Condor Gold plc Announces Additional Metallurgical Test Results on La India and Satellite Deposits

LONDON, November 25, 2019 - Condor Gold (AIM:CNR)(TSX:COG) is pleased to announce that it has received the final results of metallurgical tests on La India, Mestiza and America deposits from SGS Laboratories, Lakefield, Ontario.

Highlights

Condor Gold has been actively pursuing the addition of the open-pit portions of the America and Mestiza deposits (the Satellite Pits) to the existing planned and permitted production from the La India Pit and has submitted Environmental and Social Impact Assessments applying for the Environmental Permit to develop and extract gold from the Satellite Pits (See RNS dated 22 November 2019).

During August of 2019, Condor assembled six new master composites from La India, America and Mestiza deposits for grindability and leaching tests. Additionally, four variability composites from La India were selected to refine the understanding of the power consumption and abrasion characteristics of the La India ores. This work was conducted by SGS Mineral Services (SGS) in Lakefield, Ontario.

In summary, the results were:

• The new SGS results corroborate the initial findings on the abrasion, ball mill and SAG mill work indices as presented in the 2014 prefeasibility study (PFS) that was conducted by Inspectorate (subsequently acquired by Bureau Veritas). The SGS results, while slightly different than the 2014 PFS values, are within the same statistical range.
• Gold extraction from the La India samples confirm the results of the PFS study, demonstrating that the estimated average gold recovery of 91% from the PFS remain valid for the La India deposit.
• Gold extraction from the America and Mestiza samples are similarly comparable to the original metallurgical results, and clearly show that the satellite pits will be amenable to treatment through the proposed CIL or CIP flowsheet.
• The Abrasion / SAG mill / Bond ball mill work indices suggest that the open pit ores from America and Mestiza, while still hard, are not as hard or as abrasive as the La India ores.

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

"The additional metallurgical tests include grinding and abrasion studies for the America and Mestiza satellite pits that were not included in the metallurgical tests which formed part of the PFS on La India open pit. The studies are essential as we finalise the size of the processing plant ahead of a construction decision. Both satellite pit ores are less abrasive than the La India ore, which could be reflected in lower costs for wear materials when processing these ores.

The most recent iteration of metallurgical studies represents the latest of Condor's efforts to expand the district-wide potential of our concession package, while further de-risking the Project. The consistent amenability of the district ores to the planned CIP processing plant lends further evidence that the Project can achieve higher throughput for a longer period of time than has been considered in our previous studies."

Discussion - Grinding Studies

The 2019 studies were conducted both as verification of the 2014 La India studies and to expand the understanding of the grinding characteristics of the satellite deposits at America and Mestiza. Table 1 provides a summary of the grinding and abrasion studies, along with a comparison to the 2014 PFS results:

Table 1: Summary of Grindability and Abrasion test results

Note that the original study was conducted by Inspectorate Laboratories in Vancouver, which has been acquired by Bureau Veritas.

Examination of the La India composites between 2014 and 2019 reveal results that are remarkably similar when considering a difference of five years and the use of two different laboratories. In both cases, the ore is shown to be very hard, with a Bond ball mill work index (BWi) of 20 to 25 kWhr per tonne, and abrasion indices of 1.04 to 1.13. These values are considered to be very high relative to most projects. The abrasion index is an indication of wear material consumption, which is expected to be high for the La India project. It is noted that the process operating costs presented in the 2014 PFS considered these high abrasion values and corresponding high consumption of process wear materials.

The La India deposit SAG mill indices (A x b) range from 33.8 to 51.2 for the La India deposit (higher numbers indicate more favourable characteristics in this index). These test results serve to validate the underlying milling assumptions for the La India deposit that were presented in the 2014 PFS.

Grinding and abrasion studies were not conducted on the America and Mestiza satellite deposits in 2014, however, the currently reported results indicate that both the America and Mestiza ores are less abrasive than the La India ore, which could be reflected in lower costs for wear materials when processing these ores.

Discussion - Leaching Studies

Gold leaching tests were conducted on each of the 2019 test composites using the optimal process conditions that were established during the 2014 PFS metallurgical program. Table 2 provides a summary of the leach test results that were obtained during the 2019 and 2014 test programs.

Table 2: Summary of Leach Test Results for 2019 and 2014 Test Programs

As with the grinding and abrasion studies, the 2019 leaching test results are not materially different than those presented in the 2014 PFS. Both indicate that 90% or better gold recovery is supportable for the La India deposit. Silver remains a relatively minor contributor to the value of the project, at approximately 1% of the dollar value of total sales.

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

About Condor Gold plc:

Condor Gold plc was admitted to AIM in May 2006 and dual listed on the TSX in January 2018. The Company is a gold exploration and development company with a focus on Nicaragua.

In August 2018, the Company announced that the Ministry of the Environment in Nicaragua had granted the Company the Environmental Permit ("EP") for the development, construction and operation of a processing plant with capacity to process up to 2,800 tonnes per day at its wholly-owned La India gold project ("La India Project"). The EP is considered to be the master permit for mining operations in Nicaragua. Condor Gold published a PFS on La India Project in December 2014, as summarised in the Technical Report (as defined below). The PFS details an open pit gold Mineral Reserve in the Probable category of 6.9 Mt at 3.0 g/t gold for 675,000 oz gold, producing 80,000 oz gold per annum for seven years. La India Project contains a Mineral Resource of 9,850Kt at 3.6 g/t gold for 1,140Koz gold in the Indicated category and 8,479Kt at 4.3g/t gold for 1,179Koz gold in the Inferred category. The Indicated Mineral Resource is inclusive of the Mineral Reserve.

Disclaimer

Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

Qualified Persons

The technical review of the SGS metallurgical results has been conducted by Eric Olin, a principal consultant with SRK Consulting (U.S. Inc., who is a registered member of SME and a "qualified person" as defined by NI 43-101. Mr. Olin has over 40 years' experience in extractive metallurgy including extensive experience with CIP and CIL gold extraction plants. Eric Olin is a full time employee of SRK Consulting (U.S.) Inc., an independent consultancy, and has sufficient experience which is relevant to the style of mineralization and type of deposit under consideration. Eric Olin consents to the inclusion in the announcement of the matters based on their information in the form and context in which is appears and confirms that this information is accurate and not false or misleading.

The technical and scientific information in this press release has been reviewed, verified and approved by Gerald D. Crawford, P.E. who is a "qualified person" as defined by NI 43-101.

Technical Information

Certain disclosure contained in this news release of a scientific or technical nature has been summarised or extracted from the technical report entitled "Technical Report on the La India Gold Project, Nicaragua, December 2014," dated November 13, 2017 with an effective date of December 21, 2014 (the "Technical Report"), prepared in accordance with NI 43-101. The Technical Report was prepared by or under the supervision of Tim Lucks, Principal Consultant (Geology & Project Management), Gabor Bacsfalusi, Principal Consultant (Mining), Benjamin Parsons, Principal Consultant (Resource Geology), each of SRK Consulting (UK) Limited, and Neil Lincoln of Lycopodium Minerals Canada Ltd., each of whom is an independent "qualified person" as defined by NI 43-101.

Forward Looking Statements

All statements in this press release, other than statements of historical fact, are ‘forward-looking information' with respect to the Company within the meaning of applicable securities laws, including statements with respect to: the Mineral Resources, Mineral Reserves and future production rates and plans at the La India Project. Forward-looking information is often, but not always, identified by the use of words such as: "seek," "anticipate," "plan," "continue," "strategies," "estimate," "expect," "project," "predict," "potential," "targeting," "intends," "believe," "potential," "could," "might," "will" and similar expressions. Forward-looking information is not a guarantee of future performance and is based upon a number of estimates and assumptions of management at the date the statements are made including, among others, assumptions regarding: future commodity prices and royalty regimes; availability of skilled labour; timing and amount of capital expenditures; future currency exchange and interest rates; the impact of increasing competition; general conditions in economic and financial markets; availability of drilling and related equipment; effects of regulation by governmental agencies; the receipt of required permits; royalty rates; future tax rates; future operating costs; availability of future sources of funding; ability to obtain financing and assumptions underlying estimates related to adjusted funds from operations. Many assumptions are based on factors and events that are not within the control of the Company and there is no assurance they will prove to be correct.

Such forward-looking information involves known and unknown risks, which may cause the actual results to be materially different from any future results expressed or implied by such forward-looking information, including, risks related to: mineral exploration, development and operating risks; estimation of mineralisation, resources and reserves; environmental, health and safety regulations of the resource industry; competitive conditions; operational risks; liquidity and financing risks; funding risk; exploration costs; uninsurable risks; conflicts of interest; risks of operating in Nicaragua; government policy changes; ownership risks; permitting and licencing risks; artisanal miners and community relations; difficulty in enforcement of judgments; market conditions; stress in the global economy; current global financial condition; exchange rate and currency risks; commodity prices; reliance on key personnel; dilution risk; payment of dividends; as well as those factors discussed under the heading "Risk Factors" in the Company's annual information form for the fiscal year ended December 31, 2018 dated March 22, 2019, available under the Company's SEDAR profile at www.sedar.com.

Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. The Company disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise unless required by law.

Technical Glossary

Abrasion Index

The Bond Abrasion Test determines the Abrasion Index, which is used to determine steel media and liner wear in crushers, rod mills, and ball mills. Bond developed correlations based on the wear rate in pounds of metal wear/kWh of energy used in the comminution process. Higher values indicate more abrasive rock.

Ball Mill Work Index - BMWi

The Bond Ball Mill Work Index is a measure of the resistance of the material to grinding in a ball mill. It can be used to determine the grinding power required for a given throughput of material under ball mill grinding conditions. It is a 'locked cycle' test conducted in closed circuit with a laboratory screen. Its units are expressed as kWhr/tonne.

Carbon-in-Pulp (CIP) or Carbon in Leach (CIL)

A metallurgical process for extracting gold by leaching gold from the pulverized host rock with a cyanide solution. Gold is subsequently adsorbed onto activated charcoal for later recovery.

Mineral Resource

Mineral Resources are sub-divided, in order of increasing geological confidence, into Inferred, Indicated and Measured categories. An Inferred Mineral Resource has a lower level of confidence than that applied to an Indicated Mineral Resource. An Indicated Mineral Resource has a higher level of confidence than an Inferred Mineral Resource but has a lower level of confidence than a Measured Mineral Resource.

A Mineral Resource is a concentration or occurrence of solid material of economic interest in or on the Earth's crust in such form, grade or quality and quantity that there are reasonable prospects for eventual economic extraction.

The location, quantity, grade or quality, continuity and other geological characteristics of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge, including sampling.

Material of economic interest refers to diamonds, natural solid inorganic material, or natural solid fossilized organic material including base and precious metals, coal, and industrial minerals.

The term Mineral Resource covers mineralization and natural material of intrinsic economic interest which has been identified and estimated through exploration and sampling and within which Mineral Reserves may subsequently be defined by the consideration and application of Modifying Factors. The phrase ‘reasonable prospects for eventual economic extraction' implies a judgment by the Qualified Person in respect of the technical and economic factors likely to influence the prospect of economic extraction. The Qualified Person should consider and clearly state the basis for determining that the material has reasonable prospects for eventual economic extraction. Assumptions should include estimates of cutoff grade and geological continuity at the selected cut-off, metallurgical recovery, smelter payments, commodity price or product value, mining and processing method and mining, processing and general and administrative costs. The Qualified Person should state if the assessment is based on any direct evidence and testing.

Interpretation of the word ‘eventual' in this context may vary depending on the commodity or mineral involved. For example, for some coal, iron, potash deposits and other bulk minerals or commodities, it may be reasonable to envisage ‘eventual economic extraction' as covering time periods in excess of 50 years. However, for many gold deposits, application of the concept would normally be restricted to perhaps 10 to 15 years, and frequently to much shorter periods of time.

Inferred Mineral Resource

An Inferred Mineral Resource is that part of a Mineral Resource for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. Geological evidence is sufficient to imply but not verify geological and grade or quality continuity.

An Inferred Mineral Resource has a lower level of confidence than that applying to an Indicated Mineral Resource and must not be converted to a Mineral Reserve. It is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration.

An Inferred Mineral Resource is based on limited information and sampling gathered through appropriate sampling techniques from locations such as outcrops, trenches, pits, workings and drill holes. Inferred Mineral Resources must not be included in the economic analysis, production schedules, or estimated mine life in publicly disclosed Pre- Feasibility or Feasibility Studies, or in the Life of Mine plans and cash flow models of developed mines. Inferred Mineral Resources can only be used in economic studies as provided under NI 43-101.

There may be circumstances, where appropriate sampling, testing, and other measurements are sufficient to demonstrate data integrity, geological and grade/quality continuity of a Measured or Indicated Mineral Resource, however, quality assurance and quality control, or other information may not meet all industry norms for the disclosure of an Indicated or Measured Mineral Resource. Under these circumstances, it may be reasonable for the Qualified Person to report an Inferred Mineral Resource if the Qualified Person has taken steps to verify the information meets the requirements of an Inferred Mineral Resource.

Indicated Mineral Resource

An Indicated Mineral Resource is that part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics are estimated with sufficient confidence to allow the application of Modifying Factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit.

Geological evidence is derived from adequately detailed and reliable exploration, sampling and testing and is sufficient to assume geological and grade or quality continuity between points of observation.

An Indicated Mineral Resource has a lower level of confidence than that applying to a Measured Mineral Resource and may only be converted to a Probable Mineral Reserve.

Mineralization may be classified as an Indicated Mineral Resource by the Qualified Person when the nature, quality, quantity and distribution of data are such as to allow confident interpretation of the geological framework and to reasonably assume the continuity of mineralization. The Qualified Person must recognize the importance of the Indicated Mineral Resource category to the advancement of the feasibility of the project. An Indicated Mineral Resource estimate is of sufficient quality to support a Pre-Feasibility Study which can serve as the basis for major development decisions.

Mineral Reserve

Mineral Reserves are sub-divided in order of increasing confidence into Probable Mineral Reserves and Proven Mineral Reserves. A Probable Mineral Reserve has a lower level of confidence than a Proven Mineral Reserve.

A Mineral Reserve is the economically mineable part of a Measured and/or Indicated Mineral Resource. It includes diluting materials and allowances for losses, which may occur when the material is mined or extracted and is defined by studies at Pre-Feasibility or Feasibility level as appropriate that include application of Modifying Factors. Such studies demonstrate that, at the time of reporting, extraction could reasonably be justified.

The reference point at which Mineral Reserves are defined, usually the point where the ore is delivered to the processing plant, must be stated. It is important that, in all situations where the reference point is different, such as for a saleable product, a clarifying statement is included to ensure that the reader is fully informed as to what is being reported.

The public disclosure of a Mineral Reserve must be demonstrated by a Pre-Feasibility Study or Feasibility Study.

Mineral Reserves are those parts of Mineral Resources which, after the application of all mining factors, result in an estimated tonnage and grade which, in the opinion of the Qualified Person(s) making the estimates, is the basis of an economically viable project after taking account of all relevant Modifying Factors. Mineral Reserves are inclusive of diluting material that will be mined in conjunction with the Mineral Reserves and delivered to the treatment plant or equivalent facility. The term ‘Mineral Reserve' need not necessarily signify that extraction facilities are in place or operative or that all governmental approvals have been received. It does signify that there are reasonable expectations of such approvals.

‘Reference point' refers to the mining or process point at which the Qualified Person prepares a Mineral Reserve. For example, most metal deposits disclose mineral reserves with a "mill feed" reference point. In these cases, reserves are reported as mined ore delivered to the plant and do not include reductions attributed to anticipated plant losses. In contrast, coal reserves have traditionally been reported as tonnes of "clean coal". In this coal example, reserves are reported as a "saleable product" reference point and include reductions for plant yield (recovery). The Qualified Person must clearly state the ‘reference point' used in the Mineral Reserve estimate.

Master Composite

A testing sample comprised of multiple sub-samples taken from multiple locations within an area of a deposit. This is a common practice when individual samples are of insufficient size for a minimum sample requirement for metallurgical tests. Source sub-samples are selected to represent specific mineralization types or specific areas within a deposit.

Probable Mineral Reserve

A Probable Mineral Reserve is the economically mineable part of an Indicated, and in some circumstances, a Measured Mineral Resource. The confidence in the Modifying Factors applying to a Probable Mineral Reserve is lower than that applying to a Proven Mineral Reserve.

The Qualified Person(s) may elect, to convert Measured Mineral Resources to Probable Mineral Reserves if the confidence in the Modifying Factors is lower than that applied to a Proven Mineral Reserve. Probable Mineral Reserve estimates must be demonstrated to be economic, at the time of reporting, by at least a Pre-Feasibility Study.

Pre-Feasibility Study (Preliminary Feasibility Study)

The CIM Definition Standards requires the completion of a Pre-Feasibility Study as the minimum prerequisite for the conversion of Mineral Resources to Mineral Reserves.

A Pre-Feasibility Study is a comprehensive study of a range of options for the technical and economic viability of a mineral project that has advanced to a stage where a preferred mining method, in the case of underground mining, or the pit configuration, in the case of an open pit, is established and an effective method of mineral processing is determined. It includes a financial analysis based on reasonable assumptions on the Modifying Factors and the evaluation of any other relevant factors which are sufficient for a Qualified Person, acting reasonably, to determine if all or part of the Mineral Resource may be converted to a Mineral Reserve at the time of reporting. A Pre-Feasibility Study is at a lower confidence level than a Feasibility Study.

Relative Density / Specific Gravity

The weight of a given volume of material expressed as a ratio of the density of water. A specific gravity of 2.50 would indicate that a cubic meter of the material would weigh 2.5 metric tonnes.

SAG Mill Work Index - Short for Semi-Autogenous Grinding - (A x b) - The SAG Mill Work Index is a measure of the resistance of material to grinding in a SAG mill. It can be used to determine the grinding power required for a given throughput of material under SAG mill grinding conditions.. The index has no units. Higher values indicate better performance through a SAG mill.

SOURCE: Condor Gold plc