Aim- and TSX-listed Condor Gold has outlined two mining scenarios in an updated technical study for its La India project, in Nicaragua, both of which yielded robust economics.
The highlight of the technical study, chairperson and CEO Mark Child said on Thursday, was a post-tax, post upfront capital expenditure net present value (NPV) of $418-million, with an internal rate of return (IRR) of 54%, and a 12-month payback period, assuming a gold price of $1 700/oz.
Under the first scenario, which entails a 1.4-million-tonne-a-year openpit and underground operation, capital expenditure will be $160-million, where the underground development is funded through cash flow.
This scenario yields an average output of 150 000 oz/y over an initial nine years of production. Over the 12-year mine life, 1.47-million ounces of gold will be mined at an all-in sustaining cost (AISC) of $958/oz.
“The openpit 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 two years from openpit material and underground mining funded out of cashflow,” said Child.
The 1.225-million-tonne-a-year La India openpit and feeder pits scenario has an IRR of 58% and an NPV of $302-million, at a discount rate of 5% and a gold price of $1 700/oz. Initial capital expenditure is $153-million and the payback period 12 months.
This scenario will produce an average of 120 000 oz/y over an initial six years of production and 862 000 oz over a nine-year life-of-mine. AISC averages $813/oz.
Condor has openpit mineral resources of 8.58-million tonnes at 3.3 g/t gold for 903 000 oz gold in the indicated category and 1.90-million tonnes at 3.6 g/t gold for 220 000 oz gold in the inferred category, permitted for extraction.
The 2021 preliminary economic assessment, prepared by SRK Consulting, is the first technical report update since 2014.