Condor Resources closes in on 1.5 million ounce gold resource target

Condor Resources (LON:CNR) is fast approaching a targeted JORC resource of 1.5 million ounces of gold in Nicaragua.

The explorer took the running total to 1.255 million ounces with a maiden resource of 209,000 ounces at 6.7 grams per tonne from its newly acquired Espinito Mendoza property.

This was based on historic exploration data.

Condor bought the Espinito for US$1.63 million in August. 

The land lies in the centre of the group of concessions that are collectively known as the La India project.

Today’s update comes just a fortnight after it booked a maiden resource of 87,000 ounces to its Rio Luna deposit in Nicaragua’s central highlands.

Eagerly anticipated are the results of a 10,000 metre drilling campaign, which it is hoped will spit out a further 300,000 ounces of resource – and take the group beyond 1.5 million ounces.

“Condor is in an aggressive resource growth phase, quickly adding ounces at the historic mine project,” said Sam Spring, analyst at Ocean Equities.

“The large drilling programme being completed on the concession should sustain the resource growth pace throughout the next twelve months. 

“This gives Condor a large resource base on which to carry out scoping studies on how to best convert ounces in the ground to cash flow. 

“The next item of news flow from the company is expected to be a resource expansion following the inclusion of this year’s 10,000 metre of drilling results.” 

The drill rigs keep on spinning well into 2012 as the group completes the remainder of its 20,000-metre programme. 

By that time, in early summer, the 2 million ounce landmark ought to have been hit. At this point Child and his team need to sit down and decide the next step.

One route might be to compile a bankable feasibility study on the 2 million ounces, thereby adding some detailed economics to the project.

The alternative, however, could see it restart the drilling to prove up a further one to two million ounces at La India. 

Whether it does this or not may in turn depend on the results of a deep drilling programme. This is perhaps the most interesting and exciting phase of Condor’s drill programme. To date the group has drilled to an average depth of just 150 metres.

Two of the rigs it has onsite have the capacity to go down to 500 metres. And they will identify the point at which two of the main veins, which run parallel to each other for a length of over 1,000 metres at surface, converge at a depth of around 200 metres beneath surface.

The results of this crucial phase of drilling are expected by the end of the first quarter of next year.

Before he embarks on a more detailed analysis of the project, the Condor chief is keen to sketch in some financial details with a conceptual study of La India, which is expected to be an open-pit and underground operation. 

Those who have followed Condor will know it also has a gold-silver project in El Salvador of just over 1 million ounces. 

However its progress has been hindered by a mining moratorium introduced as the government of the Central American country assessed how best to implement stronger environmental laws.

A report is being compiled by the Tau Group of Spain, and publication is imminent.