“It’s the biggest resource of any Aim-listed company,” says Mark Child of the 2.4 mln ounce La India gold project in Nicaragua.
It’s a straightforward enough statement, but one that’s perhaps not been appreciated as much by the UK market in recent months as it might have been at the height of the gold boom.
Hence Child’s decision to take an OTCQX listing for Condor Gold Limited (LON:CNR) and give the company some exposure to high net worth investors in the USA.
CLICK HERE: For a daily round-up of all the Proactive news
“There are three OTC markets boards,” explains Child. “The QX is the premier blue chip board. Marks & Spencer is on it. It is DTC-eligible so US retail can buy the shares but it means your regulator remains in London.”
That’s ideal for Child, who is quite happy with having Condor regulated in the UK, but is equally keen for Condor’s shares to show up on the trading screens of US investors.
“It makes an awful lot of sense for me to access US retail high net worths. Institutions are going to wait for a placement – typically they don’t buy in the secondary.”
So, off to the OTCQX it is. Trading commenced on 24 April, and although it’s too early to say how large the volumes will shape up to be, the timing looks propitious.
The mining bear market is well and truly over, even if we haven’t quite yet entered a full-blown bull phase.
“The strategy is twofold,” says Condor boss
There’s money around for mining, as Child has adeptly demonstrated. Condor raised £5.2 mln in February of this year, money it is now deploying on the ground at La India.
“The strategy is twofold,” says Child. “The first part is to permit and construct a 100,000 ounce per annum plant taking feed out of a single pit.”
It’s tempting to refer to this as a big pilot plant, since optimisation studies conducted by Whittle Consulting produced a range of production scenarios for La India, with the largest running to 165,000 ounces per year.
Which brings us nicely on to the second part of the strategy.
This, says Child, involves showing that La India in fact lies within “a major gold district.”
The early manifestations of that theory have allowed for the development of the expanded production scenarios. But there could be much more.
Ross Beaty now Condor's biggest shareholder
It’s on the strength of this potential that the well-known mining entrepreneur and investor Ross Beaty has come onto the Condor register in a big way – he’s now the company’s biggest shareholder.
And it’s to test this hypothesis further that the company has already embarked on a 10,000 metre drill campaign that aims both to expand the existing resource at La India and to undertake scout drilling to attempt to identify another major vein.
Notably,, there’s a NI 43-101 compliant resource of 334,000 ounces on the Mestiza vein set, excluded from the mining studies in the PFS and PEAs but the same area has a resource of 780,000 oz gold at 10 grams per tonne to Russian oviet classification.
“We’ve got the rig up there now,” says Child. “What we’re trying to do is convert the Soviet resource into 43-101. That could represent a material change for the company. We think we can get 700,000 ounces into 43-101 at 7.5 grams per tonne, which paves the way for another 40,000 ounces per year of production.”
All-in that would take the potential production from La India up to 200,000 ounces per year, 100,000 from open pit and 100,000 from underground.
Whether it will actually shape up like that remains to be seen. But there’s certainly plenty there to get a US audience excited, especially since the gold price has shown considerable signs of life lately.