Condor Gold interim results released

Condor Gold {AIM: CNR} recently published their H1 2017 results.

 

 

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RNS Number : 3598R

Condor Gold PLC

21 September 2017

Condor Gold plc

7th Floor

39 St. James’s Street

London SW1A 1JD

Telephone +44 020 74932784

Fax: +44 020 74938633

21 September 2017

Condor Gold Plc

(“Condor” or “the Company”)

Interim Report and Accounts for the Six Months Ended 30 June 2017

Highlights

Condor Gold PLC (“Condor Gold”, “Condor”, the “Group” or the “Company”), an AIM listed gold exploration company, presents its unaudited interim financial report for the six month period to 30 June 2017.

Condor completed a Pre-Feasibility Study (“PFS”) and two Preliminary Economic Assessments (“PEAs”) on La India Project in Nicaragua in December 2014. Whittle Consulting Limited produced a mining optimisation study in January 2016, which produced an average NPV US$196 million and average IRR 30%across four production scenarios. Production ranges from 101,000oz gold per annum from a single open pit to 165,000oz gold per annum once feeder pits and underground production is included. Condor has applied to permit a base case, which has a processing plant of 2,800 tonnes per day capable of producing 100,000oz gold per annum for the first five years of production from a single open pit. Condor’s drilling programme in the first half of 2017 was aimed at expanding the current mineral resource of 18Mt at 4.0g/t gold for 2.31Moz gold and proving a major Gold District.

Highlights to 30 June 2017

   –      GBP5.242 M raised by way of a private placement of new ordinary shares. 
   –      7,291 m drilling completed on the Mestiza vein set and scout drilling prospects.

— High grade ore shoot on the Tatiana vein identified for a strike length 300 m, depth of 200 m and average width of 2.2 m.

— LIDC348 drill width 3.6 m (true width 2.3 m) at 23.3 g/t gold and 66.6 g/t silver from 160.5 m depth.

— LIDC348 is 100 m vertically down dip of LIDC344 drill width 3.3 m at 28.3 g/t gold and demonstrates a high grade ore shoot which extends to 200 m below surface.

— LIDC360 drill width 3.1 m (true width 2.7 m) at 14.4 g/t gold and 29.2 g/t silver from 40.3 m depth.

— Soil geochemistry survey completed over entire 313 km(2) La India Project area identifying two major basement feeder zones in a structurally complete geological setting.

   –      Condor's shares commenced trading on the OTCQX Market in the United States.

Post Period Highlights

— 5,922 m drill programme completed on Mestiza, with drilling restricted to the top 200 m (below ground surface).

— A high-grade ore shoot on the Tatiana vein is defined over a strike length of 450 m. It has mineralised true widths up to 4.6 m (averaging 2.2 m over the main mineralised section).

— LIDC365 drill width 3.60 m (true width 3.12 m) at 13.7 g/t gold and 13.9 g/t silver from 142.6 m downhole depth.

Mark Child, Chairman and Chief Executive of Condor Gold, commented:

“It is a pleasure to report these results and the strong progress that the Company has made at its La India Project. During the first half of the year, Condor has focussed on proving a major Gold District whilst continuing the permitting process for the 100,000 oz processing plant at the La India Project.

“We have completed a soil geochemistry programme, covering the entire La India Project area, which has identified two major mineralised basement feeder zones and generated several new drill targets.

“A significant drilling programme of approximately 6,000 m has also been undertaken at Mestiza, and current mapping has identified a larger vein system than previously thought. Whilst this is excluded from the PFS and PEAs, a successful resource conversion of the Soviet style resource of 2,392 kt at 10.2 g/t gold for 785,694 oz gold has the potential to add large, high grade, and relatively shallow resources to a future mine plan, thereby increasing the annual gold production, life of mine, and project economics.

“In addition, a high grade ore shoot with an estimated grade of 10 g/t gold, strike length of 450 m and depth of 200 m has been identified on the Tatiana vein, one of the highlights of the drill results so far.

“In the coming months the Company will carry out further exploration work in order to prove a major Gold District, and I look forward to updating shareholders on the progress of this, and the permitting process, in due course.”

A copy of the Company’s unaudited Interim Report for the six months ended 30 June 2017 is also available on the Company’s website, www.condorgold.com.

For further information please visit www.condorgold.com or contact:

 
 Condor Gold         Mark Child, Executive 
  plc                 Chairman and CEO 
                      +44 (0) 20 74932734 
 Beaumont Cornish     Roland Cornish 
  Limited              and James Biddle 
                       +44 (0) 20 7628 
  Numis Securities     3396 
  Limited              John Prior and James 
                       Black 
 
                       +44 (0) 20 72601000 
 Blytheweigh         Tim Blythe and Camilla 
                      Horsfall 
                      +44 (0) 02 7138 
                      3204 

Company number: 05587987

CONDOR GOLD PLC

Interim Report and Accounts

For the Six Months Ended 30 June 2017

CONDOR GOLD PLC

CONTENTS OF THE INTERIM REPORT

FOR THE SIX MONTHS TO 30 JUNE 2017

 
TABLE OF CONTENTS                             Page 
------------------------------------------ –  – - – 
Highlights                                      2 
                                               3 - 
Chairman's Statement                            5 
                                               6 - 
Review of Operations & Project Overview         13 
                                               14 
Concession Data                                - 19 
Independent Review Report                      20 
Condensed Consolidated Statement of 
 Comprehensive Income                          21 
Condensed Consolidated Statement of 
 Financial Position                            22 
Condensed Consolidated Statement of 
 Changes in Equity                             23 
Condensed Consolidated Cash Flow Statement     24 
                                               25 
Notes to the Condensed Financial Statements    - 29 

CONDOR GOLD PLC

HIGHLIGHTS

FOR THE SIX MONTHS TO 30 JUNE 2017

Condor Gold PLC (“Condor Gold”, “Condor”, the “Group” or the “Company”), an AIM listed gold exploration company presents its unaudited interim financial report for the six month period to 30 June 2017.

Condor completed a Pre-Feasibility Study (“PFS”) and two Preliminary Economic Assessments (“PEAs”) on La India Project in Nicaragua in December 2014. Whittle Consulting Limited produced a mining optimisation study in January 2016, which produced an average NPV US$196 million and average IRR 30% across four production scenarios. Production ranges from 101,000 oz gold per annum from a single open pit to 165,000 oz gold per annum once feeder pits and underground production is included. Condor has applied to permit a base case, which has a processing plant of 2,800 tonnes per day (“tpd”) capable of producing 100,000 oz gold per annum for the first five years of production from a single open pit. Condor’s drilling programme in the first half of 2017 was aimed at expanding the current mineral resource of 18 Mt at 4.0 g/t Au for 2.31 Moz gold and proving a major Gold District.

Highlights to 30 June 2017

   –      GBP5.242 M raised by way of a private placement of new ordinary shares. 
   –      7,291 m drilling completed on the Mestiza vein set and scout drilling prospects.

— High grade ore shoot on the Tatiana vein identified for a strike length 300 m, depth of 200 m and average width of 2.2 m.

— LIDC348 drill width 3.6 m (true width 2.3m) at 23.3 g/t gold and 66.6 g/t silver from 160.5 m depth.

— LIDC348 is 100 m vertically down dip of LIDC344 drill width 3.3 m at 28.3 g/t gold and demonstrates a high grade ore shoot which extends to 200 m below surface.

— LIDC360 drill width 3.1 m (true width 2.7 m) at 14.4 g/t gold and 29.2 g/t silver from 40.3 m depth.

— Soil geochemistry survey completed over entire 313 km(2) La India Project area identifying two major basement feeder zones in a structurally complete geological setting.

   –      Condor's shares commenced trading on the OTCQX Market in the United States.

Post Period Highlights

— 5,922 m drill programme completed on Mestiza, with drilling restricted to the top 200 m (below ground surface).

— A high-grade ore shoot on the Tatiana vein is defined over a strike length of 450 m. It has mineralised true widths up to 4.6 m (averaging 2.2 m over the main mineralised section).

— LIDC365 drill width 3.60 m (true width 3.12 m) at 13.7 g/t gold and 13.9 g/t silver from 142.6 m downhole depth.

CONDOR GOLD PLC

CHAIRMANS STATEMENT

FOR THE SIX MONTHS TO 30 JUNE 2017

Dear Shareholder,

I am pleased to present Condor Gold PLC’s (“Condor Gold”, “Condor”, the “Group” or the “Company” www.condorgold.com) unaudited interim financial report for the six months ended 30 June 2017.

On the 20 February 2017, the Company announced it had raised GBP5.242 M by way of a private placement of new ordinary shares (See RNS for details). The fund raising has allowed the Company to advance its twin strategy of permitting and constructing a base case 2,800 tpd processing plant at La India Project, Nicaragua with the capacity to produce 100,000 oz gold per annum from a single open pit and secondly to prove a major Gold District at La India Project by adding 1 M to 2 Moz gold to the current NI 43-101 compliant mineral resource of 18 Mt at 4.0 g/t gold for 2.31 Moz gold. Permitting is taking longer than anticipated, but this provides time and an opportunity to expand the resource and prove a major Gold District while we are waiting for permits. The strategy is to expand the core area of the three main vein sets, which are close together, from 2.1 Moz gold to 3 Moz gold and prove a major Gold District containing 4 M to 5 M oz gold.

Exploration

Condor has a dual exploration strategy. First to expand the resources within the core area of the three main vein sets of La India, America and Mestiza from 2.1 Moz gold to 3 Moz gold. Secondly, to prove a major Gold District of 4 M to 5 M oz gold within the 313 km(2) La India Project. It is estimated that approximately 20,000 m drilling is required to expand the resource within the three main vein sets from 2.1 Moz gold to 3 Moz gold. The geological team has developed a multi-disciplined approach combining detailed geological mapping, a soil geochemistry survey, a helicopter born geophysics survey and continued updating of the structural geological model to generate exploration targets and prove a major Gold District. The exploration targets are followed up with trenching and scout drilling.

In March, Condor commenced an initial drill programme of approximately 6,000 m on Mestiza, which was completed in August. The objective is to convert a historic Soviet mineral resource of 2,392 kt at 10.2 g/t gold for 785,694 oz gold to Canadian NI 43-101 standard. Mestiza currently hosts a NI 43-101 compliant Inferred Mineral Resource of 1,490 kt at 7.47 g/t for 333,000 oz gold.

The highlight of the drill results so far is the delineation of a high grade ore shoot with an estimated strike length of 450 m, depth of 200 m (average true width of 2.2 m) on the Tatiana vein. The drill result for LIDC344, drill width of 3.30 m at 28.3 g/t gold is 60 m vertically beneath surface. The drill result for LIDC358, drill width of 3.55 m at 23.3 g/t gold is approximately 100 m vertically below LIDC344.

Condor’s geologists, current mapping on Mestiza, have identified a larger vein system than previously thought. The Mestiza vein set covers an area of 3.5 km north to south, and of 1 km width. Rock chip samples of 41.5 g/t gold and 47.7 g/t gold are located 2 km north of the recent drilling. Mapping will continue and is aimed at identifying further high-grade shoots by targeting the dilational bends in the vein.

Mestiza is excluded from the current mine plans in the PFS and PEAs. A successful resource conversion of the Soviet style resource has the potential to add large, high grade, and relatively shallow resources to a future mine plan, thereby increasing the annual gold production, life of mine, and project economics. It is some comfort that Micon International’s 1998 report on the Espinito-Mendoza Concession concluded that the property has good potential to become a small (500 to 800 tpd), low cost mine. Mestiza has the potential to add 40,000 oz gold per annum to the mine plan.

During the first half, Condor’s geologists worked on the soil geochemistry survey, which has now been completed over the entire 313 km(2) La India Project. It is a major milestone in proving La India Project hosts a major Gold District. Major Gold Districts tend to be discovered in complex structural settings such as La India Project. The soil geochemistry survey has identified two major, mineralised basement feeder zones running noth west to south east through the Project, cut by the Highway Fault, which down-throws the south-eastern part of the District, which is in turn cut by an east-west link structure, to produce such a complex structural setting. Condor’s multi-disciplined approach and a boots-on-the-ground philosophy, is generating several new drill targets and will eventually contribute to the global gold resource.

CONDOR GOLD PLC

CHAIRMANS STATEMENT

FOR THE SIX MONTHS TO 30 JUNE 2017

The Company has completed approximately 2,800 m of scout drilling since November 2016 on four exploration targets. Drill intercepts on the Cacao vein included 7.85 m at 3.75 g/t, and 7.85 m at 2.95 g/t gold and the Andrea vein of 5.1 m at 1.9 g/t gold are highly encouraging. Follow up drilling is planned.

Permitting

The permitting process is ongoing. Readers are referred to: 1) The December 2014 announcement detailing a robust, economically attractive NI 43-101 technical report containing a PFS and two PEAs and 2) the January 2016 Whittle Optimisation of the PFS and PEA studies detailing four production scenarios ranging from 91,000 to 165,000 oz gold production per annum based on the PFS and PEAs. 3) The 2016 audit annual report and accounts as issued on 19 May 2017. Mineral concessions in Nicaragua are granted by the Ministry of Energy and Mines (“MEM”) for a period of 25 years and contain both exploration and exploitation permits and therefore allow a mine to be constructed and operated subject to a successful Environmental and Social Impact Assessment (“ESIA”) being approved by the Ministry of the Environment and Natural Resources (“MARENA”) who grant an Environmental Permit. The latter is seen as the “master permit”, with other permits for electricity, explosives etc. to follow.

In November 2015, Condor formally submitted a 700 page ESIA document to MARENA, applying for an Environmental Permit for the construction and operation of an open pit mine, a CIL processing plant and associated infrastructure at the La India Project. The ESIA envisaged two production scenarios using a 2,300 tpd processing plant as detailed in the PFS and a larger 2,800 tpd processing plant as detailed in the Whittle Optimisation. The Whittle Optimisation estimates an average of 101,000 oz gold production per annum for the first five years of the life of mine, once the Inferred Material within the pit is included. All-in-sustaining-cash-cost are circa US$700 per oz gold and upfront capital cost are approximately US$120 M. The ESIA includes processing of an additional 10,000 oz of gold per annum from artisanal miners through the main processing plant, although the artisanal miners ore is excluded from the PFS, PEAs and Optimisation Studies.

MARENA has confirmed in writing that the Company has passed the technical studies contained within the ESIA. As disclosed in the PFS, it is envisaged that approximately 300 dwellings have to be relocated as part of the development of 800 hectares of mine site infrastructure. The extraction of mineralised ore from La India open pit requires the relocation of these dwellings over the life of mine. MARENA has requested a detailed resettlement action plan, which has been prepared and is ready to present to the Government. The Government will require the inhabitants of the dwellings to agree to the terms of the resettlement as part of the permitting process; in addition the Company is committed to carrying out resettlement in accordance with the requirements of the IFC Performance Standards, specifically PS5. This requires negotiated settlements to be reached with each household and the provision not only of new homes and comparable infrastructure, but livelihood replacement in a new location, with interim livelihood support if necessary. The Company has developed a number of plans for preparing for and implementing this work, written in conjunction with experienced resettlement practitioners and reviewed by the International Finance Corporation (“IFC”), the private sector investment body of the World Bank, team dedicated to the project. In April 2017 the Company hired an additional 10 people to work in the social department to add depth to the team communicating with key stakeholders.

Permitting is taking longer than anticipated. The main reason for the delay is the requirement for the physical and economic displacement of approximately 300 households to implement the project design. Resettlement will be implemented through negotiated settlements, and appropriate measures to mitigate adverse impacts on displaced persons and host communities will be carefully planned and implemented. As far as possible, expropriation will be avoided.

CONDOR GOLD PLC

CHAIRMANS STATEMENT

FOR THE SIX MONTHS TO 30 JUNE 2017

During the run up to the Presidential elections in November 2016, several large projects seeking permits in Nicaragua, including La India, were asked to keep a low profile with regards to their communications with local communities. In January 2017, I held a meeting with three Government Ministers and a senior member of the Presidency (the “Committee”). The Committee said the Presidency supports the Project and wants to see a new mine re-opened at Mina La India, the US$120 M in foreign direct investment and 500 jobs. The Committee asked for a Resettlement Action Plan (“RAP”) to be presented to it: once the Committee and local mayors approve the RAP, it could be presented to the village. It is understandable that the Government should want to approve a RAP prior to the RAP being presented to the Community. However, an unforeseen negative side effect is that for almost 12 months the Company was not able to communicate the resettlement plans directly to the village. This in turn created uncertainty and understandable concern among the people to be relocated and led to some protests in the village against the Company. In mid-August, the Presidency signalled to the Company that the Company should reach an agreement over resettlement directly with the village. This represents a change in policy, as the Company can now communicate directly with the

village regarding resettlement. The Company will therefore discuss details of the RAP with the community, which will include, proposed resettlement locations, type and size of house and garden and the compensation matrix. It is hoped this will go a long way to removing concerns about the resettlement and establish the fact that Condor will act in a professional manner over resettlement. A top resettlement expert consultancy has been engaged.

Condor has been working on a land acquisition programme for over three years and plans to acquire approximately 800 hectares of rural land for the production scenario in the PFS. A few months ago a property lawyer joined the team to strengthen the land acquisition team and assist with a clean up of the land titles, to ensure that all were registered and in good order. This makes providing title to new land and property easier, during the resettlement process. Two resettlement sites have been surveyed and valued.

IFC was a 7.3% shareholder in the Company at 30 June 2017. Condor is committed to complying with the IFC Performance Standards, which are an international benchmark for identifying and managing environmental and social risk. Condor has fulfilled the requirements of an Environmental Social Action Plan (ESAP), which was agreed with the IFC as part of their investment process.

The Company’s fulfilment of the ESAP items, in line with IFC’s expectations, is establishing the basis for sustainability of a future mine at the La India Project. Implementation of the IFC Performance Standards help Condor manage and improve its environmental and social performance through an outcomes-based approach and also provides a solid base from which the Company may enhance the sustainability of its business operations and provides benefits for all shareholders.

Turning to the financial results for the six months to 30 June 2017, the operating loss for the six month period was GBP3,345,479. Gross proceeds of GBP5.242 M raised during the period. The cash equivalents at 30 June 2017 were GBP3,168,265. There are currently 61,365,380 ordinary shares in issue.

Shareholders will note that the interims include quarterly information for the first time as the Company is considering a secondary listing on the TSX or TSXv for which such information is required.

On 20 February 2017, the Company announced it had raised GBP5.242 M by way of a private placement of 8,454,733 new ordinary shares at a placement price of 62 pence. A half warrant, which is unlisted, was attached to each placement share. A total of 4,701,298 warrants were issued with an exercise price of 93 pence and a two year life. If exercised in full, the warrants would raise gross proceeds of GBP3.932 M.

Mark Child

Chairman and CEO

CONDOR GOLD PLC

REVIEW OF OPERATIONS AND PROJECT OVERVIEW

FOR THE SIX MONTHS TO 30 JUNE 2017

LA INDIA PROJECT

Following completion of the PFS and PEAs on 21 December 2014, the Company’s focus shifted to permitting the base case 2,800 tpd processing plant with capacity to produce 100,000 oz gold per annum and demonstrating that La India Project hosts a district scale gold deposit, while minimising environmental and social risks. Following a successful financing in April 2016 and March 2017, Condor re-commenced a soil geochemistry programme covering the entire 313 km(2) on La India Project. The soil geochemistry survey was completed during the period. During the first half 423.6 m of scout drilling was completed on the Tatescame prospect and 945.2 m on the Andrea prospect in the El Rodeo concession. Furthermore, 5922.30 m of resource expansion drilling was completed in the on the Mestiza Vein Set.

Exploration Activity

Condor has a dual exploration strategy of proving a major Gold District of 4 M oz to 5 M oz gold within the 313 km(2) La India Project and expanding the resources within the three main vein sets of La India, America and Mestiza from 2.1 Moz gold to 3 Moz gold. The geological team has developed a multi-disciplined approach utilising geological mapping, a soil geochemistry survey, a helicopter-born geophysics survey and continued updating of the structural geological model to generate exploration targets and prove a major Gold District. The exploration targets are followed up with trenching and scout drilling. It is estimated that approximately 20,000 m drilling is required to expand the resource within the 3 main vein sets from 2.1 Moz gold to 3 Moz gold.

Scout drilling commenced in November 2016 and continued during January and February 2017 with two drill holes for 423.6 m in Tatascame and six drill holes for 945.2 m at the Andrea vein. A total of 17 holes for 2,757.40 m were drilled at Cacao, Real de la Cruz, Tatascame and El Rodeo concessions as part of the overall scout drilling programme.

Previous drilling in 2016, with a total of 720 m of drilling at the Cacao vein, demonstrated a significant dilational vein, below near surface phreatic breccia and sinter. Drill intercepts included 7.85 m at 3.75 g/t, and 7.85 m at 2.95 g/t gold.

CONDOR GOLD PLC

REVIEW OF OPERATIONS AND PROJECT OVERVIEW

FOR THE SIX MONTHS TO 30 JUNE 2017

Link to Figure 1. Cacao long section with prior and current results.

http://www.rns-pdf.londonstockexchange.com/rns/3598R_-2017-9-20.pdf

The drill rig also completed 429 m at Real De la Cruz and 664 m drilling at Tatascame. Drill results from Real de la Cruz demonstrated poor continuity of the high-grade veins, though it may still have bulk mineable potential. The drilling at Tatascame gave poor results and it has been downgraded. It effectively demonstrated that the known vein, with grades up to at least 10 g/t gold, terminates towards the West.

The six relatively shallow holes on the Andrea vein encountered abundant zeolite veinlets, minerals typical of the upper parts of epithermal systems (above the boiling zone). The northern holes hit barren quartz/carbonate veins, but the deepest, and southernmost, hole encountered significant gold mineralisation, with 5.1 m at 1.9 g/t gold. This began at 186 m depth. Drilling at Andrea was suspended because of the lack of water required for drilling. Future drilling is planned to follow up on these encouraging results and will probably recommence in the wet season, expected to be in around six months’ time. It will target the southern portion and be deeper.

Drilling commenced at Mestiza to test and convert an historic Soviet mineral resource (2,392 kt at 10.2 g/t gold for 785,694 oz gold) to Canadian NI 43-101 standard. The initial focus was on the Tatiana Vein, one of the four constituent veins and the largest portion of the resource. As of mid-August, a total of 44 drill holes for 5,922.30 m have been drilled along the Tatiana and Buenos Aires veins.

CONDOR GOLD PLC

REVIEW OF OPERATIONS AND PROJECT OVERVIEW

FOR THE SIX MONTHS TO 30 JUNE 2017

Link to Figure 2. Tatiana vein long section indicating the location of a high-grade zone within the ‘Big Bend’.

http://www.rns-pdf.londonstockexchange.com/rns/3598R_-2017-9-20.pdf

Results are encouraging and have identified a high-grade ore shoot in a major dilational bend (Figures 2 and 3). High recoveries have been achieved in the mineralised zone, including mineralised fault breccias that previous drilling failed to recover.

Link to Figure 3. Tatiana vein Cross Section showing recent drill results in a High Grade Ore Shoot.

http://www.rns-pdf.londonstockexchange.com/rns/3598R_-2017-9-20.pdf

CONDOR GOLD PLC

REVIEW OF OPERATIONS AND PROJECT OVERVIEW

FOR THE SIX MONTHS TO 30 JUNE 2017

During the reporting period 126 rock chip samples were obtained from different localities (Figure 4), the majority coming from La Cuchilla, Tierra Blanca, El Rodeo, La Mojarra, Cacao and Santa Barbara concessions and a few samples from La India concession.

A point of interest, is a 3.1 g/t gold sample obtained from a stockwork of druzy quartz veinlets in the far northwest sector of the La Cuchilla concession (figure 4). Most of the samples obtained during soil sampling at La Cuchilla concession have <1 g/t gold but fall in a corridor that seems to extend towards the main La India corridor to the southeast.

Several >1 g/t gold rock chips were collected from a possible southeast extension of the Andrea vein, amongst which a 23.8 g/t gold sample stands out and was obtained from a 0.5 m quartz breccia vein inside a recent artisanal excavation.

In the Santa Barbara concession, along a possible extension of the Cacao vein to the east, a 11.6 g/t gold sample was collected from a 1.4 m wide vein zone with fine disseminated pyrite in an active artisanal excavation.

Link to Figure 4 . Rock chip samples for the period January-June 2017.

http://www.rns-pdf.londonstockexchange.com/rns/3598R_-2017-9-20.pdf

Soil sampling of the entire La India Project was completed with a total of 7,997 samples collected since June 2016, out of which 6,685 samples were sent for assaying covering an area of approximately of 242 m(2) (Figure 4). The overall total number of samples collected during 2015-2017 in the entire La India project concession package of 313 km(2) is 13,114.

CONDOR GOLD PLC

REVIEW OF OPERATIONS AND PROJECT OVERVIEW

FOR THE SIX MONTHS TO 30 JUNE 2017

Link to Figure 5. Final results Au for district wide soil sampling.

http://www.rns-pdf.londonstockexchange.com/rns/3598R_-2017-9-20.pdf

Several elements, in particular gold, tellurium, titanium, arsenic, silver and antimony, define two significant trends. These are interpreted as two major basement feeder zones; La India and Andrea Corridors (Figure 6). There is a suggestion that some rich veins (Tatascame, Los Limones, the veins at Andrea with visible gold) are en-echelon structures, at high angle to the Andrea Corridor. They may have provided localised dilations for fluids to rise.

The two corridors seem to converge west of Los Limones as broad anomalies (particularly tellurium), suggesting this area is also a target for future exploration. However, the target may be a concealed vein since gold and silver anomalies are not developed. The vein at Los Limones may be an example of a mostly concealed target: the surface rocks here comprise lapilli tuffs and mudstones, poor for brittle fracture.

Link to Figure 6. Interpreted major basement feeder zones from soil geochemisty results.

http://www.rns-pdf.londonstockexchange.com/rns/3598R_-2017-9-20.pdf

CONDOR GOLD PLC

REVIEW OF OPERATIONS AND PROJECT OVERVIEW

FOR THE SIX MONTHS TO 30 JUNE 2017

Geology mapping and vein interpretation was bolstered with the incorporation of Don Allen and Miguel Ponce into the geological team. Don Allen (MSc Geological Engineering and Economic Geology) has over 30 years of experience in gold/copper exploration in mapping sedimentary and igneous terrains in Canada, the United States, Ecuador and Bolivia. Miguel Ponce (MSc in Ore Deposits, Geochemistry and Petrology, University of Geneva), an Ecuadorian geologist has considerable experience in various types of deposits, including: precious metals LS – IS – HS epithermal deposits, copper-gold Porphyry systems, VHMS “Kuroko-type”, Manto-type copper deposits, iron-skarn and geothermal exploration projects in Ecuador, Colombia, Mexico, Panama, Peru and Argentina.

Link to Figure 7. Cacao vein mapping.

http://www.rns-pdf.londonstockexchange.com/rns/3598R_-2017-9-20.pdf

Detailed mapping of the litho-stratigraphy and vein characteristion was carried out at the Cacao vein (Figure 7), Andrea vein, Mestiza veins and Santa Barbara prospect with the objective of identifying possible extensions of this systems that would ultimately produce additional drilling targets.

Carlos Pullinger

Senior Geologist

CONDOR GOLD PLC

REVIEW OF OPERATIONS AND PROJECT OVERVIEW

FOR THE SIX MONTHS TO 30 JUNE 2017

Environmental Work

Implementation of the Environmental and Social Management System as required by the IFC Performance Standards has included the implementation of programmes and procedures in the areas of Environment, Social and Community, Health and Safety, Human Resources and Administration. Condor also attended the IFC Sustainability Exchange this year in Cartagena, Colombia; while the IFC conducted a site visit to La India Project in June.

During the period, Condor continued exploration activities on its El Rodeo, Real de la Cruz, La India and Espinito-Mendoza concessions. Condor successfully applied for a temporary water permit from MARENA on the El Rodeo concession to use water for the drilling campaign. Also, in El Rodeo, a special permit for drilling was submitted in another area called Los Limones, which was inspected and is under review by MARENA.

Condor presented to MARENA and INAFOR (The Forestry Institute “INAFOR”) the updated Reforestation Plan for the Real de la Cruz concession, which was approved and is to be implemented in 2017-2018. Condor received a certificate in recognition of its work and commitment to the National Reforestation Campaign and promotion of the protection of the environment from INAFOR.

In March 2017, Condor submitted to MARENA and other government institutions further information regarding the Resettlement Plan, which was included in the EIA.

Condor continues monitoring surface water flow at five sites and groundwater level at 25 sites as part of its hydrology and hydrogeology baseline studies.

Social work

Condor continues working with La India village to improve social engagement and explain the economic and social benefits of the Project. Condor has hired a sociologist with experience in resettlement processes in mining projects in Latin America. Furthermore, to strengthen the social team, Condor hired five social technicians with experience in social engagement, communication and resettlement processes; four people from the village were also hired to join the social team. The social team currently totals 12 employees who have been implementing social projects and working house-to-house to approach the villagers and clarify their concerns and doubts about resettlement.

Condor opened a new and larger information office in La India village, organised public activities to inform the community about exploration, and implemented a Grievance Mechanism for stakeholders.

The social and environmental team also implemented a Participatory Water Monitoring Programme. Condor supplies drinking water to over 200 houses in the village of La India to supplement the current supply, which is estimated at 30 minutes within a 48 hour period. Condor held a number of workshops in the community to discuss the scheme.

Condor has promoted an open dialogue and meetings with stakeholders to inform them about the economic and social benefits of the La India Project and has been working with a group of villagers who decided to form a pro-mining group in order to obtain more information about the Project.

Condor continues to support the training programme for villagers, which aims to ultimately train some 320 people for future jobs at the mine. A sports programme has been initiated to increase youth engagement, promote a healthy lifestyle and encourage social interaction.

The social team has been involved in working and negotiating with landowners to gain access to their land to ensure exploration activities can proceed. This has involved meetings with landowners or landholders, signing agreements and constant communication throughout the process.

CONDOR GOLD PLC

REVIEW OF OPERATIONS AND PROJECT OVERVIEW

FOR THE SIX MONTHS TO 30 JUNE 2017

Land Acquisition

Condor has continued its land acquisition process. Approximately 800 hectares of land has to be purchased for the mine site infrastructure and in addition, a village resettlement site has to be acquired. This involves maintaining close communication with landowners to address their concerns and explain the land acquisition process. Negotiations for options to buy the land have continued, resulting in new contracts and addenda being signed.

The regularisation and provision of correct land titles has continued, with inspections on 20 properties by the State Attorney’s Office (PGR) and Intendancy for Property. Condor has provided the appropriate documents and awaits the clean land titles for those properties.

Condor hired a property lawyer to work in the Land Acquisition team in July 2017. The new lawyer had been working through PRONicaragua with Condor for more than a year and is very familiar with the challenges and tasks involved in securing clean property title.

Condor conducted a survey of with the villagers regarding five potential resettlement sites, asking the villagers as to their preferred sites, these have been surveyed by the Company’s land acquisition team.

Irene Chow

Head of Environmental and Social Department