21st Mar 2016 12:30
LONDON (Alliance News) - Condor Gold PLC on Monday said it has renegotiated the terms to acquire the Espinito-Mendoza Concession at the La India project in Nicaragua, ending a dispute between itself and the sellers.
Condor entered into an agreement with Minera La Mestiza SA in August 2011 to transfer 100% of the concession to Condor's wholly-owned Nicaraguan subsidiary, Condor SA, for USD1.6 million, spread over 36 months in cash and shares.
Condor had made payments of USD1.2 million, but a dispute arose over the transfer of clean surface rights on the concession to Condor, a 5,000 metre drill commitment by Condor and a bonus to be paid to Mestiza on a mineral reserve estimation on the concession.
Under the renegotiated terms, Condor has made a cash payment of USD30,000 and will pay a further cash payment of USD470,000 by June 1. Additional payments of USD10,000 per month are payable for 20 months commencing 30 days after that date.
Mestiza remains entitled to a 2.3% net smelter return on mineral extraction from the concession, but not a bonus on reserve estimation. Condor is also no longer obliged to conduct the 5,000m drilling programme and assumes responsibility to clean up the surface rights.
"I am pleased, after many months of negotiation, to have settled a dispute over the purchase of the high grade Espinito-Mendoza Concession, which clears the way to advance the concession and convert more of the Soviet classified resource on the Mestiza Vein Set of 2,392kt at 10.21g/t for 785,684 oz gold to western standards," Chief Executive Mark Child said in a statement.
"We remain convinced that La India Project hosts a substantial gold field with considerable upside potential," he added.
Shares in Condor Gold were trading up 6.2% at 43.00 pence on Monday afternoon.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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