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October 27, 2015

@CondorGoldPlc La India project sees ounces increase after Whittle optimisation study, hoping will tempt someone to make a bid

$CNR.L Whittle optimisation study works wonders at Condor Gold’s La India project

Within the trade, the benefits of the employing Whittle Consulting to enhance the economics of a planned mine have long been recognised.
Jeff Whittle founded his first mine optimisation business way back in 1984, sold it, and then developed another one along similar lines.
It’s all about using the proprietary Whittle optimisation software to enhance the economics of a mine by modelling pit design, scheduling and a host of other features.
But because the main customers tend to be the major mining companies, it’s not often that the full impact of a Whittle study can see the light of day.
Condor Gold (LON:CNR) is one recent exception, and Condor’s chief executive Mark Child is in no doubts about the improvements Whittle optimisation have made to Condor’s plans for the La India gold project in Nicaragua.
“The results have stunned us,” he says. “They are far better than we thought they would be.”
And on many levels too.
Condor’s original pre-feasibility and preliminary economic studies were prepared by SRK Consulting back in December 2014.
These studies outlined three potential development scenarios: a mining project solely focussed on an open pit at La India, a mining project centred on La India but incorporating satellite pits too, and a project incorporating both open pit and underground mines.
Whittle went to work on all of these scenarios, and the results are startling.
The basic open pit, which was originally modelled around 674,000 contained indicated ounces has now been upgraded to 866,000 ounces. Under the Whittle optimisation it will now produce an average of 91,000 ounces over the first five years of production, instead of the 76,000 ounces that was originally modelled.
That’s a production improvement of 20% per annum. over the first five years on a theoretical reserve basis. If a a small amount of inferred material and production is included it rises to 101,000 ounces from a single pit
But there’s more.
The production improvement for the combined open pit plus satellite operations adds up to an even better 25%, as contained ounces jump from 827,000 ounces to 1.06mln ounces, and average annual gold production over the first five years jumps from 94,000 ounces to 118,000 ounces.
For the open pit and underground combined operation the improvement is back at 20%, based on an increase in contained ounces from 1.3mln to 1.55mln and an increase in production over the first five years from an originally projected 138,000 ounces to a newly modelled 165,000 ounces per annum.
How has this all been achieved?
Ah, that would be telling, and the precise workings of Whittle’s software remains a closely guarded secret. They utilise 10 techniques across the mining value chain.
But the modelling is clear enough, the data is held by Condor, and the improvements are there to be made.
Whittle, explains Child, has simply taken ten existing studies and re-worked them with an unremitting focus on the economics.
Thus, under the Whittle modelling although recoveries may not be at their maximum potential, from a cost point of view varying the ratio of recoveries to grinding costs can make a lot of sense.
In the case of Condor’s project, there are several such examples.
“Whittle do their own pit planning and pit phasing,” says Child. “The pit shells have gone deeper. They’re now 30% bigger. Why? – because we’ve got an average 3 gram open pit material that increase in grade at depth. What was previously deemed high grade underground is now open pittable.”
But he emphasises that in spite of the increases in size and mooted output, several other key metrics remain the same.
“The capex is the same,” he says. “The opex is the same. The all-in sustaining cash cost is the same at under US$700 per ounce. An incremental 20% to 25% more gold production per annum goes straight through to the bottom line. The life of mine extends because there is 30% more contained gold. It’s all optimised to money and NPV.”
It is fairly obvious there have been material increases in the NPVs and IRRs, although Child doesn’t quote numbers.
All of which sets Condor up nicely for the ongoing sales process, which the company has initiated and is likely to take 4 to 6 months.
It’s not a given that the company will be sold, but Child has always emphasised that he and his team are not developers.
And having sent out teaser documents soliciting declarations of interest, the Takeover Panel has declared the company to be in an Offer Period.
So be it.
Child doesn’t deny that the company’s for sale.
Indeed, at this point in time a sale is the outright preference compared to some of the other potential scenarios under which La India might get built such as a joint venture or a potentially dilutive equity raise.
“Our focus is on selling the company,” he says. “But there are a number of potential outcomes. We always said we’d probably sell, but we’re not desperate to sell.”
Indeed, there’s money in the bank, and a renewed confidence in the quality of the asset following the Whittle study.
That speaks of a certain strength in depth, especially considering that a number of confidentiality agreements are already in place and a major shareholder has recently topped up its stake.
What happens over the course of the next few months is likely to be very interesting indeed.

Whittle optimisation study works wonders at Condor Gold’s La India project - Proactiveinvestors (UK)

October 26, 2015

#Mining and the new Liberal government in #Canada from The Northern Miner

What Miners Can Expect From a Liberal Government in Canada

Posted: 10/21/2015 2:17 pm EDT Updated: 10/21/2015 2:59 pm EDT

Editor-In-Chief, The Northern Miner

The stunning return of the Liberal Party of Canada to majority status in the federal election held October 19 surprised most people in Canada who had expected, at best, a surge to minority government from third place behind the ruling Conservative Party of Canada and the New Democratic Party of Canada.

Instead, Canadians woke up to a new political landscape, with voters having taken the middle ground by rebuking the worn-out, pro-big-business Tories, but not wanting to roll the dice on the more left-leaning, inexperienced NDP.

Shown the door were the two most recent ministers of natural resources -- Conservative Greg Rickford lost his seat in Kenora, Ont., to Liberal Bob Nault, who had a close race with the former provincial NDP leader Howard Hampton; and previous Minister of Natural Resources and current Finance Minister Joe Oliver lost his seat in Toronto. Nault was quick to give some credit for his victory to First Nations communities in the the Kenora region, who mobilized to support him.

Indeed, one theme of the election was the growing political strength shown by aboriginal communities in Canada, with a record 10 indigenous people elected as members of Parliament, up three from 2011, and with a shift to Liberal from Conservative and NDP.

What should miners expect from a Liberal government?

With regard to corporate taxes, the Liberals have pledged to keep them at current levels andretain the 15 per cent flow-through credit for mineral explorers. Most of the taxation changes will come at the personal level. For example, Canadians with taxable income between $44,700 and $89,400 will see their federal income tax rate fall to 20.5 per cent from 22 per cent, while those making more than $200,000 will see it rise to 33 per cent from 29 per cent. ‌

Perhaps the biggest change that mine developers will see with the new government is the Liberals' determination to reverse the Conservatives' streamlining of environmental approvals by skipping the federal approval process, if the project had already met environmental approvals at the provincial level.

The Conservatives saw the two-stage approval process as an expensive and time-consuming duplication of effort, while the Liberals and NDP saw it as necessary oversight, with the federal government not being subject to the more parochial political pressures sometimes applied to provincial regulators.

Another change miners might see is an improved relationship between the federal government and aboriginal communities in Canada, who need to be on-side for many resource development projects to proceed in remote parts of Canada. But it's hard to generalize on the topic, as relationships can vary from community to community across the country.

The new Liberal government has pledged to allow members of the federal civil service to speak out and attend conferences, in contrast to the much-resented muzzling of federal scientists and related bureaucrats under the Conservative regime. (Here at the Miner, in the early years of the Harper government, we'd repeatedly get federal scientists eagerly offering to write op-ed pieces or serve as expert interviewees, only to have them come back months later frustrated and embarrassed upon learning they were not permitted to talk to us. As the years passed, the emails and phone calls from federal scientists stopped completely.)

It's hard to say if the Liberals' pledge for a new round of massive spending on infrastructure will benefit miners (beyond aggregate miners), as most of the plan relates to public transit, social housing and green infrastructure.

Another development we might see is the retabling in a new form of the private member's bill by then-opposition Liberal MP John McKay (who was just re-elected) to strengthen federal government oversight of the corporate social responsibility activities of Canadian mining companies operating overseas.

In naming a cabinet, we strongly recommend that newly elected Liberal MP Maryann Mihychuk in Winnipeg be considered for Minister of Natural Resources. Mihychuk is a professional geoscientist and businesswoman who served with distinction as Manitoba's Mines Minister and Minister of Intergovernmental Affairs in the early 2000s. More recently she has been director of regulatory affairs for the Prospectors & Developers Association of Canada, as well as a consultant to mining firms such as Hudbay Minerals and Carlisle Goldfields, among her many mining endeavours.

Jim Grant:" #Gold is an investment in monetary disorder”, #HedgeFunds Are Getting Their Gold Bets Wrong @Business

Jim Grant, Grant's Interest Rate Observer 

Hedge Funds Are Getting Their Gold Bets Wrong - Bloomberg Business

-- The MasterFeeds

October 18, 2015

On the passing of Edward Flood, RIP, a friend of the #MasterMetals Blog

From Km. 88 in Venezuela to Oyu Tolgoi in Mongolia, passing through Canada's Voisey's Bay, Ed was present at every major mineral find in the last 20+ years. His recent debilitating illness took nothing away from his great humor and the distinguished person that he was. He was taken away from us all too soon. He will be dearly missed. Our sincere condolences go out to his family.  

MasterMetals (@MasterMetals)
Great comment from @thomcalandra on the passing of our dear friend #EdFlood, mining entrepreneur, you will be missed…

October 17, 2015

Now that #Gold has broken through its 200 day MA, will it Soar? Or is it Just Another False Start?

Gold: Off to the Races, or Just Another False Start? (Chart)

Gold: Off to the Races, or Just Another False Start? [Chart]

Gold: Off to the Races, or Just Another False Start? 

The Visual Capitalist 

The Chart of the Week is a weekly Visual Capitalist feature on Fridays.

Commodity traders know that gold is highly cyclical, and that it takes significant changes in the fundamentals and sentiment to change the long-term price trend. That said, the latest news on gold is cautiously optimistic for those waiting for a rebound in the precious metal. Over the last few days, gold has broken through its 200-day moving average to reach its highest price in three months at just short of $1,200 per oz.

This type of technical breakthrough is rare: over the last six years, gold has touched its 200-day moving average on the upswing six different times. Each time gold emerged from these technical circumstances, the downward momentum of the gold price would remain unaffected.

The most recent breakthrough was in early 2015, but gold subsequently fell back through its moving average to finish off -14% lower than it started six months earlier. In 2012 and 2014, similar technical breakthroughs also occurred, ending in similar bearish fates.

The subsequent trading was particularly nasty in 2012. After the technical event happened that year, the gold price continued to fall over the course of 16 months by a whopping -28%.

That said, crossing the 200-day moving average is still regarded as an important technical event to traders. If you need proof, look back to gold's largest run in recent memory, which occurred in the aftermath of the Financial Crisis. Gold crossed its 200-day moving average while it was worth a measly $860/oz and soared 124% in value over the next 32 months. It would reach roughly $1,900 per oz, its highest price (in absolute terms) of all time.

So will crossing the 200-day moving average mean anything this time around? It's impossible to say, but there is certainly no shortage of other indicators that may suggest that it is time for investors to pile back into gold stocks.


October 7, 2015

Investors pile into Freeport on restructure hopes @MINING

Investors pile into Freeport on restructure hopes
McMoRan has been mining copper, silver and gold at Grasberg in remote
Indonesia since the 1970s. In terms of reserves, Grasberg is still the
richest deposit on the planet

Investors pile into Freeport on restructure hopes |

Frik Els | October 6, 2015

Copper and
gold giant Freeport-McMoRan (NYSE:FCX) was trading higher as much as
6.7% on Tuesday with already more than 28 million shares in the owner of
the iconic Grasberg exchanging hands by midday.

At the time of the oil and gas acquisitions in December 2012 Freeport was worth more than $30 billion
The Phoenix-based company announced on Tuesday that it's trimming its board and is reviewing its oil and gas business in a return to its roots as a copper-focused miner.

The announcement of "alternative courses" for the oil division which
could include an outright sale comes less than three years after Freeport acquired   Plains Exploration Production for $6.9bn and bought back for $3.4bn in cash McMoRan Exploration, a deep sea drilling company, which it spun off 18 years ago.

news comes not longer after it was revealed that activist investor Carl
Icahn has taken up a substantial stake in the business.

month Freeport, which vies with Chile's state-owned Codelco as the world
number copper miner in terms of output, became the first major copper
miner to announce its slashing capex and production to cope with the
depressed copper price.

That led to a huge surge in the stock
which after today's rally is worth $13.2 billion, but year to date
Freeport has been decimated with shares down by half.

At the time of the oil and gas investment in December 2012 Freeport was worth more than $30 billion.

Investors pile into Freeport on restructure hopes |