Shares in Condor Gold (LON:CNR) climbed as much as 5.8% on Monday morning after it increased the mineral resource estimate at its 100%-owned La India gold project in Nicaragua, noting the potential for an expansion.
The mineral resource update totalled 9.85 million tonnes at 3.6 grams per tonne of gold for 1.14 million of indicate ounces, a surge of 57,000 ounces from the previous update.
The growth, however, was non-material, and as a result, doesn’t change the mineral reserve referenced in the 2014 pre-feasibility study, Condor Gold said.
The mineral resource proved two new satellite open pit resources, taking the total to four pits.
The mineral resource revise included 8,222m drilling completed since the previous update in September 2014, and proved two new satellite open pit resources, taking the total to four pits.
The four satellite pits had the potential to act as feeder pits, to provide mineralized material to the permitted plant, and to supplement feed from the main La India open pit, Condor said.
The company highlighted the new open pit resource on Mestiza, which shows 2,000 tonnes at a grade of 12.1g/t for 36,000 ounces contained gold in the indicated category and 341,000 tonnes at a grade of 7.7g/t gold for 85,000 ounces in the inferred category.
La India also has a total underground resource of 1.27 million tonnes at a grade of 5.8g/t gold for 238,000 gold ounces in the indicated category and 5.47 million tonnes at a grade of 5.1g/t gold for 889,000 ounces gold in the inferred category.
Chief executive Mark Child said the upgrade was a “timely reminder of the high-grade nature” of the La India gold deposit.
He added that Condor would be looking at adding the satellite pits’ contained gold to the mine schedule to supplement the ore feed from the La India open pit.
“This has the possibility to either increase annual production and/or extend the life of mine,” he said.
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 company’s shares gained 1.48p to 26.98p by 8:15 am on the news, but dipped later and were trading at 26.35p by noon London time. Year-to-date, the stock has lost about 15% of its value.
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