Condor Gold (TSX: COG; LSE: CNR) has decided to put its flagship La India open pit gold project in Nicaragua up for sale, preferably to a gold producer with mine building expertise.
The miner said the board reviewed the company's options, including going through financing and construction phase as a single-asset, single-jurisdiction company with no existing gold production.
It concluded, however, it was in the best interests of the company and all stakeholders to offload its assets and has hired Hannam and Partners to assist with the sale.
Condor Gold completed in October a definitive feasibility study for La India, which confirmed the miner's plan to build a mine in two stages, with two additional permitted high-grade feeder pits that can be added during the early years of production.
The study also demonstrates La India has the capacity to produce an average of 81,524 oz. gold annually for the initial six years of its 8.4 mine life, at a relatively low total upfront capital cost of $106 million, chief executive Mark Child said.
The two additional feeder pits can boost early production to over 100,000 ounces gold a year, with a stage 2 expansion to 150,000 ounces of gold per annum, he said.
Condor Gold staked concessions in Nicaragua in 2006. Since then, the country's mining sector has taken off due to the arrival of foreign companies with the cash and expertise to tap into existing reserves.
However, recently imposed U.S. sanctions against the nation targeting the oppressive regime of President Daniel Ortega have added uncertainty for companies working there.
La India project covers a 588-sq.-km land package, that holds 12 contiguous and adjacent concessions.
The asset hosts a high grade indicated resource of 9.7 million tonnes at 3.5 grams gold per tonne for 1.1 million of gold. It also has 8.6 million inferred tonnes at 4.3 grams gold for 1.2 million oz. of gold.
Condor Gold's other assets in the country include nearly 1,000 hectares of land purchased for the mine site infrastructure for $4.2 million and a new $6.5 million SAG Mill package.