Condor Gold PLC (LON: CNR, TSX:COG) said it agreed to buy a new Semiautogenenuous (SAG) Mill, a key item needed to bring the company's La India gold and silver project into production, for about US$6.5mln in cash and shares.
Under the deal, Condor will issue US$3.0mln worth of shares to First Majestic Silver Corp (TSX:FR), with the balance of about US$3.5mln to be paid in cash over the next three-four months
Condor said the purchase of the mill reduces the time for delivery of a SAG Mill to La India project Nicaragua by about 12 months. Manufacturing of the mill and component parts are approximately 90% complete and ready to ship.
The SAG Mill is estimated to have a throughput of up to 2,300 tonnes per day (tpd), or 0.8mln tonnes per annum on a sustained basis, based on the metallurgical characteristics of the ore and mineralised material at La India, according to Metso Outotec's technical support group, while SRK Consulting (UK) Ltd expect initial production to be about 80,000 to 100,000 ounces of gold a year.
"The key message is Condor has purchased and sized the mill at 2,300tpd, significantly shortened the mill delivery time, set a trajectory for detailed project design and an accelerated path to production," said Condor chairman and chief executive Mark Child.
"What's more, Condor has acquired a state of the art, complete new SAG Mill package with warrantees, manufactured and supplied by Metso Outotec, the premier manufacturer of grinding mills and entire grinding systems for the global mining industry," he added.
The new mill forms the first stage of production and the company said it aims to materially expand production capacity after two to three years.