Broker SP Angel has valued Condor Gold PLC (LON:CNR)(OTCMTKS:CNDGF) at US$122mln, allowing for completion and execution risk.
Condor Gold is developing the La India gold mine in Nicaragua within a large, relatively underexplored, licence area with a history of previous gold production dating from the 1930s to the mid-1980s.
Initial expectations are for the production of around 100,000 ounces per year of gold from open-pit mining of the main La India vein system, and nearby high-grade satellite mineralisation, the broker said.
Production at this level would place Condor Gold among the five largest gold producers on London’s AIM market.
The first phase of open-pit mining is expected to evolve to underground operations later in the mine’s life and significant additional exploration targets offer scope for the discovery of completely intact vertical epithermal mineralised systems on the down-thrown side of faults ling to the south of the current proposed mining area at La India.
“We estimate a value for Condor Gold of 102.5p per share based on the discounted value of potential cash flow from initial open-pit mining at La India and its satellites,” said SP Angel.
“Our fair value is currently 40% of the estimated NPV of the initial project in order to reflect the uncertainties of project execution. As progress is achieved, we expect the discount to the full NPV to reduce.”