Condor Gold (LON:CNR) expects to boost the resources at its La India concession in Nicaragua after acquiring a key concession in the centre of the licence.
Condor had been in dispute with the vendors of the Espinito-Mendoza concession since original purchase terms were agreed in 2011.
Espinito Mendoza includes a portion of the Mestiza vein set and the settlement will allow Condor now to include its resources within the overall La India project.
Mark Child, Condor’s chief executive, said Mestiza had a NI 43-101 compliant resource of 333,000 oz gold, though a Soviet –standard resource estimate was 786,000 oz.
“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,” Child said.
Mestiza was also excluded from the Whittle Enterprise Optimisation at La India, he added.
That showed four different production scenarios ranging from 91,000 to 165,000 oz gold production each year.
Under the new agreement, Condor will pay US$30,000 cash upfront to the Mestiza vendor, a further cash payment of US$470,000 by June and US$200,000 over the following 20 months.
Mestiza remains entitled to a 2.25% net royalty on the production from the concession but not a bonus on reserve estimation.
Condor also no longer has to carry out a 5,000m drilling programme.