Condor Gold raises £2.5 million as 2017 loss narrows
Shares in Condor Gold (LON:CNR) fell more than 2% in London on Friday after the Nicaragua-focused miner announced full year losses, partly offset by lower costs and impairments.
The company, which also said it had raised £2.5 million in a placing of about 5.1 million units to fund the final development stages of a processing plant at its La India gold project, said pre-tax loss dropped to £3 million in 2017 from £7.7 million a year earlier.
Shares in Condor Gold, which has not generated any revenue in the past two years, were down on the news, trading 2.15% lower to 45.5p at 2:55 p.m. GMT
The company highlighted its submission last month of an amended Environmental and Social Impact Assessment (ESIA) for the processing plant at La India, which eliminated the need to resettle about 1,100 people.
The Nicaragua-focused miner has not generated any revenue in the past two years, but narrowed pre-tax loss to £3 million in 2017 from £7.7 million a year earlier.
The new document, part of the company’s application for an environmental permit, included a redesigned open pit, the relocation of the processing plant 1,200 meters from the village and the possible elimination of the southern waste dump, among other changes
Chief executive Mark Child had previously said La India’s permitting progress had been frustrated by administrative delays.
Condor Gold initially staked concessions in Nicaragua, Central America’s largest country, in 2006. Since then, mining has significantly taken off in the country thanks to the arrival of foreign companies with the money and knowledge to tap into its reserves.
According to an independent study published last year, by exploiting just 0.3% of Nicaragua's land area, the mining sector has been able to double gold production and increase silver output by up to seven times in the last 11 years.
Today, gold is the nation’s third largest export, Child said in an interview with MINING.com earlier this year.
Aware of the country's potential, the company has invested $45 million there to date, completed over 70,000 meters of drilling on its flagship La India asset, and produced two PEAs and a PFS.
In addition to permitting a base case, Condor Gold’s strategy is to prove a major gold district of 4 to 5 million ounces of gold.
According to a 2014 prefeasibility study, La India holds an open pit constrained probable gold reserve of 6.9-million tonnes, grading 3 g/t gold for 675,000 ounces of the precious metal, producing 80,000 ounces annually for seven years.
The project contains a mineral resource in the indicated category of 9.6-million tonnes grading 3.5 g/t gold for 1.08-million ounces of the metal and an inferred resource of 8.5-million tonnes grading 4.5 g/t for 1.23-million ounces of gold.
The firm also has three other concessions, where exploration is actively taking place. In November, the team struck it lucky as it discovered another vein on the 313 km² concession package, covering 98% of the historic La India Gold Mining District.
Nicaragua’s gold production is supplemented by small scale artisanal mining of placer and alluvial placer gold, particularly in the regions that form what is known as the “mining triangle”: Siuna, Rosita and Bonanza, where small-scale gold extraction has been the dominant trade since 1880.