concentrations (grade) of gold, typically used when the grade exceeds 31 grams per tonne (1 oz per tonne).
Breccia	A fragmental rock, composed of rounded to angular broken rock fragments held together by a mineral cement or in a fine-grained matrix. They can be formed by igneous, tectonic, sedimentary or hydrothermal processes.
Chalcedonic	A variety of quartz formed by microscopic or submicroscopic crystals. In an epithermal environment, chalcedony is formed in low temperature and pressure conditions high in the system.
Crustiform	A quartz vein texture describing successive banding oriented parallel to vein walls and defined by differences in the size of the crystals, mineral composition or colour.
Dilational fault	Zones where the movement of rock masses along a fault plane result in the rock masses moving apart and creating an open space along all or part of the fault plane. This occurs where movement of the rock masses is at an oblique direction to the fault plane and can occur along extensive areas of the fault or in localised zones due to a curved or irregular shaped fault plane.
Down-dip	Further down towards the deepest parts of an ore body or zone of mineralisation.
Epithermal	Hydrothermal deposits formed at shallow depths below a boiling hot spring system are commonly referred to as epithermal, a term retained from an old system of classifying hydrothermal deposits based on the presumed temperature and depth of deposition.
Fault	The plane along which two rock masses have moved or slide against each other in opposing directions.
Felsic	Igneous rock relatively rich in the minerals feldspar and silica. It is a broad term including the the common intrusive rocks granite and diorite, and the volcanic rocks rhyolite and dacite,
Grade	The proportion of a mineral within a rock or other material. For gold mineralisation this is usually reported as grams of gold per tonne of rock (g/t)
g/t	grams per tonne
Hot springs	A spring of naturally hot water, typically heated by subterranean volcanic activity.
Hydrothermal	Hot water caused by heating of groundwater by near surface magmas and often occurring in association with volcanic activity. Hydrothermal waters can contain significant concentrations of dissolved minerals.
Inferred Mineral Resource	That part of a Mineral Resource for which tonnage, grade and mineral content can be estimated with a low level of confidence. It is inferred from geological evidence and assumed but not verified geological and/or grade continuity. It is based on information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that may be limited, or of uncertain quality and reliability,
Kt	Thousand tonnes
Low sulfidation	Hydrothermal deposits formed at shallow depths below a boiling hot spring system which are dominated by reduced, neutral-pH conditions.
Mineral Resource	A concentration or occurrence of material of economic interest in or on the Earth's crust in such a form, quality, and quantity that there are reasonable and realistic prospects for eventual economic extraction. The location, quantity, grade, continuity and other geological characteristics of a Mineral Resource are known, estimated from specific geological knowledge, or interpreted from a well constrained and portrayed geological model.
NI 43-101	Canadian National Instrument 43-101 a common standard for reporting of identified mineral resources and ore reserves
Open pit mining	A method of extracting minerals from the earth by excavating downwards from the surface such that the ore is extracted in the open air (as opposed to underground mining).
Phreatic breccias	Fragmental rocks formed near the Earth's surface by the interaction of hot rock and cold water, or vice versa. Commonly occur at the top of mineralized epithermal gold systems.
Pyrite	A rock mineral composed of the elements iron and sulphur.
Quartz	A common rock mineral composed of the elements silicon and oxygen.
Rock chip	A sample of rock collected for analysis, from one or several close spaced sample points at a location. Unless otherwise stated, this type of sample is not representative of the variation in grade across the width of an ore or mineralised body and the assay results cannot be used in a Mineral Resource Estimation
Rhyolite	A silica and -rich volcanic igneous rock dominated by fine-grained quartz and feldspar crystals.
Sinter	A mineral deposit that presents a porous or vesicular texture; its structure shows small cavities. These may be siliceous deposits or calcareous deposits.
Stockwork	Multiple connected veins with more than one orientation, typically consisting of millimetre to centimetre thick fracture-fill veins and veinlets.
Strike length	The longest horizontal dimension of an ore body or zone of mineralisation.
Vein	A sheet-like body of crystallised minerals within a rock, generally forming in a discontinuity or crack between two rock masses. Economic concentrations of gold are often contained within vein minerals.

 

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