Preliminary Economic Assessment

RNS Number : 2009Z

Condor Gold PLC

05 March 2013

 



Condor Gold plc 7th Floor 39 St. James's Street London SW1A 1JD Telephone [phone]  Fax: [phone]

To view this announcement in full, including a map of the Location of the Drilling on the La India and America Vein Sets, please click on the link below: - 

http://www.rns-pdf.londonstockexchange.com/rns/2009Z_1-2013-3-4.pdf

5^th March 2013

Condor Gold plc

(''Condor'' or "the Company")

Preliminary Economic Assessment for La India Project, Nicaragua.

Condor (AIM:CNR), is pleased to announce the positive results of a Preliminary Economic Assessment ("PEA") on its 100% owned La India Project gold deposit in Nicaragua. The PEA was prepared by SRK Consulting (UK) Limited ("SRK"). A copy is available on www.condorgold.com  

Highlights of La India Project PEA

·     Open pit and underground gold mine with an initial Life of Mine ("LOM") 13 years at an average gold grade of 3.8g/t gold for total production of 1,463,000 oz recovered gold.

·     Average production of 152,000 oz gold per annum for first 8 years with years 1 to 4 average production of 172,000 oz gold per annum and years 5 to 8 average production of 133,000 oz gold per annum.

·     LOM average operating cash cost US$575 per oz gold

·     Estimated pre-production capital cost of US$180.5m for mine construction and processing construction, with a 3 year pay back period. Total capital expenditure over entire LOM US$287m

·     Cumulative LOM earnings before interest, tax, depreciation and amortisation ("EBITDA") of US$1,046m and net cash flow of US$512m

·     Net Present Value ("NPV") after tax of US$325m, based on a US$1,400 gold price and 5% discount rate, producing an Internal Rate of Return ("IRR") of 33%

·     Study based on mineral resource as documented in Independent NI43-101 Technical report by SRK in September 2012. Excludes current 15,000m drilling programme.

Mark Child, Chairman and CEO Condor Gold commented:

"The PEA for La India Project details average annual gold production of 152,000 oz gold for the first 8 years of an initial mine life of 13 years. 172,000 oz gold production per annum in the first 4 years and 133,000 oz gold production per annum in years 5 to 8. Total production of 1,463,000 oz gold over the Life of Mine is at an average operating cost of US$575 per oz gold; production is split evenly between open pit and underground mining. The NPV of US$325m and IRR of 33% are after a 3% government royalty and 30% corporation tax. The payback period for the capital equipment is 3 years.  

The PEA is based on the September 2012 NI 43-101 technical report produced by SRK Consulting (UK) Ltd, detailing a resource of 2.4M oz gold at 4.6g/t.  It excludes 8,000m drilling completed of a current 15,000m drilling programme which has the objectives of: 1) increasing the indicated resource within the La India open pit. 2) optimising the open pit by way of a 1,700m geotechnical drilling programme, which may result in the steepening the pit angle from 40 degrees for the footwall and 42 degrees for the hanging wall, thereby allowing either a deeper pit and/or reduced strip ratios and improved economics. 3) increasing the resource on the America Vein Set and proving a second open pit. The Strategy remains to identify and prove additional open pit resources on La India Project, which if successful will require the publication of an updated PEA in due course."

Project Overview

Condor holds 100% ownership of a 280 sq km concession package covering 98% of the historic La India Gold Mining District, north of Managua, Nicaragua. The concession package comprises of eight contiguous concessions. The concessions encompass gold mineralised veins with a total strike length of over 18km, including an area of historic underground mine workings. The veins extend over known strike lengths of between 0.5km to 2.5km. La India Underground Mine, which is located on La India Concession, produced an estimated 1.7Mt at 13.4g/t for 576,000 oz gold between 1938 and 1956. The project has excellent infrastructure. It is located 10km from the Pan-America Highway, a major paved highway traverses the project, a hydro electric dam is close by.

The Mineral Resource on the La India Project stands at 16.2 Mt at 4.6 g/t for 2,375,000 oz gold, including 5.3 Mt at 4.4 g/t for 751,000 oz gold in the Indicated Mineral Resource category with the balance in the Inferred category. The 3 main areas consist of the La India Vein Set of 1,484,000 oz gold at 4.0 g/t (containing the open pit resource), the America Vein Set of 403,000 oz gold at 6.0 g/t gold and the Mestiza Vein Set of 334,000 oz gold at 7.0g/t gold.

The PEA envisages mining simultaneously from the La India, America and Mestiza Vein Sets, feeding a centralised mill for 1.5Mtpa. The PEA provides for 1,463,000 oz recovered gold at an average grade of 3.8g/t over the LOM. Average annual production is forecast at 152,000 oz gold over the first 8 years. La India Project mine production over the LOM is almost equal from underground and open pit mining methods.

Mineral Resources

The Mineral Resource on the La India Project stands at 16.2 Mt at 4.6 g/t for 2,375,000 oz gold, including 5.3 Mt at 4.4 g/t for 751,000 oz gold in the Indicated Mineral Resource category with the balance in the Inferred category. The Mineral Resource is based on some 40,298 m of drilling, 7,200 m of trench sampling and over 9,000 original underground mine grade control channel samples on nine of the veins within the La India Project area. The 3 main areas consist of the La India Vein Set of 1,484,000 oz gold at 4.0 g/t (containing the open pit resource), the America Vein Set of 403,000 oz gold at 6.0 g/t gold and the Mestiza Vein Set of 334,000 oz gold at 7.0g/t gold.

The open pit Mineral Resource reported within a US$1,400 per ounce gold optimised Whittle pit shell above a cut-off grade of 1.0g/t gold. The in-pit Mineral Resource is 8.21 million tonnes at a grade of 3.61g/t gold containing 954,000 oz gold of which 534,000 oz gold at 3.9 g/t is an Indicated Mineral Resource and 420,000 oz gold at 3.3 g/t is an inferred mineral resource. Beneath the optimised Whittle open pit shell there is an underground resource of 2.77 million tonnes containing 432,000 oz gold split between La India Vein with 104,000 oz gold at 7.8 g/t gold and the California veins with 328,000 oz gold at 4.4 g/t gold. Furthermore, there are 1,561,000 oz silver at 5.5 g/t silver within the open pit and 719,000 oz silver at 8.1 g/t silver beneath the open pit.

Table 1 below gives SRK's CIM compliant Mineral Resource Statement as at 14 September 2012 for the La India Project, as signed off by Ben Parsons, a Competent Person as defined by the CIM Code.

SRK CIM Compliant Mineral Resource Statement as at 14 September 2012 for the La India License Area Summarised per Veinset*

	Veinset Name	Cut-Off	Gold			Silver
		(g/t)	Tonnes  (kt)	Grade Au (g/t)	Contained Au (koz)	Tonnes  (kt)	Grade Ag (g/t)	Contained Ag (koz)
Subtotal Areas	La India veinset (gold and silver)	Subtotal 1.0 g/t (OP)	4,220	3.9	534	4,220	6.3	850
		Subtotal 2.3 g/t (UG)	570	5.3	97	570	6.3	115
	La India veinset (gold only)	Subtotal 1.5 g/t
	America veinset	Subtotal 1.5 g/t	480	7.8	120
	Mestiza veinset	Subtotal 1.5 g/t
	Other veins	Subtotal 1.5 g/t
	Subtotal Indicated (gold and silver estimate)		4,790	4.1	631	4,790	6.3	965
	Subtotal Indicated (gold only estimate)		480	7.8	120
	SUBTOTAL INDICATED		5,270	4.4	751	4,790	5.7	965
Subtotal Areas	La India veinset (gold and silver)	Subtotal 1.0 g/t (OP)	3,990	3.3	420	3,990	5.6	724
		Subtotal 2.3 g/t (UG)	2,200	4.7	336	2,200	8.5	604
	La India veinset (gold only)	Subtotal 1.5 g/t	540	5.8	100
	America veinset	Subtotal 1.5 g/t	1,620	5.5	284
	Mestiza veinset	Subtotal 1.5 g/t	1,490	7.0	333
	Other veins	Subtotal 1.5 g/t	1,120	4.2	151
	Subtotal Indicated (gold and silver estimate)		6,190	3.8	756	6,190	6.7	1,328
	Subtotal Indicated (gold only estimate)		4,770	5.7	868
	SUBTOTAL INFERRED		10,960	4.6	1,624	6,190	3.8	1,328

*Open Pit Mineral Resources are reported within a conceptual whittle pit shell at a cut-off grade of 1.0 g/t. Cut-off grades are based on a price of USD1,400 per ounce of gold and gold recoveries of 90 percent for resources, without considering revenues from other metals. Note optimised pit shells are based on Indicated and Inferred Mineral Resources

Underground mineral resources beneath the open pit are reported at a cut-off grade of 2.3 g/t. Cut-off grades are based on a price of USD1,400 per ounce of gold and gold recoveries of 90 percent for resources, without considering revenues from other metals.

Mineral resources as previously quoted by SRK (22 December 2011) are reported at a cut-off grade of 1.5 g/t.

Mineral Resources are not Ore Reserves and do not have demonstrated economic viability. All figures are rounded to reflect the relative accuracy of the estimate and have been used to derive sub-totals, totals and weighted averages. Such calculations inherently involve a degree of rounding and consequently introduce a margin of error. Where these occur, SRK does not consider them to be material. All composites have been capped where appropriate. The Concession is wholly owned by and exploration is operated by Condor Gold plc. Silver grades only estimated for La India - California 2012, due to limited confidence in historical silver assays on other veins. Gold Mineral Resources reported Inclusive of Silver Mineral Resources

Mining, Processing and Production Schedule

La India Project gold deposit is amenable to open pit and underground mining of its gold bearing mineralisation. The PEA envisages mining simultaneously from the La India, America and Mestiza Vein Sets, feeding a centralised mill for 1.5Mtpa.

Table 2 Key Production Statistics the LoMP

Parameter	Unit
Production Tonnage	Mt	12.767
Production Grade	g/t Au	3.8
Contained Metal	Moz Au	1.573
Mine Life	years	15

Table 3 Key Production Statistics for the LoMP

Vein			Total	Year  1	Year  2	Year  3	Year  4	Year  5	Year  6	Year  7
Project
Open Pit	Production	kt	7,306	27	204	697	1,000	1,001	1,000	999
	Grade	g/t	3.2	3.4	3.5	4.3	5.0	3.5	2.3	2.4
	Metal	koz	760	3.0	23.0	95.9	161.0	111.4	73.4	76.1
Underground	Production	kt	5,461		60	305	470	470	470	470
	Grade	g/t	4.6		4.9	4.8	4.7	4.7	4.7	4.7
	Metal	koz	813		9.4	46.7	71.7	71.7	71.7	70.9
Total	Production[1]	kt	12,767	27	264	1,002	1,470	1,471	1,470	1,469
	Grade	g/t	3.8	3.4	3.8	4.4	4.9	3.9	3.1	3.1
	Metal	koz	1,573	3	32	143	233	183	145	147
Vein			Year  8	Year  9	Year 10	Year 11	Year 12	Year 13	Year 14	Year 15
Project
Open Pit	Production	kt	1,003	997	378
	Grade	g/t	2.7	2.1	5.0
	Metal	koz	88.5	67.4	60.3
Underground	Production	kt	470	470	470	470	470	450	280	136
	Grade	g/t	4.6	4.6	4.6	4.6	4.6	4.5	4.5	4.5
	Metal	koz	69.7	69.0	68.9	68.9	68.9	65.8	40.6	19.7
Total	Production[2]	kt	1,473	1,467	848	470	470	450	280	136
	Grade	g/t	3.3	2.9	4.7	4.6	4.6	4.5	4.5	4.5
	Metal	koz	158	136	129	69	69	66	41	20

NB: Assumption that years 1 and 2 are stockpiled

La India Open Pit

In order to assess the open pit potential of the La India veins, SRK has undertaken pit optimisation in CAE Mining's NPV Scheduler ("NPVS"). NPVS uses the Lerchs-Grossmann algorithm for determining the shape of an optimal pit using a set of input parameters.

The optimisation process produces a series of 'nested' pit shells, each the optimum pit at a given metal price. The nested pit shells provide an indication of the sensitivity of the deposit at various metal prices given the same input costs and modifying factors. The nested pit shells are evaluated using a base case reference metal price of 1,200 USD/oz Au.

Table 4 NPVS Optimisation Parameters

Parameters	Units	Input
Geotechnical
Hanging Wall	(Deg)	42.0
Footwall	(Deg)	40.0
Mining Factors
Dilution	(%)	5.0
Recovery	(%)	95.0
Processing
Recovery	(%)	93.0
Operating Costs
OP Mining Cost	(USD/tmoved)	2.20
Processing Cost	(USD/tore)	20.00
General and Administrative (OP)	(USD/tore)	5.00
UG Mining Cost	(USD/tore)	50.00
General and Administrative (UG)	(USD/tore)	10.00
Selling Cost	(%)	5.0
Royalty	(%)	3.0
Metal Price
Gold	(USD/oz)	1,200
Other
Discount Rate	(%)	10
Cut-Off Grade
Marginal Cut-Off - OPEX	(USD/t ore)	25.00
In-Situ Marginal Cut-Off	(g/t Au)	0.80

Two sets of pit optimisation scenarios have been undertaken, a base case with consideration for open pit mining only and an 'Underground' trade-off optimisation. This provides an indication of the difference in cost between underground and open pit extraction to exclude blocks from the optimum pit shell that should be preferentially mined with underground methods.

The USD900/oz pit shell has been selected as a basis for the open pit production schedule (7.3 Mt ore at 3.4 g/t Au) due to the low incremental value of the pit shell above this threshold.

Table 5 La India Open Pit Schedule Option for the US$900/oz pit shell

Year	Units	Total	1	2	3	4	5	6	7	8	9	10
Rock	(kt)	105,489	8,620	12,771	14,334	14,349	14,589	13,647	8,911	9,197	8,020	1,050
Waste	(kt)	98,184	8,593	12,567	13,637	13,350	13,588	12,647	7,912	8,194	7,024	672
Stripping Ratio	(t:t)	13.4	317.8	61.7	19.6	13.0	13.6	12.7	7.9	8.2	7.0	1.8
RoM	(kt)	7,306	27	204	697	1,000	1,001	1,000	999	1,003	997	378
	(g/t Au)	3.2	3.4	3.5	4.3	5.0	3.5	2.3	2.4	2.7	2.1	5.0
	(koz Au)	760	3	23	96	161	111	73	76	88	67	60

^{NB: Production for first two years assumed to be stockpiled for processing in Year 3 of the schedule.}

SRK notes that the preliminary economic assessment is preliminary in nature and includes Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorised as Mineral Reserves. There is no certainty that the preliminary economic assessment will be realised.

Slope Sensitivity

A sensitivity analysis is undertaken to determine the impact of slope angles at a USD1,200/oz Au metal price (with all other parameters unchanged). The base case (42/40 degree hanging wall and footwall) has been compared with a range of overall slope angles between 50 and 30 degrees. The results of the analysis are shown in Table 6 In addition Table 6 shows a selected set of pit shells which contain approximately 800 koz Au at various pit slope angles. The impact of higher stripping ratios at shallower angles can be seen in the higher cash costs.

Table 6 Results of Sensitivity Analysis for Applying Pit Slope Angles to the Open Pit Optimisation (Standard Method)

Scenario	Rev. Factor	Stripping Ratio	Waste	In-Situ Ore	In-Situ Metal	In-Situ Grade	Cash Cost
	(USD/oz)	(t:t)	(Mt)	(Mt)	(koz Au)	(g/t)	(USD/oz)
1,200 USD/oz Pit Shells
50/50 Degrees	1,200	15.8	167.9	10.7	1,230	3.6	702
45/45 Degrees	1,200	15.9	150.3	9.5	1,070	3.5	717
40/42 Degrees	1,200	17.9	159.5	8.9	1,010	3.5	761
40/40 Degrees	1,200	18.1	156.4	8.6	973	3.5	769
35/35 Degrees	1,200	20.4	164.3	8.1	871	3.4	850
30/30 Degrees	1,200	22.2	131.7	5.9	653	3.4	878
Selected Pit Shells
50/50 Degrees	700	10.1	67.1	6.6	803	3.8	558
45/45 Degrees	820	12.2	84.2	6.9	804	3.6	621
40/42 Degrees	900	13.4	98.2	7.3	800	3.4	682
40/40 Degrees	950	14.2	103.6	7.3	798	3.4	700
35/35 Degrees	1,140	19.7	152.7	7.8	835	3.3	837

Underground Mining

The underground optimisation has been undertaken on each of the mineralised veins included in the Resource and is limited to those zones below the proposed open pit mining (where relevant) and the America and Mestiza vein Sets. Underground optimisation uses CAE Mining's Mineable Shape Optimiser ("MSO") software. This software package has been applied as it can model the individual mining blocks underground and can be quickly repeated for different cut-off grades. In addition, it incorporates the effect of dilution due to overbreak as part of the optimisation process.

Table 7 Input Parameters Used for MSO Optimisation

MSO Block Model	Mineralised Vein
Cut-Off Grade	2.5 g/t Au
Mining Block Height	30 m
Mining Block Length(3)	10 m
Minimum Mining Width	1.2 m
Hangingwall Dilution Skin	0.2 m
Footwall Dilution Skin	0.2 m
Dilution Grade	0 g/t Au
Minimum Pillar Between Parallel Stopes	10 m

SRK has applied a dilution grade of 0 g/t Au. This is considered a conservative approach as there is potential for much of the waste to be mineralised providing some minor upside potential to the figures that result from this analysis.

Capital costs

The upfront capital cost (not including sustaining capital or pre-stripping) estimates derived from this evaluation for each scheduling option are shown in Table 8. Processing capital costs are estimated as a single processing plant and are applied to all veinsets, weighted according to the total tonnes processed from each.

Table 8 Upfront Capital Cost Estimates (MUSD)

Company	La India (OP)	La India (UG)	America	Mestiza	Total
Mine Construction	70.7	18.6	14.0	10.9	114.2
Processing Construction	38.0	14.5	8.9	4.9	66.3
Total	108.7	33.1	22.9	15.8	180.5

The capital costs are assumed to be upfront capital only and expended in the first three years of the LoMP according to the following distribution:

Year 1 - 40%;

Year 2 - 40%; and

Year 3 - 20%.

All capital requirements after this period are assumed to be covered by sustaining capital.

Closure capital is assumed to be 10% of the construction capital and is distributed evenly over two years, starting the final year of production. Sustaining capital is assumed to be 5% of the total operating cost for any given year.

Operating Costs

The applied operating costs are summarised in

Table 9 Operating Costs Used in Economic Analysis of La India Deposit

Cost Parameter	Unit	Operating Cost
Mining Cost - Open Pit	USD/trock	2.20
Mining Cost - Underground	USD/tprod	50
Processing Cost	USD/tprod	20
G&A Cost	USD/tprod	10

The operating costs provided for underground are assumed to include all operating development requirements for mining.

Financial Assumptions

In undertaking the technical-economic model for the project, the following assumptions have been applied:

·     Metal price                   - USD 1,400/oz Au

·     Mill Recovery - Au       - 93%;

·     Discount Factor          - 5%⁽⁴⁾;

·     Royalty                        - 3% of Gold Price;

·     Selling Costs               - 5% of Gold Price;

·     Corporate Tax Rate    - 30%⁽⁵⁾;

·     VAT                             - not considered; and

·     Amortisation                - 10% straight line.

In addition, no allowance has been made for the value of the equipment at the end of the mine life.

Financial Model

A financial model is produced for the LoMP in the form of a discounted cashflow model ("DCF") applying the financial parameters discussed above. For each scenario, the results are calculated for each veinset and the combined project.

Summary of Key Results from Financial Model

Recovered Metal (koz)	Revenue (MUSD)	Capital Expenditure(6) (MUSD)	Operating Expenditure (MUSD)(7)	NPV (MUSD)	IRR	Payback Period (years)
1,463	2,049	287	842	324.9	33%	3

The LoMP demonstrates a positive NPV  after all taxes and royalties of USD324.9 million with an IRR of 33%, a payback period of 3 years and an operating cash cost of USD575/oz gold.

Based on the limited technical work that has been undertaken and the assumptions underlying this economic analysis SRK concludes that there is potential for profitable mining to take place at the La India deposit through targeting the La India, America and Mestiza veinsets. The positive financial indicators (IRR and NPV) suggest that further studies and exploration into the development of the project are justified.

The project is most sensitive to gold prices and a reduction of approximately 34% (USD917/oz) may result in the project becoming marginal.

Operating costs also play a key role in the economics of the deposit. An increase of a little over 67% (approximately 134/t) will also result in a marginal project. This is a possibility given the large variation in operating costs for Vein mining projects and will ultimately form a key part in the next phase of the deposits development.

In line with current strategy, mineralised material can be exploited from the three largest veinsets simultaneously to maximise the feed into the plant. The La India veinset is seen produce the most favourable economics due largely to the size of the Resource, high grades and higher production rate, improving capital efficiencies.

SRK recommends that future studies include an assessment on the sequencing of the various operations. There is a substantial decrease in production after the depletion of the open pit Resources. Logically, this would result in a subsequent increase in operating costs and may require a partial decommissioning. For the purposes of this study, the potential impacts of this have been ignored due to the early stages of the project's development and the potential for future exploration to expand the Resource base that the evaluation is based on.

Sequencing the underground operations after the open pit will flatten the production rate over an extended life of mine plan. As revenues are delayed until later in the schedule, there will be a reduction in the cashflow, however, so will the upfront capital costs reducing fundraising requirements. The pre-production exploration drilling costs will also reduce as the target mineralisation is closer to the surface and the number of exploration targets is reduced. This could bring the project into production earlier, partially offsetting the reduction in NPV. It would also allow revenue from the open pit to fund the underground exploration programme.

Figure 10. Location of the Drilling on the La India and America Vein Sets within the La India Project area.

Resource Estimate Notes

The Mineral Resource Estimate completed by SRK Consulting (UK) Ltd ("SRK"), and the reporting standard adopted for the reporting of the Mineral Resources is that defined by the terms and definitions adopted the terminology, definitions and guidelines given in the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Standards on Mineral Resources and Mineral Reserves (December 2005) as required by National Instrument 43-101.

The majority of the drilling during 2012 has been focused on the La India and California veins for which SRK created a block model using parent block dimensions of 25 metres x 25 metres x 10 metres, into which up to 24 x 2 metre composite samples per block were used for estimation employing an ordinary kriging routine. Blocks have been subcelled to an appropriate level to reflect the geometry of the mineralisation. All composites have been capped where appropriate.

SRK has considered geological continuity, grade continuity, quality of the digitised database, sampling density, distance of block estimates from samples and estimation quality in order to classify the deposit in accordance with The CIM Code. Data quality, drill hole spacing and the interpreted continuity of grades controlled by the veins has allowed SRK to classify portions of the veins in the Indicated and Inferred Mineral Resource categories. The resource statement has been depleted for historical mining.

The La India and California Mineral Resource is constrained within an optimised Whittle open pit shell, with SRK electing to use a 30% premium applied to market consensus long term gold price forecasts from over 30 contributors, resulting in a long term optimistic gold price of US$1400 /oz; this approach is in line with other gold producing companies' reporting methods. For the other optimised Whittle input parameters, SRK has briefly reviewed typical mining, processing, and administrative costs for a range of gold mines in the region. Based on the assumed costs and a recovery of 90% using conventional gold mineralised material processing. SRK has applied a cut off grade of 1.0 g/t gold for the material with potential to be mined from surface, based on benchmarked parameters defined as part of an initial conceptual study and a cut-off grade to 2.3 g/t gold material with the potential to be mined underground.

In the case of veins not updated as part of the 2012 update SRK has quoted the Mineral Resource as reported in the previous Mineral Resource Statement (dated 30 December 2011), using a cut-off grade of 1.5 g/t gold.

Competent Person's Declaration

The information in this announcement that relates to the mineral potential, geology, Exploration Results and database is based on information compiled by and reviewed by Dr Luc English, the Country Exploration Manager, who is a Chartered Geologist and Fellow of the Geological Society of London, and a geologist with seventeen years of experience in the exploration and definition of precious and base metal Mineral Resources. Luc English is a full-time employee of Condor Gold plc and has sufficient experience which is relevant to the style of mineralization and type of deposit under consideration, and to the type of activity which he is undertaking to qualify as a Competent Person as defined in the June 2009 Edition of the AIM Note for Mining and Oil & Gas Companies. Luc English 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.

 - Ends -

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

Condor Gold plc	Mark Child, Executive Chairman and CEO [phone]	Luc English, Country Manager Nicaragua [phone]
Beaumont Cornish Limited Ocean Equities Limited	Roland Cornish. James Biddle [phone] Will Slack [phone]
Farm Street Media	Simon Robinson [phone]

About Condor Gold plc:

Condor Resources plc is an AIM listed exploration company focused on developing gold and silver resource projects in Central America. The Company was admitted to AIM on 31st May 2006 with the stated strategy to prove up CIM/JORC Resources in Nicaragua and El Salvador. Condor has seven 100% owned concessions in La India Mining District ("La India Project"); three 100% owned concessions in three other project areas and 20% in the Cerro Quiroz concession in Nicaragua. In El Salvador, Condor has 90% ownership of four licences in two project areas.

Condor's concession holdings in Nicaragua currently contain an attributable CIM/JORC compliant resource base of 2,497,000 ounces of gold equivalent at 4.6 g/t in Nicaragua and an attributable 1,004,000 oz gold equivalent at 2.6g/t JORC compliant resource base in El Salvador. The Resource calculations are compiled by independent geologists SRK Consulting (UK) Limited for Nicaragua, and Ravensgate and Geosure for El Salvador.

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.

Technical Glossary

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
CIM	Canadian Institute of Mining, Metallurgy and Petroleum whose terminology, definitions and guidelines are an internationally recognised reporting code as defined by the Combined Reserves International Reporting Standards Committee (CRIRSCO) as required by National Instrument 43-101.
Dip	A line directed down the steepest axis of a planar structure including a planar ore body or zone of mineralisation. The dip has a measurable direction and inclination from horizontal.
Foot wall	The rock adjacent to and below an ore or mineralised body or geological fault. Note that on steeply-dipping tabular ore or mineralised bodies the foot wall will be inclined nearer to the vertical than horizontal.
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
Hanging wall	The rock adjacent to and above an ore or mineralised body or geological fault. Note that on steeply-dipping tabular ore or mineralised bodies the hanging wall will be inclined nearer to the vertical than horizontal.
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
Indicated resource	that part of a Mineral Resource for which tonnage, densities, shape, physical characteristics, grade and mineral content can be  estimated with a reasonable level of confidence. It is based on exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes. The locations are too widely or inappropriately spaced to confirm geological and/or grade continuity but are spaced closely enough for continuity to be assumed
Intercept	Refers to a sample or sequence of samples taken across the entire width or an ore body or mineralized zone. The intercept is described by the entire thickness and the average grade of mineralisation
oz	troy ounces
kt	Thousand tonnes
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
Mt	Million tonnes
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).
oz	Troy ounce, equivalent to 31.103477 grams
Strike length	The longest horizontal dimension of an ore body or zone of mineralisation.
True width	The shortest axis of a body, usually perpendicular to the longest plane. This often has to be calculated for channel or drill samples where the sampling was not exactly perpendicular to the long axis. The true width will always be less than the apparent width of an obliquely intersect sample.
Vein	A sheet-like body of crystalised 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.
Wallrock	The rock adjacent to an ore or mineralised body or geological fault.

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⁽¹⁾ LoMP does not include production from San Lucas, Cristalito-Tatescame or Cacao veins

⁽²⁾ LoMP does not include production from San Lucas, Cristalito-Tatescame or Cacao veins

 

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