Condor Gold raises more than £4m for development at La India

The AIM-traded firm said the placing had been undertaken directly by the company, with institutional and other investors.

It said completion of the placing remained conditional, among other things, upon admission of the placing shares to trading on AIM and the Toronto Stock Exchange and, in respect of the Nicaragua Milling subscription, on receipt of the placing funds by 26 July.

The company said it had received conditional approval from the TSX for the placing, adding that the placing price represented a small premium to the 30-day volume weighted average price of 18.82p on 5 July.

It explained that each unit comprised one ordinary share and one third of one share purchase warrant.

Each warrant, which was unlisted and fully transferable, would entitle the holder to purchase one ordinary share at a price of 25p - a 25% premium to the placing price - for a period of 36 months from the date on which the shares issued under the placing were admitted to trading on AIM.

Half of the warrants would be subject to an accelerated exercise period if the closing mid-market price of the ordinary shares on AIM was more than 30p for 10 consecutive trading days.

All of the securities comprising the units would be subject to resale restrictions into Canada, which would expire four months and one day from the date of issue.

“Condor Gold has conducted a private placement to raise gross proceeds of approximately £4.04 million by issuing new ordinary shares representing 27% of the Company's existing issued share capital,” explained chairman and chief executive officer Mark Child.

“The placement proceeds will be used to advance the La India Project towards production following the grant of an environmental permit to construct and operate a 2,800 tonne per day processing plant with capacity to produce 100,000 ounces of gold per annum from La India open pit.

“The proceeds will also be used to meet conditions of the environmental permit, including the completion of engineering and other technical studies and for the acquisition of some or all of the land for the mine site infrastructure.”

Child said the La India open pit was permitted to produce around 600,000 ounces gold over a six-to-seven year period.

“I would like to thank Jim Mellon, my fellow director and shareholder for his staunch support and providing the lead order of £1.25m for the placing and several other existing shareholders who have participated in the placing,” Child said in his statement to shareholders.

“I take this opportunity to welcome Nicaragua Milling Company as a 10.4% shareholder post placement.”

Nicaragua Milling Company is controlled by Randy Martin, who Condor described as a mining engineer with a “long history” of operating in Nicaragua, Central and South America.

Martin was founder and CEO of RNC Gold until its merger with Yamana Gold in 2006.

He developed Hemco Nicaragua, which operates the 1,200 tonnes per day underground and open pit mine at Bonanza, of which 90% was sold to Mineros.

Martin is the chief operating officer of Toronto-listed in-production gold mining company Para Resources, which has projects in Arizona, Columbia and Brazil.

Condor said he also had “extensive experience” of operating toll milling plants for artisanal miners, and currently owned and operates the 200 tonnes per day Plantel Los Angelos toll milling operation in Nicaragua.

“Furthermore, proceeds will be used to complete environmental impact assessments, which are part of the application process for environmental permits for two high-grade satellite feeder pits,” Child said.

He explained that the Mestiza open pit mineral resource was 92,000 tonnes at a gold grade of 12.1 grams per tonne in the indicated category, and 341,000 tonnes at a gold grade of 7.7 grams per tonne in the inferred category.

The America open pit mineral resource was 114,000 tonnes at a gold grade of 8.1 grams per tonne in the indicated category and 677,000 tonnes at a gold grade of 3.1 grams per tonne in the inferred category.

“Condor has conducted internal scoping level studies using information from pre-feasibility studies and preliminary economic assessments on La India Project, which indicate the combined production from the La India open pit with the Mestiza and America feeder pits is projected to be between 94,000 [and] 140,000 ounces of gold per annum for seven years,” Mark Child said.

“Condor is also evaluating its 1.13 million ounce contained gold underground mineral resource, and will commission a NI 43-101 compliant preliminary economic assessment to determine what portion of the mineral resource has the potential to be added to a mine plan at a future date.”