Condor Gold (LSE:CNR) bounced 7.2pc to 23.6p on Tuesday morning after revealing that it has started permitting for two feeder pits at its La India project in Nicaragua. The gold exploration and development business said America and Mestiza could increase open pit production at the asset by 50pc to 120,000oz of gold p.a. for seven years.

The pits have, in aggregate, 206,000ts containing 66,0000oz gold in the indicated category and 152,000oz contained gold in the inferred category. They are located between 2-4km from the location of the processing plant for the La India open pit. This has now been permitted with a processing capacity of 2,800ts a day.

In Tuesday’s update, the firm said it has received the terms of reference to produce an environmental impact assessment for the pit from the Ministry of Environment and Natural Resources (MARENA). This supports the granting of an environmental permit for the development and extraction of contained gold at both sites. The granting comes after MARENA, together with the Ministry of Energy and Mines and Ministry of Forestry, has conducted a site visit inspection of the proposed layout of the pits, waste dumps, and infrastructure.

Tuesday’s development comes after several weeks after Condor announced an updated mineral resource estimate for La India, where it owns a 100pc position. This gave the project a mineral resource estimate of 9.85Mts at 3.6g/t gold for 1.14MMoz gold in the indicated and 8.48Mts at 4.3 g/t gold for 1.179oz in the inferred category.

On Tuesday, Condor said that permitting additional high-grade open pit material at America and Mestiza would help to boost these figures and extend La India’s annual production or its life of mine.

Condor chairman and chief executive officer, Mark Child, added: ‘Permitting the high grade Mestiza and America satellite feeder pits has the potential to increase annual production from open pit material by 50% to 120,000 oz gold p.a. for a seven year life of mine. The feeder pits have in aggregate 206 thousand tonnes ("Kt") at a grade of 9.9 g/t (66,000 oz contained metal) in the Indicated category and 1,018Kt at 4.6 g/t (152,000 oz contained gold in the Inferred category).

‘The feeder pits complement the main, fully permitted La India open pit, which has a robust, economically viable Pre-Feasibility Study ("PFS") with Mineral Reserves of 6.9 million tonnes ("M tonnes" or "Mt") at 3.0 g/t for 675,000 oz gold, which demonstrates annual production of 79,300 oz gold and lower quartile all-in-sustaining cash costs ("AISC") of US$690 per oz gold. The higher grade feeder pits have the potential to materially enhance the Project economics.’

Author: Daniel Flynn

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