TIDMCNR
RNS Number : 6649S
Condor Gold PLC
21 March 2016
Condor Gold plc
7(th) Floor
39 St. James's Street
London
SW1A 1JD
Telephone +44 020 74081067
Fax: +44 020 74938633
21 March 2016
Condor Gold plc
("Condor" or "the Company")
Revised Terms to Acquire the Espinito-Mendoza Concession
Click on, or paste the following link into your web browser, to
view the associated PDF document which includes the map referred to
in Figure 1.
http://www.rns-pdf.londonstockexchange.com/rns/6649S_-2016-3-20.pdf
Condor (AIM:CNR), is pleased to announce, with reference to its
announcements of 24 August 2011 and 12 December 2011, that it has
successfully re-negotiated the terms to acquire 100% of the
Espinito Mendoza Concession (the "Concession") in the heart of La
India Project, Nicaragua. The revised terms end a dispute between
the sellers of the Espinito-Mendoza Concession and the Company as
detailed in Condor's interim report and accounts to 30(th) June
2015. The resolution allows the Company to advance the Concession
on terms acceptable to the Company.
Highlights:
-- Revised terms to acquire 100% of the 200 hectare
Espinito-Mendoza Concession at the heart of La India Project settle
a dispute on improved terms and allows progress of the Concession
on terms acceptable to Condor.
-- Espinito-Mendoza Concession hosts a NI 43-101 compliant
Mineral Resource Estimate of 908kt at 6.66g/t for 208,000 oz gold
and a Soviet classified Mineral Resource of 1,442kt at 13.03g/t
gold for 513,492 oz gold.
-- The enlarged Mestiza Vein Set includes epithermal gold veins
on the Espinito Mendoza Concession and the surrounding La India
Concession and has a NI 43-101 compliant Mineral Resource of
1,490kt at 7.47g/t for 333,000 oz gold and a Soviet classified
Mineral Resource of 2,392kt at 10.21g/t for 785,684 oz gold.
-- The Mestiza Vein Set is excluded from Condor's PFS and PEAs
and has potential to increase NI 43-101 compliant resources,
reserves and gold mineral production from La India Project
-- Micon International produced a report in February 1998
stating: "It is Micon's opinion that La Mestiza is a property of
merit, with good potential to become a small (500 to 800tpd), low
cost mine."
Mark Child CEO comments:
"I am pleased, after many months of negotiation, to have settled
a dispute over the purchase of the high grade Espinito-Mendoza
Concession, which clears the way to advance the Concession and
convert more of the Soviet classified resource on the Mestiza Vein
Set of 2,392kt at 10.21g/t for 785,684 oz gold to western
standards. The Mestiza Vein set hosts a NI 43-101 compliant mineral
resource estimate of 1,490kt at 7.47g/t for 333,000 oz gold. In our
experience, the Soviet GKZ classified resources on La India Project
have generally converted to western standards upon tighter drill
spacing and verification drilling of the previous drill holes. It
is some comfort that Micon International's 1998 report on the
Concession concluded that the property has good potential to become
a small (500 to 800tpd), low cost mine. The Mestiza Vein Set is
excluded from the Whittle Enterprise Optimisation of the PFS and
PEA studies, which detailed 4 production scenarios ranging from
91,000 to 165,000 oz gold production per annum. We remain convinced
that La India Project hosts a substantial gold field with
considerable upside potential."
Background
Condor and Empresa Minera La Mestiza S.A. ("Mestiza"), together
(the 'Parties") executed an Agreement on 18(th) August 2011 to
transfer 100% of the Concession to Condor's wholly owned Nicaraguan
subsidiary, Condor S.A. for a consideration of US$1,625,000 spread
over 36 months payable in cash and shares. (the "Original
Agreement"). Condor has paid US$1,155,000 of this consideration and
US$470,000 is due. A dispute arose over the transfer of clean
surface rights on the Concession to Condor, a 5,000m drill
commitment by the Company and a bonus to be paid to Mestiza on a
Mineral Reserve estimation on the Concession
The Agreed Settlement
Condor has made a cash payment of US$30,000 to Mestiza, a
further cash payment (the "Further Payment") of US$470,000 is due
by 1(st) June 2016. Additional payments of US$10,000 per month are
payable for 20 months commencing 30 days after the Further Payment.
Mestiza remains entitled to a 2.25% NSR on mineral extraction from
the Concession, but not a bonus on reserve estimation. Both were
part of the Original Agreement. Condor is not obligated to conduct
a 5,000m drilling programme and assumes responsibility to clean up
the surface rights.
Geology
The Espinito Mendoza Concession covers a rectangular 2 sq km
area containing one of the highest concentrations of epithermal
veins on La India Project. It is located at the heart of La India
Project in the middle of Condor's wholly owned La India Concession.
See Figure 1. As elsewhere in the District, the gold is low
sulphidation epithermal mineralisation contained within quartz
veins, breccias, stockwork zones and fault gouge clay, hosted by a
Tertiary felsic to andesitic volcanic sequence. The gold
mineralisation is open along strike and to depth.
Mineral Resource Estimates
A Soviet back exploration campaign estimated a Soviet GKZ
mineral resource of 1,422k tonnes at 13.03g/t gold for 513,492 oz
gold on the Concession. See table 1 below. SRK Consulting (UK)
Limited converted the Soviet mineral resource estimate to 980k
tonnes at 6.66g/t gold for 208,000 oz gold. See Table 2 below:
Table 1 Espinito-Mendoza Concession Soviet GKZ Resource
Estimate
Soviet GKZ mineral resource estimate
(1991) Espinito Mendoza concession
----------------------------------------------- ---------
Vein Category Tons (kt) Grade Au (oz)
(g/t)
-------------- ---------- ---------- ------- ---------
Espinito C1,C2,P1 237 9.83 85,199
-------------- ---------- ---------- ------- ---------
Buenos Aires C2, P1 317 16.80 171,489
-------------- ---------- ---------- ------- ---------
Tatiana C2,P1 887 9.00 256,804
-------------- ---------- ---------- ------- ---------
TOTAL 1,442 13.03 513,492
-------------------------- ---------- ------- ---------
Table 2 Espinito Mendoza Concession NI 43-101 Mineral Resource
Estimate
SRK NI-43-101 resource estimate (30-09-2014)
Espinito Mendoza concession
-----------------------------------------------------------
Vein Category Tons (kt) Grade Au (oz)
(g/t)
-------------- ----------- ---------- ------- ---------
Espinito Inferred 200 7.70 50,000
-------------- ----------- ---------- ------- ---------
Buenos Aires Inferred 210 8.00 53,000
-------------- ----------- ---------- ------- ---------
Tatiana Inferred 570 5.80 105,000
-------------- ----------- ---------- ------- ---------
TOTAL 980 6.66 208,000
--------------------------- ---------- ------- ---------
The Mestiza Vein Set is defined as the area of the Espinito
Mendoza Concession including veins that overlap the surrounding La
India Concession. A Soviet backed exploration campaign estimated a
Soviet style mineral resource of 2,392k tonnes at 10.21g/t gold for
785,694 oz gold. See Table 3 below. SRK Consulting (UK) Limited
converted the Soviet mineral resource estimate to an NI 43-101
mineral resource estimate of 1,490k tonnes at 7.47g/t gold for
333,000 oz gold. See table 4 below.
Table 3 Mestiza Vein Set Soviet GKZ Mineral Resource
Estimate
Soviet GKZ mineral resource
estimate (1991)
--------------------------------- ---------- ------- ---------
Vein Category Tons (kt) Grade Au (oz)
(g/t)
--------------------- ---------- ---------- ------- ---------
Espinito C1,C2,P1 353 9.83 112,013
--------------------- ---------- ---------- ------- ---------
San Pablo P1 39 12.20 15,338
--------------------- ---------- ---------- ------- ---------
Buenos Aires Jicaro C2, P1 317 16.80 171,489
--------------------- ---------- ---------- ------- ---------
Tatiana (Espinito
Mendoza) C2,P1 887 9.00 256,804
--------------------- ---------- ---------- ------- ---------
Tatiana (La India) C2,P2 795 9.00 230,051
--------------------- ---------- ---------- ------- ---------
TOTAL 2,392 10.21 785,694
--------------------------------- ---------- ------- ---------
(MORE TO FOLLOW) Dow Jones Newswires
March 21, 2016 03:00 ET (07:00 GMT)
Table 4 Mestiza Vein Set NI 43-101 Mineral Resource Estimate
SRK NI-43-101 resource estimate (30-09-2014)
------------------------------------------------------------------
Vein Category Tons (kt) Grade Au (oz)
(g/t)
--------------------- ----------- ---------- ------- ---------
Espinito Inferred 200 7.70 50,000
--------------------- ----------- ---------- ------- ---------
Buenos Aires Jicaro Inferred 210 8.00 53,000
--------------------- ----------- ---------- ------- ---------
Tatiana (Espinito
Mendoza) Inferred 570 5.80 105,000
--------------------- ----------- ---------- ------- ---------
Tatiana (La India) Inferred 510 7.60 125,000
--------------------- ----------- ---------- ------- ---------
TOTAL 1,490 7.47 333,000
---------------------------------- ---------- ------- ---------
Historical Mining
Of the four principle veins, Tatiana, Espinito, Jicaro and
Buenos Aires (sub-divided into the offset and overlapping Buenos
Aires 1 and 2 veins), only the Espinito Vein was historically
exploited as a satellite mine to the main La India and
America-Constancia underground developments between 1938 and 1956.
All the gold was processed at the central La India Mill which
produced an estimated 576,000 oz gold at an average grade of
13.4g/t during that time. It is not known how much of this
production came from the Espinito workings, which exploited a 500m
strike length from two development levels. In addition to the
principal veins a number of linking or cross-cutting veins have
also been shown to host gold mineralisation but have not yet been
assessed by drilling or underground workings.
Micon International Report
In February 1998, Micon International Limited produced a review
of the resources, reserves and business plan for the Mestiza
Project for Diadem Resource Limited, the owner of the 200 hectare
Espinito-Mendoza concession. The conclusion reads: "It is Micon's
opinion that La Mestiza is a property of merit, with good potential
to become a small (500 to 800tpd), low cost mine." And goes on to
say "A significant amount of work, however, still remains to be
done before the resources at La Mestiza property can be upgraded to
reserves. It is Micon's opinion, this further work is fully
justified by the exploration results obtained to date." Assuming a
head grade of 7g/t gold a 500tpd to 800tpd mill would produce
between 40,000 oz to 60,000 oz gold per annum. It is important o
note that the Mestiza Vein Set is excluded from Condor's NI 43-101
compliant PFS and PEA studies on La India Project.
Figure 1
http://www.rns-pdf.londonstockexchange.com/rns/6649S_-2016-3-20.pdf
Technical Glossary
C1 C1 reserves are broadly
equivalent to JORC indicated
resources and have been
estimated by a sparse
grid of trenches, drill
holes or underground workings.
The quality and properties
of the deposit are known
tentatively by analyses
and by analogy with known
deposits of the same type.
The general conditions
for exploitation are partially
known
---------------------- --------------------------------------
C2 C2 reserves are broadly
equivalent to JORC inferred
resources and have been
extrapolated from limited
data, probably only a
single hole
---------------------- --------------------------------------
g/t grams per tonne
---------------------- --------------------------------------
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
---------------------- --------------------------------------
inferred 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
---------------------- --------------------------------------
NI 43-101 Canadian National Instrument
43-101 a common standard
for reporting of identified
mineral resources and
ore reserves
---------------------- --------------------------------------
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
---------------------- --------------------------------------
PEA Preliminary Economic Assessment
- A conceptual-level study
used to demonstrate basic
economic viability under
Canadian National Instrument
43-101
---------------------- --------------------------------------
PFS Preliminary Feasibility
Study - Overall economic
accuracy of +/- 25%
---------------------- --------------------------------------
quartz veins veins of quartz rock develop
in fractures and fissures
in the surrounding rock.
They are deposited by
saturated geothermal liquids
rising to the surface
through the cracks in
the rock and then cooling
---------------------- --------------------------------------
Soviet Classification The former Soviet system
for classification of
reserves and resources,
developed in 1960 and
revised in 1981, which
divides mineral concentrations
into seven categories
of three major groups,
based on the level of
exploration performed:
explored reserves (A,
B, C1), evaluated reserves
(C2) and prognostic resources
(P1, P2, P3)
---------------------- --------------------------------------
Soviet GKZ the former Soviet State
Commission for Mineral
Reserves
---------------------- --------------------------------------
strike length The longest horizontal
dimension of an ore body
or zone of mineralisation
---------------------- --------------------------------------
- Ends -
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