Resource hopes at Condor

11/03/2008 Robert Tyerman

Gold prospector Condor Resources is eyeing Brazilian production as it takes Central American resources above one million oz.

Chief executive Nigel Ferguson says he expects the AIM-quoted company to be able to produce a new resource statement in the next four to eight weeks, taking overall resources from 747,000 oz of gold and 18.4 million oz of silver to more than one million oz of gold and 21 million oz of silver. Condor expresses high hopes for its high-grade San Albino property in Nicaragua, where a series of adjacent small deposits might, in aggregate, hold 700,000 oz of gold, and for La Calera and Pescadito in Salvador, which Ferguson argues could contain more than one million oz of gold or gold equivalent, with Pescadito rich in silver.

Ferguson says the company is likely to accompany encouraging resource updates with a funding of up to £2 million to advance these and other projects in a region where governments are these days seen as mining friendly. Nearby operators are encountering cash costs, before capital and financing, of no more than $280 an ounce, against a recent gold price of more than $970.

London-based Condor is probing the possibility of involving itself with a private group of UK mining investors in two gold projects in Brazil, capable, says Ferguson, of producing 50,000 oz of gold a year. He reckons it would cost £7 million to £10 million to achieve this, but it would put Condor in the category of a significant near-producer, which fund managers now prefer to exploration hopefuls.

Floated two years ago at 10p, Condor shares have slumped to 2.88p today, valuing the company at £3.75 million. If the resource updates impress and the Brazilian deal becomes a reality, despite the company’s cash–raising plans, the shares could stage a rally.

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