At the end of last year, Condor Gold (LON:CNR) has released an updated pre-feasibility study on its 0.8M tpa L a India gold project as wel as a first PEA on a 1.2 million tonnes per annum scenario whereby feeder pits would contribute ore to the processing facility.
The pre-feasibility study which only takes the open pit into consideration has an initial capex of $110M and is expected to produce 614,000 ounces of gold during an initial 9 year mine life at an AISC of $690/oz. This is quite good, but because the mine life is relatively short, the after-tax NPV remains limited to just $92M.
A second and third scenario (of respectively 1.2 and 1.6 million tonnes per year being processed) has tested in a PEA and we do like the outcome of the 1.6Mtpa scenario. The initial capex is a tad higher at $169M, but this will increase the after-tax NPV to $187M using a gold price of $1250/oz as the total gold production will be 1.2 million ounces during a 12 year mine life.
The PFS and two preliminary economic assessments highlight the potential of Condor’s La India project as the company has several options to develop the project and this flexibility could prove to be extremely important in the future. Another drill program consisting of 4,000 meters of drilling has started and this effort could add more ounces to the overall resource, increasing the value of the project.
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Disclosure: The author holds no position in Condor Gold. Please see our disclaimer for current positions.
