LONDON (Alliance News) - Condor Gold PLC Tuesday said its operations at the La India project in Nicaragua are relatively safe from a reasonable drop in the gold price.
The gold exploration company made the comment following a sensitivity analysis of the mineral resource estimate it completed for the site in November.
The company said that analysis based on a fluctuating gold price has indicated the La India project would be possible at much lower prices than today, which would lead to a higher cut-off grade, the lowest level of gold necessary to be recovered at the site for economic viability.
Condor Gold said that if the cut-off grades are increased from 0.5 grams per tonne to 3 grams per tonne, then the indicated resource drops from 8.4 million tonnes at 3.1 grams per tonne gold for 838,000 ounces gold to 2.7 million tonnes at 6.3 grams per tonne gold for 547,000 ounces gold.
Therefore, in the event of lower gold prices, subject to further studies, the company can move to a higher-grade gold operation at the La India open pit and operate at reduced cash costs.
The company said operations at La India are only materially reduced at gold prices below USD1,050 per ounce of gold. The metal was quoted Tuesday at USD1,238.43 per ounce.
"Investors should take comfort from the high grade nature of La India Open Pit," Chairman Mark Child said in a statement, "which puts Condor Gold in a favourable position compared to many junior gold resource companies and in my view means there will be an open-pit gold mine at La India Project."
In November, the company's mineral resource estimate showed a total mineral resource of 18.4 million tonnes at 3.9 grams per tonne, or 2.3 million ounces of gold.
The total was made up of an indicated mineral resource of 9.6 million tonnes at 3.5 grams per tonne of gold and an inferred mineral resource of 8.8 million tonnes at 4.4 grams per tonne of gold.
Condor Gold also said the silver resource at the site came to 2.7 million ounces at 6.2 grams per tonne of silver.
The company added that its total open pit mineral resources come to 1.1 million ounces at 3.1 grams per tonne of gold, comprising 921,00 ounces at 3.0 grams per tonne of gold for its La India project, 160,000 ounces at 4.2 grams per tonne of gold at its America Open Pit, and 57,000 ounces at 1.9 grams per tonne at the company's Central Breccia Open Pit.
Condor Gold shares were up 15% to 75.00 pence, putting them in the top three AIM movers Tuesday.
By Tom McIvor; tommcivor@alliancenews.com; @TomMcIvor1
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Condor Gold (CNR)