Condor Gold PLC (AIM:CNR, TSX:COG, FRA:W5XA, OTC:CNDGF) said a technical study on its La India gold project in Nicaragua confirmed the viability of two possible routes to production.
SRK Consulting (UK) produced the strategic mining study to the preliminary economic assessment standard and assessed scenarios of just open pit mining and an alternative of open pit plus an underground operation.
For a dual operation, the net present value (NPV) is an estimated US$418mln with a mine life of nine years at a production rate of 150,000 oz of gold annually.
Payback on build costs would be within 12 months at a 54% rate of return using a 5% discount, a gold price of US$1,700 per oz and estimated all-in sustaining costs of US$958 per oz.
Just mining the open pits, the NPV is US$302mln with production of 120,000 oz a year over an initial six years and sustaining costs of US$813 per oz.
Mark Child, Condor’s chairman and chief executive, said: "I am delighted to announce robust economics for two mining scenarios in an updated technical study on Condor's 100% owned La India Project.
“The highlight of the technical study is a post-tax, post upfront capital expenditure NPV of US$418 million, with an IRR of 54% and 12 month pay-back period, assuming a US$1,700 per oz gold price, with an average annual production of 150,000 oz gold per annum for the initial 9 years of gold production.
“ The open pit mine schedules have been optimised from designed pits, bringing higher grade gold forward resulting in average annual production of 157,000 oz gold in the first 2 years from open pit material and underground mining funded out of cashflow".