Interim Report and Accounts for the Three and Six Months Ended 30 June 2020




  • In Business
  • 2020-08-14 06:30:00Z
  • By ACCESSWIRE
Interim Report and Accounts for the Three and Six Months Ended 30 June 2020
Interim Report and Accounts for the Three and Six Months Ended 30 June 2020  

LONDON, UK / ACCESSWIRE / August 14, 2020 / Condor Gold plc ("Condor Gold", "Condor", the "Group" or the "Company"), (AIM:CNR)(TSX:COG) presents its unaudited interim financial report together with Management's Discussion and Analysis for the three- and six-month periods to 30 June 2020. Both of the above have been posted on the Company's website www.condorgold.com and are also available on SEDAR at www.sedar.com.

Highlights for three and six months to 30 June 2020

On January 10, 2020, the Company announced the appointment of SP Angel Corporate Finance LLP as broker to the Company.

The Company provided an update on January 28, 2020 on permitting for the La India Project. This included an extension granted until 27 July 2021 to complete the conditions of the key La India Environmental Permit.

On February 28, 2020, the Company held Public Consultations in the local community as part of the environmental permitting process for the development and extraction of gold from the Mestiza and America open pits.

On March 4, 2020, the Company announced a high-grade open pit mining scenario of total diluted mill feed of 1,637 thousand tonnes ("Kt") at a 4.65g/t gold diluted head grade containing 245,000 oz gold from 3 open pits while leaving the bulk of the La India open pit intact.

The award of the environmental permit for the Mestiza open pit was announced by the Company on April 29, 2020. The Mestiza open pit hosts 92Kt at a grade of 12.1g/t gold (36,000oz contained gold) in the Indicated Mineral Resource category and 341Kt at a grade of 7.7g/t gold (85,000oz contained gold) in the Inferred Mineral Resource category. The Mestiza open pit is situated less than 4 kilometres from the location of the permitted processing plant for the La India open pit.

The award of the environmental permit for the America open pit was announced by the Company on May 6, 2020. The America open pit hosts 114Kt at a grade of 8.1 g/t gold (30,000 oz contained gold) in the Indicated Mineral Resource category and 677Kt at a grade of 3.1 g/t gold (67,000 oz contained gold) in the Inferred Mineral Resource category. The America open pit compliments the already permitted La India and Mestiza open pits.

Following the permitting of the Mestiza and America open pits, together with the La India open pit Condor has 1.12M oz gold open pit Mineral Resources permitted for extraction (8,583Kt at 3.3g/t gold for 903,000 oz gold in the Indicated category and 1,901Kt at 3.6g/t gold for 220,000 oz gold in the Inferred category), inclusive of a Mineral Reserve of 6.9Mt at 3.0g/t gold for 675,000 oz gold.

On May 28, 2020 the Company announced a placing of 18,082,192 units, comprising an equivalent number of ordinary shares at a price of 36.5p per share, and 9,041,090 warrants with an exercise price of 40p, to raise in aggregate gross proceeds of £6,600,000 before expenses.

On May 29, 2020 the Company announced that pursuant to receipt of notices for the exercise of warrants, it issued 2,984,986 new, ordinary shares with a nominal value of 20p each in the capital of the Company, comprising 312,499 at a subscription price of 31p per and 2,672,487 at a subscription price of 25p for which the Company received gross proceeds of £764,997 in total.

On June 1 the Company announced that pursuant to receipt of notices for the exercise of warrants with an exercise price of 25p per warrant, it issued 817,927 new, ordinary shares with a nominal value of 20p each in the capital of the Company. The Company received gross proceeds of £204,482.

Post Period Highlights

On July 10, 2020 the Company announced the purchase by Jim Mellon, a Director, of 400,000 ordinary shares in the Company at a price of 38p per ordinary share.

On August 13, 2020 the Company announed that it had made significant progress in de-risking La India project through purchase of land in and around the permitted La India open pit mine site area and provided an update on key elements in advancing the project:

Acquired 85% of the land within the permitted La India open pit mine site infrastructure, including the key areas of the location of the processing plant, tailings storage facility, open pit, waste dump area, explosive magazine.

Tailings Storage Facility and 2 water retention ponds are being fully designed by Tierra Group Inc. - 40% of the engineering designs are completed.

The design of the site wide water balance including a surface water management plan is underway and has been awarded to SRK Consulting (UK) Ltd.

Preliminary designs for the layout of the mine site infrastructure including, in some detail, the designs for the location of the processing plant have been completed.

Mine and waste dump schedules for a number of mining scenarios have been completed

The power studies have been progressed and several meetings held with the Ministry of Energy and Mines

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

"Condor currently has 1.12M oz gold open pit Mineral Resources permitted for extraction (8,583Kt at 3.3g/t gold for 903,000 oz gold in the Indicated category and 1,901Kt at 3.6g/t gold for 220,000 oz gold in the Inferred category) inclusive of a Mineral Reserve of 6.9Mt at 3.0g/t gold for 675,000 oz gold following the grant in May 2020 of Environmental Permits to extract gold from 2 high grade satellite feeder pits, which in aggregate have circa 232,000 oz gold at 5.5 g/t gold. The Company is targeting production of 120,000 oz gold per annum from open pit material for 7 years, which compares to the PFS of 79,300 oz gold p.a. for the same period. The significant underground Mineral Resource of 1.2M oz gold (1.27Mt at a grade of 5.8 g/t gold, for 238,000 oz gold in the Indicated category and 5.47Mt at a grade of 5.1 g/t gold, for 889,000 oz gold in the Inferred category)

will be analysed and potentially converted to Mineral Reserves after production from the open pits has started. Condor continues to de-risk the Project by fulfilling conditions of the Environmental Permit to construct and operate a new mine at La India by making significant progress with land acquisition, engineering and other technical studies. The objective remains to commence site preparation by end 2020."

Company number: 05587987

CONDOR GOLD PLC

Interim Report and Accounts

For the Three and Six Months Ended 30 June 2020

CONDOR GOLD PLC

CONTENTS OF THE INTERIM REPORT

FOR THE THREE AND SIX MONTHS TO 30 JUNE 2020

TABLE OF CONTENTS

Page

Highlights

5-6

Chairman's Statement

7-9

Review of Operations & Project Overview

10 - 17

Statement Regarding Forward Looking and Technical Information

19 - 21

Condensed Consolidated Statement of Comprehensive Income

22

Condensed Consolidated Statement of Financial Position

23

Condensed Consolidated Statement of Changes in Equity

24

Condensed Consolidated Cash Flow Statement

25

Notes to the Condensed Financial Statements

26 - 31

CONDOR GOLD PLC

HIGHLIGHTS

FOR THE THREE AND SIX MONTHS TO 30 JUNE 2020

Condor Gold plc ("Condor Gold", "Condor", the "Group" or the "Company"), (AIM: CNR; TSX: COG) presents its unaudited interim financial report together with Management's Discussion and Analysis for the three and six-month periods to 30 June 2020. Both of the above have been posted on the Company's website www.condorgold.com and are also available on SEDAR at www.sedar.com .

Highlights for three and six months to 30 June 2020

On January 10, 2020, the Company announced the appointment of SP Angel Corporate Finance LLP as broker to the Company.

The Company provided an update on January 28, 2020 on permitting for the La India Project. This included an extension granted until 27 July 2021 to complete the conditions of the key La India Environmental Permit.

On February 28, 2020, the Company held Public Consultations in the local community as part of the environmental permitting process for the development and extraction of gold from the Mestiza and America open pits.

On March 4, 2020, the Company announced a high-grade open pit mining scenario of total diluted mill feed of 1,637 thousand tonnes ("Kt") at a 4.65g/t gold diluted head grade containing 245,000 oz gold from 3 open pits while leaving the bulk of the La India open pit intact.

The award of the environmental permit for the Mestiza open pit was announced by the Company on April 29, 2020. The Mestiza open pit hosts 92Kt at a grade of 12.1g/t gold (36,000oz contained gold) in the Indicated Mineral Resource category and 341Kt at a grade of 7.7g/t gold (85,000oz contained gold) in the Inferred Mineral Resource category. The Mestiza open pit is situated less than 4 kilometres from the location of the permitted processing plant for the La India open pit.

The award of the environmental permit for the America open pit was announced by the Company on May 6, 2020. The America open pit hosts 114Kt at a grade of 8.1 g/t gold (30,000 oz contained gold) in the Indicated Mineral Resource category and 677Kt at a grade of 3.1 g/t gold (67,000 oz contained gold) in the Inferred Mineral Resource category. The America open pit compliments the already permitted La India and Mestiza open pits.

Following the permitting of the Mestiza and America open pits, together with the La India open pit Condor has 1.12M oz gold open pit Mineral Resources permitted for extraction (8,583Kt at 3.3g/t gold for 903,000 oz gold in the Indicated category and 1,901Kt at 3.6g/t gold for 220,000 oz gold in the Inferred category), inclusive of a Mineral Reserve of 6.9Mt at 3.0g/t gold for 675,000 oz gold.

On May 28, 2020 the Company announced a placing of 18,082,192 units, comprising an equivalent number of ordinary shares at a price of 36.5p per share, and 9,041,090 warrants with an exercise price of 40p, to raise in aggregate gross proceeds of £6,600,000 before expenses.

On May 29, 2020 the Company announced that pursuant to receipt of notices for the exercise of warrants, it issued 2,984,986 new, ordinary shares with a nominal value of 20p each in the capital of the Company, comprising 312,499 at a subscription price of 31p per and 2,672,487 at a subscription price of 25p for which the Company received gross proceeds of £764,997 in total.

On June 1 the Company announced that pursuant to receipt of notices for the exercise of warrants with an exercise price of 25p per warrant, it issued 817,927 new, ordinary shares with a nominal value of 20p each in the capital of the Company. The Company received gross proceeds of £204,482.

CONDOR GOLD PLC

HIGHLIGHTS

FOR THE THREE AND SIX MONTHS TO 30 JUNE 2020 (CONTD.)

Post Period Highlights

On July 10, 2020 the Company announced the purchase by Jim Mellon, a Director, of 400,000 ordinary shares in the Company at a price of 38p per ordinary share.

On August 13, 2020 the Company announced that it had made significant progress in de-risking La India project through purchase of land in and around the permitted La India open pit mine site area and provided an update on key elements in advancing the project:

Acquired 85% of the land within the permitted La India open pit mine site infrastructure, including the key areas of the location of the processing plant, tailings storage facility, open pit, waste dump area, explosive magazine.

Tailings Storage Facility and 2 water retention ponds are being fully designed by Tierra Group Inc. - 40% of the engineering designs are completed.

The design of the site wide water balance including a surface water management plan is underway and has been awarded to SRK Consulting (UK) Ltd.

Preliminary designs for the layout of the mine site infrastructure including, in some detail, the designs for the location of the processing plant have been completed.

Mine and waste dump schedules for a number of mining scenarios have been completed

The power studies have been progressed and several meetings held with the Ministry of Energy and Mines

CONDOR GOLD PLC

CHAIRMAN'S STATEMENT

FOR THE THREE AND SIX MONTHS TO 30 JUNE 2020

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 three and six months ended 30 June 2019. The Company's main focus during the first 6 months of 2020 has been two-fold. Firstly, on fulfilling the conditions of an Environmental Permit granted in August 2018 by the Ministry of the Environment and Natural Resources ("MARENA") for the development, construction and operation of a single open pit mine, a 2,800 tpd or 1.0 Mt per annum CIL processing plant and associated infrastructure at the La India Project, Nicaragua. The permitted La India open pit is estimated to produce between 80,000 oz to 100,000 oz gold per annum or a total of 600,000 oz gold over a 6 to 7-year period. Secondly, successfully holding two Public Consultations and being granted Environmental Permits to develop and extract ore from 2 high grade feeder pits, which provides additional mill feed to the already permitted processing plant and its associated mine site infrastructure. Following the permitting of the 2 high grade feeder pits in May 2020, which in aggregate have circa 232,000 oz gold at 5.5 g/t gold, Condor has 1.12M oz gold open pit Mineral Resources permitted for extraction (8,583Kt at 3.3g/t gold for 903,000 oz gold in the Indicated category and 1,901Kt at 3.6g/t gold for 220,000 oz gold in the Inferred category) inclusive of a Mineral Reserve of 6.9Mt at 3.0g/t gold for 675,000 oz gold.

During the period the Company has been focused on de-risking La India Project by advancing and completing several technical and engineering studies, some of which are a condition of the Environmental Permit. The following progress has been made:

Under the terms of the Environment Permit, the Company has to purchase or have legal agreements in place for the land required for the mine site infrastructure. Offers have been made to all land owners. The Company has now purchased 85% of the land in and around the permitted La India open pit mine site area thereby getting close to completing one of the main conditions of the Environmental Permit and significantly de-risking the Project. The Company has purchased 64 plots of land totalling 659 hectares in and around the permitted La India open pit mine site infrastructure, of which 479 hectares has been purchased this year, at the time of writing. In addition, the Company can also demonstrate physical possession for approximately 18 years on the land covering the Mestiza open pit, has purchased the majority of this land and has claimed ownership over 303 hectares in this area. The Company has ownership of 96 hectares of land in the area of the America open pit.

The Tailings Storage Facility and 2 water retention ponds are being fully designed and engineered with drawings one step short of "issued for construction". Tierra Group Inc, Denver, Colorado has completed site visits and is conducting the engineering studies. Good progress has been made, with 40% of the work completed.

The design of the site wide water balance (SWWB), including a surface water management plan, has been awarded to SRK Consulting (UK) Limited ("SRK"). SRK's work includes the area of La India, America and Mestiza open pits. The ultimate objective of the exercise is to produce engineering plans for the installation of the physical components of a management system, including the piping, pumping and structural requirements that will satisfy Nicaraguan authorities and at the same time meet the design standards for a feasibility study. The SWWB will include consideration of the pit dewatering contributions i.e. subsurface hydrology. SRK's remit includes an emphasis on training and capacity building for the local Condor team to ensure full ownership and facilitate implementation and sustainability of the SWWB.

Preliminary designs for the layout of the mine site infrastructure including, in some detail, the designs for the location of the processing plant have been completed.

Mine and waste dump schedules for a number of mining scenarios have been completed to a level that can be submitted to MARENA, once the capacity of the processing plant is finalised.

The processing plant designs will be finalised following the purchase of a second hand or new processing plant.

The power studies have been progressed as far as possible but final designs are only possible once the processing plant size has been finalised and the power requirement known. Several meetings have been held with the Ministry of Energy and Mines. A new electricity sub-station is being built closer to Mina La India.

MARENA has written to the Company confirming that the final designs for the domestic wastewater treatment system for the offices and accommodation blocks at Mina La India comply with MARENA's technical and environmental requirements and the final designs are approved.

CONDOR GOLD PLC

CHAIRMAN'S STATEMENT

FOR THE THREE AND SIX MONTHS TO 30 JUNE 2020 (CONTD.)

I am delighted with the preliminary results of the mining dilution studies by SRK on the permitted America and Mestiza satellite feeder pits, which demonstrate that with a selective mining approach the feeder pits could contribute a diluted tonnage of 1,249Kt for a diluted head grade of 4.76 g/t gold containing 191,000 ounces to the mine plan. When these feeder pits are added to the high grade material within a series of "mini pits" containing 387Kt at 4.29g/t gold for 53,300 oz gold within the permitted La India open pit, the total diluted mill feed is 1,637Kt at a 4.65g/t gold diluted head grade containing 245,000 oz gold. This would support a 1,000 tpd production feed to either a small plant constructed by Condor or a toll milling agreement with nearby processing plants for approximately five years, while leaving the bulk of the La India open pit intact, along with the potential for underground production for a long-range development potential (See RNS 4 March 2020).

Condor has run a number of internal mining scenarios ahead of a construction. The primary scenario is an open pit mining scenario from the permitted La India, America and Mestiza open pits, which would support a 4,000tpd processing plant producing approximately 120,000 oz gold per annum. A secondary scenario involves a 2 stage approach, commencing with a high grade open pit mining scenario of 1,000tpd producing approximately 50,000 oz gold per annum, increasing capacity to 4,500tpd in year 3 or 4 and bring in the underground Mineral Resource and potentially increasing production to circa 170,000 oz gold per annum.

On February 28, 2020, the Company successfully held two Public Consultations in the local community as part of the environmental permitting process for the development and extraction of gold from the high grade Mestiza and America open pits. The key Environmental Permits have been granted for the 2 feeder pits. The America open pit hosts 114 thousand tonnes ("Kt") at a grade of 8.1 g/t gold (30,000 oz contained gold) in the Indicated Mineral Resource category and 677Kt at a grade of 3.1 g/t gold (67,000 oz contained gold) in the Inferred Mineral Resource category. The Mestiza open pit hosts 92Kt at a grade of 12.1 g/t gold (36,000 oz contained gold) in the Indicated Mineral Resource category and 341Kt at a grade of 7.7 g/t gold (85,000 oz contained gold) in the Inferred Mineral Resource category. Once added to the La India open pit, which hosts 8,377Kt at a grade of 3.1 g/t gold (837,000 oz contained gold) in the Indicated Mineral Resource category and 883Kt at grade of 2.4 g/t gold (68,000 oz contained gold) in the Inferred Mineral Resource category (La India open pit has a robust, economically viable Pre-Feasibility Study ("PFS") with Mineral Reserves of 6.9 million tonnes ("Mt") at 3.0 g/t for 675,000 oz gold), Condor has 1.12M oz gold open pit Mineral Resources (8,583Kt at 3.3g/t gold for 903,000 oz gold in the Indicated category and 1,901Kt at 3.6g/t gold for 220,000 oz gold in the Inferred category) inclusive of the Mineral Reserve permitted for extraction, which supports an open pit production scenario of 120,000 oz gold per annum.

The intention is to permit the underground Mineral Resource after open pit mining begins. Total underground Mineral Resources are 1.27 Mt at 5.8 g/t gold, for 238,000 oz gold in the Indicated category and 5.47 Mt at 5.1 g/t gold, for 889,000 oz gold in the Inferred category.

The Company continues to enhance its social engagement and activities in the community, thereby maintaining our social licence to operate. Condor has strengthened its community team and stepped up social activities and engagement. The main local focus is the drinking water programme, implemented in April 2017. A total of 340 families are currently benefiting; they receive five-gallon water dispensers each week. In January 2018 Condor initiated 'Involvement Programmes', which now extend to six groups in the local villageto benefit communities which may be affected by the mine. . Taking the Elderly Group as an example, a committee of six people has been formed. The Company allocates monthly support to the Elderly Group, which decides how this money is spent to benefit the elderly in the Community.

A new mine will create approximately 1,000 jobs during construction and several hundred in the operational phase, with priority given to the local community given appropriate skills, as well as use of local goods and services. The upfront capital cost of approximately US$120 million will have a significant positive impact on the economy. Government and local communities will benefit significantly from royalties and taxes.

As of the date of this document, the ability of the Company to operate has not been materially affected by the on-going Covid-19 pandemic. The situation is kept under close review by management and the Board; certain measures have and will be taken as appropriate to ensure the health and safety of employees in this regard and to reduce the potential spread of the virus within the local community.

CONDOR GOLD PLC

CHAIRMAN'S STATEMENT

FOR THE THREE AND SIX MONTHS TO 30 JUNE 2020 (CONTD.)

In June 2020 the Company announced it had raised £6.6 million by way of a private placement of new ordinary shares. (See RNS of 28 May 2020 for details). A further £1.1 million has been raised in the first half via exercises of warrants.

Turning to the financial results for the six months to 30 June 2020, the profit for the six-month period was £968 thousand, after currency translation differences of £1.3 million. Gross proceeds of £7.7 million were raised during the period via a private placement and exercises of warrants: 18,082,192 ordinary shares were issued through the private placement at a price of 36.5 pence per share, through which also the Company issued 9,041,090 warrants to shareholders. All of these warrants have an exercise price of 40 pence per share and are exercisable for three years from grant date. There are currently 117,326,945 ordinary shares in issue. The cash and cash equivalents as at 30 June 2020 totalled £7,513,056. Post period, in July 2020, the Company raised £88 thousand by way of further exercises of warrants (See RNS for details).

To conclude, the Company has made good progress in the six-month period and continues to de-risk the Project by fulfilling conditions of the permit to construct and operate a new mine at La India. Gold production at the Project has been materially expanded by the grant of Environmental Permits to extract gold from two high-grade

satellite feeder pits. The result is Condor has 1.12M oz gold open pit Mineral Resources permitted for extraction (8,583Kt at 3.3g/t gold for 903,000 oz gold in the Indicated category and 1,901Kt at 3.6g/t gold for 220,000 oz gold in the Inferred category) inclusive of a Mineral Reserve of 6.9Mt at 3.0g/t gold for 675,000 oz gold.The Company is targeting production of 120,000 oz gold per annum from open pit material for 7 years, which compares to the PFS of 79,300 oz gold p.a. for 7 years. The significant underground Mineral Resource of 1.2M oz gold (1.27Mt at a grade of 5.8 g/t gold, for 238,000 oz gold in the Indicated category and 5.47Mt at a grade of 5.1 g/t gold, for 889,000 oz gold in the Inferred category) will be analysed and potentially converted to Mineral Reserves after production from the open pits has started. The Company has purchased 85% of the land within the permitted La India open pit mine site infrastructure thus significantly de-risking the Project and is closer to completing a major objective of purchasing all the land and commencing site preparation. Simultaneously, the Company is completing the majority of the technical and engineering studies, which are a condition of the Environmental Permit and intends to place a deposit on a processing plant by year end.

Mark Child

Chairman and CEO

CONDOR GOLD PLC

REVIEW OF OPERATIONS AND PROJECT OVERVIEW

FOR THE THREE AND SIX MONTHS TO 30 JUNE 2020

LA INDIA PROJECT

Mining Studies

Condor technical staff continues to expand the level of design needed to support eventual operations for La India, Mestiza and America open pits.

Technical investigations in support of the EIA permit conditions continued during the 1st half of the year. The initial work contracted to Tierra Group International was expanded to include designs for the La Laguna retention pond as well as consideration of alternate locations for the TSF. Design criteria and preliminary designs for the TSF have been completed. Required geotechnical work will be conducted following the completion of land negotiations.

Engineering support for a toll milling opportunity is underway, including commercially robust sampling techniques and negotiation models for assessment of the impact of various commercial terms have been compiled. Sampling issues for toll milling represent one of the larger risks for any agreement. Example agreements were collected as well as discussions with industry contacts.

Work has commenced on a site wide water balance that will provide key design criteria for surface and subsurface water management system structure designs and construction plans. This work will be an extension to previous work conducted during the PFS study and will be undertaken by SRK.

Samuel Engineering was retained to perform a more detailed review of the available processing plant at the former Marlin Mine in Guatemala. The preliminary review identified suitable components and will be bolstered with on-site inspections and designs if mutually acceptable terms can be reached with the owners.

Condor staff commissioned a power study as a basis for operating cost development, identifying sourcing options, costs and risk profiles. Power costs remain a significant component of processing costs, prompting Condor to actively seek less expensive alternatives.

Staff has been researching the operating and capital cost of metallurgical laboratory facilities for La India for eventual use in operations.

Work on improved dilution models was completed early in the half, as set out in the Company's news release of 4 March 2020. These models applied dilution techniques employed at other similar operations and apply detailed 3D modeling methods to accurately estimate dilution rather than relying upon simplistic dilution factors.

Dave Crawford

Chief Technical Officer

CONDOR GOLD PLC

REVIEW OF OPERATIONS AND PROJECT OVERVIEW

FOR THE THREE AND SIX MONTHS TO 30 JUNE 2020

Permitting

In compliance with Nicaraguan law, the Company presented the first Quarterly Reports 2020 per concession to government institutions.

On 17 January, Condor received an 18-month extension to complete the conditions of the environmental permit for La India open pit, originally awarded on 27 July 2018.

From the start of the year the Company followed up on its application for two environmental permits for the America and Mestiza open pits. Both were approved to go forward to Public Consultations on 28 February and on 24 and 29 of April, the environmental permits for Mestiza and America were respectively awarded.

The major focus and effort of the local team has been acquiring land for the permitted mine site infrastructure for La India open pit. The Company has purchased 85% of the land in and around the permitted La India open pit mine site area comprising 64 plots of land totalling 659 hectares of which 479 hectares has been purchased this year, at the time of writing.

In compliance with the environmental permit for America, Condor submitted updated versions of the transmission line study and the surface water management study and on 15 June the latter was approved.

On 24 June, a Condor team comprising social, legal, health & safety and environmental areas participated as speakers on a MARENA online workshop: "The use of mercury and cyanide in artisanal mining activities", which was addressed to technicians of the 17 MARENA offices in Nicaragua.

Aiser Sarria Sirrias

General Manager Mina La India

Exploration Activity - 6 months to end-June 2020

During the reporting period Condor has carried out magnetic susceptibility measurements of drill core from several prospects in La India project area (see Figure 1 below). Magnetic susceptibility is a measure of how much a material can become magnetised in an applied magnetic field, which is directly related to the content of ferromagnetic material. In volcanic rocks, such as in the La India project, ferromagnetic materials are strongly related to rock type. Basalts and andesites have a higher concentration of ferromagnesian minerals than dacites and rhyolites and will therefore have a higher magnetic susceptibility.

Hydrothermal alteration processes may transform and even destroy ferrimagnetic minerals, reducing the magnetic susceptibility of a rock and epithermal vein systems like La India may show zonations that are indicative of ore deposits. The objective of the magnetic susceptibility measurements in La India is to improve rock type identification and observe potential alteration halos that could serve to better understand known ore bodies. A total of 11,868 metres of core have been measured from 72 drill holes in seven different prospects (Table 1).

CONDOR GOLD PLC

REVIEW OF OPERATIONS AND PROJECT OVERVIEW

FOR THE THREE AND SIX MONTHS TO 30 JUNE 2020

Figure 1. Map showing drill holes (in blue) with magnetic susceptibility measurements.

Table 1: Number of drill holes with magnetic susceptibility measurements

Prospect

No. drill holes measured

America

2

Andrea

6

Central Breccia

3

La India

49

La Mojarra

3

Mestiza

2

Tatascame

3

Carlos Pullinger

Chief Geologist

Environmental

The tree nursery at La India concession currently holds 7,338 trees including new seedlings planted out, to be used in future reforestation campaigns. During the semester, 230 plants were donated to government institutions and villagers to promote an arboretum and reforestation campaigns. Maintenance of five areas for reforestation located in the villages of Los Rastrojos, and Nance Dulce in La India concession and the village of Soledad de la Cruz in Real de la Cruz concession; maintenance includes watering, fertilising, pest control and replacement of tree losses.

In February and March presentation of the results of the water sampling carried out in November 2019, as part of the Participatory Water Monitoring Programme, took place. The meetings were held in seven villages:

CONDOR GOLD PLC

REVIEW OF OPERATIONS AND PROJECT OVERVIEW

FOR THE THREE AND SIX MONTHS TO 30 JUNE 2020

Carrizal, Santa Cruz de La India, El Bordo, Los Rastrojos, Nance Dulce, Ocotillo and Agua Fría. They were also used to promote environmental awareness and share communication materials related to water protection, fire prevention and a calendar for the 2020 environmental celebrations.

Other environmental activities were conducted in collaboration with the social team, the land acquisition team and co-workers to promote environmental awareness. Environmental awareness workshops were provided through the Niñez Feliz programme, including to 20 children, as well as a workshop on water use to 60 villagers from Talpetate and El Tanque villages. Waste Management talks were given to artisanal miners and three cleaning activities were organised with workers and artisanal miners collecting a total of 24 bags of plastic bottles and 441 bags of general waste.

During the first half of the year, a total of 140 lbs of plastic bottles were donated to the "Los Pipitos" recycling programme, a not-for-profit organisation which works with children with learning disabilities.

Since 18 March, when the first confirmed case of Covid-19 in Nicaragua was announced, activities were modified to avoid spreading of the virus, while continuing the implementation of environmental activities.

Condor continues to monitor surface water flow at five sites and groundwater levels at 26 sites, as part of its hydrology and hydrogeology baseline studies. A new site was added, located in Nance Dulce village. Weather data is also monitored daily using three rain gauges and a digital weather station.

Irene Chow

Environmental Manager

Social

During the first quarter of the year, the Company focussed its social activities on securing the social license for Mestiza and America projects through a wide-open communication campaign reaching some 800 villagers from the communities in the directly and indirectly affected areas. During the public consultation on February 28th, both projects were fully presented and explained to 450 attendees, who actively participated and expressed their comments supporting the projects approval.

As result of extensive communications with villagers from the three communities in the vicinity of Mestiza and America projects, Condor built 40 latrines to improve the public health and hygiene of the inhabitants of this area, as well as the repair of more damaged areas of the road which provides access to El Tanque village.

The Company continued executing the involvement programs with committees representing key sectors of the community such as cooperative and independent artisanal miners, the elderly, local business owners, APROSAIC (local association for development initiatives) and water. These communal organisations encompass almost 85% of La India population. The Company has been working very closely with these local organizations holding planned activities every month to address the needs of villagers and improve their quality of life, although some interactions were modified and others suspended due to Covid-19.

Nonetheless the Company continues implementing the potable water program to alleviate water scarcity in the community by distributing purified water weekly to some 390 families, although the dynamics of delivery were adjusted through establishing a central water distribution point.

The Company has prioritized its social budget for support to public health centres by providing decontamination and sanitation equipment and safety masks, among other contributions to further their ability to respond to Covid-19.

Victor Martinez

Community Relations Officer and Manager of Social Team

CONDOR GOLD PLC

REVIEW OF OPERATIONS AND PROJECT OVERVIEW

FOR THE THREE AND SIX MONTHS TO 30 JUNE 2020

CURRENT CONCESSION HOLDINGS

Nicaragua Projects

Project

Concession

Ownership

Expiry Date

Area (km²)

La India Project

La India

100% Owned

January 2027

68.50

Espinito Mendoza

100% Owned

November 2026

2.00

Cacao

100% Owned

January 2032

11.90

Santa Barbara

100% Owned

April 2034

16.20

Real de la Cruz

100% Owned

January 2035

7.66

Rodeo

100% Owned

January 2035

60.40

La Mojarra

100% Owned

June 2029

27.00

La Cuchilla

100% Owned

August 2035

86.39

El Zacatoso

100% Owned

October 2039

1.00

Tierra Blanca

100% Owned

June 2040

32.21

Las Cruces

100% Owned

December 2043

142.3

Cerro Los Cerritos

100% Owned

June 2044

132.1

Subtotal

587.66

Boaco

Rio Luna

100% Owned

June 2035

43.00

RAAN

Estrella

100% Owned

April 2035

18.00

Nueva Segovia

Potrerillos

100% Owned

December 2031

12.00

TOTAL

660.66

All concessions in Nicaragua are combined exploration and exploitation concessions.

CONDOR GOLD PLC

REVIEW OF OPERATIONS AND PROJECT OVERVIEW

FOR THE THREE AND SIX MONTHS TO 30 JUNE 2020

CURRENT LA INDIA PROJECT CIM CODE & NI 43-101 MINERAL RESOURCE

The following Mineral Resource estimations set out Condor's Mineral Resource Statement as at 25 January 2019 for the La India Project.

Mineral Resource Statement prepared in accordance with CIM and Canadian NI 43-101 as at 25 January 2019 for the La India Project (SRK Consulting (UK) Ltd.).

SRK MINERAL RESOURCE STATEMENT as of 25 January 2019 (4), (5), (6)

Category

Area Name

Vein Name

Cut-Off

Gold

Silver

Tonnes (Kt)

Au Grade (g/t)

Au (Koz)

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