Condor Gold shares jump on Nicaragua concession licence
Shares in Condor Gold (LON:CNR) climbed over 10% Friday after it announced the Nicaraguan ministry of energy and mines had granted it the Las Cruces concession, which expands its La India gold project package by 45%.
The 25-year exploration and exploitation concession covers an area of 142.6 km2, expanding the La India land package to 455.6 km2. Condor Gold’s project now includes a total 11 adjacent and contiguous exploration and exploitation concessions.
The company can now apply for environmental permit to carry out low impact activities, but before it can start exploration, it will be meeting stakeholders to discuss activities and obtain permission from landowners.
Chairman and CEO Mark Child said the granting of the concession confirmed that Nicaragua was pro-mining and open for business.
He added that the La India project could be a major gold district and that it had the potential to host more than 5-million ounces of gold.
Condor Gold initially staked concessions in Nicaragua, Central America’s largest country, in 2006. Since then, mining has significantly taken off in the country due to the arrival of foreign companies with the cash and knowledge to tap into its reserves.
According to an independent study published last year, by exploiting just 0.3% of Nicaragua’s land, 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.
In August, the company received a long-awaited environmental permit for a 2,800 tonnes-per-day processing plant at La India. Thanks to that green light, construction is expected to start in the next 18 months and extend for up to two years. But before the work begins, the company has to submit to the Ministry of the Environment and Natural Resources final engineered designs for several key components of the mine such as the tailings storage facility.
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.
Other companies currently present in Nicaragua are Canada’s B2Gold and Australia’s Oro Verde.
The fate of Condor Gold’s and other companies’ projects in Nicaragua is currently unclear, as the country has been shaken this year by the largest street protests it has seen since the civil war ended in 1990.
The uprising, mostly led by students, started when President Daniel Ortega tried to change the country’s social security system. He implemented a controversial pension reform resolution intended to halt the growing deficit. The changes increased contributions by workers and employers and reduced retired workers’ pensions.
In May, hundreds of thousands took to the streets of Nicaragua’s capital Managua, calling on Ortega to resign. The police crackdown was immediate and many people were killed, but more protests have been registered all over the country in reaction to the government’s violent reaction ever since.
Nicaragua’s government claims the economic damages from the protests held between April and July amounted to almost $1 billion and about 120,000 jobs lost during the period.
The US government recently imposed financial sanctions on Nicaragua’s vice president, Rosario Murillo, and a top aide, ratcheting up pressure on the Sandinista administration to end its crackdown on the uprising.
Condor’s shares were trading almost 11% to 32p in London at 12:55pm local time.