Nicaragua-focused Condor Gold (TSX: COG; LSE: CNR) has been granted an environmental permit for the development and exploitation of the Mestiza gold asset, a complementary open pit to the company’s flagship La India gold project, in the country’s west.
The high-grade Mestiza deposit hosts more than 100,000 contained oz. gold resources and is one of the two satellite pits of the fully permitted La India, which is slated to produce 80,000-100,000 oz. gold per year.
“When added to the high-grade La India open pit, Condor has just over 1 million oz. gold open pit mineral resources, including mineral reserves permitted for extraction,” the company’s chief executive, Mark Child, said in a press release.
He noted that Mestiza has double the gold grade compared to La India. It is also located within easy trucking distance (less than 4 km) from the firm’s planned and already permitted processing plant. The facility will have a capacity of up to 2,800 tonnes per day.
With the Mestiza and America feeders in operation, Condor Gold would be able to churn out 120,000 oz. annually during a seven-year mine life.
News of the permit sent the company’s shares surging 53%, or 20¢, to 58¢ in mid-morning trading in Toronto. Over the last year, the company’s shares have traded within a range of 31¢ and 70¢. Condor has about 95 million common shares outstanding, giving it a $55-million market capitalization.
The miner staked concessions in Nicaragua, Central America’s largest country, in 2006. Since then, mining has significantly taken off in the country due to the arrival of foreign companies with the cash and expertise to tap into its reserves.
Last year, the government of Nicaragua granted Condor Gold the 132-sq.-km Los Cerritos exploration and exploitation concession, which expanded the La India project concession area by 29% to a total of 588 square kilometres.
Condor has also attracted a partner — Nicaragua Milling. The privately held company, which took a 10.4% stake in the company in September, has operated in the country for two decades.