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Condor Gold

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September 18, 2024 at 9:30 AM (MDT)|Broadmoor Hotel & Resort

Mark Child

CEO

Mr. Child joined Condor’s Board as Non-Executive Chairman in May 2006 and became CEO in July 2011. He acquired the concessions that comprise the 587 sq km La India Project. He has overseen 85,000 m drilling and all technical studies for a Pre-Feasibility Study and Feasibility Study. He has led the Project to be fully permitted for construction and extraction, purchased all the land and negotiated the purchase of a new SAG Mill, which has arrived in Nicaragua. He has led the financing for the Project over the last 13 years and de-risked the Project to a “construction ready” status.

Mr. Child was commissioned as an officer in the 2nd King Edward VII’s Own Gurkha Rifles and served in the British Army for 4 years. Mr Child has 20 years of equity capital markets experience, as an institutional stockbroker and in corporate finance/private equity, mainly in emerging markets. At board level Mr. Child has been an executive director of Hong Kong listed Regent Pacific Group, an emerging market fund manager and private equity group. He has board level experience of AIM listed and private companies.

This is an automatically generated transcript. Denver Gold Group cannot accept responsibility for mistakes, errors, omissions, or any action taken in reliance thereon. Use of this transcript is governed by Denver Gold Group’s Terms of Use.

Good morning. Thank you for the introduction and also a big thank you to Denver Gold Group for laying on the gold form Americas. It's such a pleasure to be able to present here alongside the industry giants of Newmont and the like when you're a minnow in this industry, I've been ceo of the company for 14 years. And what I want to present to you today is where we've got to as the first slide indicates we've got a fully permitted mine. It's permitted for construction. We bought all the surface rights and we have a base case of 100,000 ounces of gold per annum. We have cleared the site and this photo demonstrates taken from my iphone that we've purchased this site and cleared it and the tree cutting permits and so forth to do that. There's our statutory disclaimer. A copy of this presentation will be on our websites in London and Canada. We are a, a listed company and we're also on the main board of the TSX. So just to follow up, we have a stage one production of 100,000 ounces of gold a year that's from Probable mineral reserves. So we've gone through the whole process of pa's pfs feasibility study and this is filed on cedar. The upfront capital cost is relatively low at $106 million. I would say the study is led by Sr consulting in Denver and the UK signed off by them. The upfront capital costs are done by Australian listed company called GR Engineering Services and the Tens group are also TAS is done by a group in Denver as well. So our 100,000 ounces comes out of the probable lunar reserves and three permitted pits. We're fast tracking this because we've actually bought a sag mill which is in Nicaragua, which I'll show you. And we bought about 1000 hectares of service rights. So we've really gone to the extent of deris this as far as we, we can at this stage, there's a stage two of production to increase it to 150,000 ounces of gold a year by adding in 1.2 million ounces of underground. And that's a pa level. We also think we're sitting on a major gold district and we can easily add another 5 million ounces to what we have today. We've got strong economics. We're about $1000 all in sustaining cash costs in the feasibility study and about 900 in the pe A S as we add ounces and get economies of scale. The A IC is reduced and we're very, very undervalued because of about one per cent of the gold price. The other valuation matrix I should talk to is M PV. I'm going to talk you through some valuation slides for the feasibility study which has done at $1600 gold compared to say 2400. And what that does? Our MPS range from 350 million US. So a price to book 0.2 to $900 million and we have a market capitalization of $60 million. So why, why is our, why are we so undervalued when we've got to a point of getting this shovel ready and on a plate to be constructed. And part of that reason is Nicaragua. There are us sanctions on Nicaragua as people in this room will know from my perspective, Nicaragua has been incredibly good to the company. It's probably one of the best places to operate as a mining group in Nicaragua. And you can see from this slide that there are four producing mines there. Gold is the biggest export. You have caliber mining maca, mining, mineros, mining, all operating that TSX listed, you own 100 per cent, you get your concessions, both exploration and exploitation for 25 years, which is a great long time. And the environmental standards that you permit things through are really high and there's a good rule of law. So that's a general or Nicaragua. We found them very good to work with the picture there of the project. We picked up 580 square kilometers of land. This is sandwiched between caliber's two mines of Eli libit. And as you look at the light color on that, you'll see that that's flat ground on the left hand side, as you look at it, it's sugar cane on the right side side of light, it's rice and we've got this ridge of hills going between the two and that's the plate tectonics buckling. There's major structural fault here. This is a low sulfur epi the vein system and it's a big endowment. So just zooming in on to what we've got when I started to pick this up the attraction, two main attractions. The first one was a historic mine by Miranda of Canada. Some of you will remember that the mine produced 570,000 ounces of 13 g. So super high grade, no drilling done. We have all that historic production data of 40,000 ounces of gold a year. No one has mined that since 56. The other mines in the area which are also mined at that time have all been running continuously since then. So there's been no additional depletion. We have seven deposits that make up our 2.5 million ounces of gold. There are four satellite deposits and there are three areas that are permitted. So if you look at the map in the South or the bottom of the slide, you've got Landia, which is 1.3 million ounces. Then America is about half a million ounces. The Mestiza of about 330,000 ounces. We've broken down the open pit in the underground. But in summary, you're about 1 million, 1.2 million ounces, open pill and 1.2 million ounces underground. So I'm now gonna zoom into our permitted area. So unlike a lot of people that you've listened to, they're still applying for their permits and they got timelines of three or five years and maybe they won't get them. We have the permits. So the magenta color you have here on the outline is given by the Ministry of the Environment and that is the master environmental permit to construct and operate. So if I take you from the south or the southern part of that map, we have a highway, a tarmac road actually running through the project. So we got to build any ice roads for 150 kilometers. Well, we are 12 degrees north of the equator, but we got to build roads into the jungle two hours from the airport of mania. We got grid power running down that road and as you look at it, we've got the main pit there and out of that pit, we can do 82,000 ounces of gold here. And I'll come on to that if we add to the and there's 400,000 ounces beneath that pit of high grade. So everything within the plant, the Tailings explosive magazine, the waste dumps, the halls, everything is permitted. It just needs the money. And to the north, we've got two feeder pits which I'll come on to. So this is the feasibility study which we filed on cedar on October 22 and I put here where we are on the $1600 gold compared to $2400 gold. As you know, a feasibility study is plus or minus 50% accuracy. So this is, this is pretty good. So on the feasibility study, we're 7.3 million tons, we're very high grade with 2.6 g. That's all out of probable mineral reserves. We have a strict ratio of 13 to 1 if we add some inferred in the pit that comes down to 11 half, 12 to 1. But we, we've got 82,000 ounces of gold per annum for just six years out of that. That's only 40% of our resource ounces. And if you look at the revenue numbers and it all remains the same in both columns to there, we're 880 million at 1600 we go up to 1.3 billion at 2400 drop. And then we have put in operating expenses, sustaining capital and our eit number on the six Fs is 355 million and that more than doubles. So, because we're very high grade, it's very sensitive to the moves in the gold price. There's a multiple effect we put in the initial capital of 100 and 5 million, the taxes and the M PB jumps up over three times to 320 million irrs 60% pay back 20 months. So that's, and while I'm on that slide, I just want to refer to those two feeder pits to the north. Those numbers compound our base case instead of 82,000 ounces a year, we go to 120,000 ounces per annum for six years. And the, and the ear number goes to over a billion and the payback comes back to under 12 months. So and that's actually what you would do while you're constructing the mill, you would bring the small feeder pits into a mine plan by doing the geotechnical work and so forth. That's happened. Here's the main FS pit. We've got some super high grades in it from 10 m true width, 34 g. And number five there, we've got 21 m near service at 6 g. We've done about 90,000 m of drilling on this and you can, all that information's available. This is the FS designs for the processing plant. It's a simple bit of macao to put up. We've got the sag mill. It's a single stage grind down to 75 microns. It's C I like all the plants in nagar and I'm just going to go now to interest of time to skip forward to the most upside pa which involves the underground as well. This one would give us and this is underneath the pit. So these higher gold prices, the numbers here don't reflect that with $800 higher gold or more than $850 higher gold on this comparison, We haven't adjusted the pit shells. So it's just the contained metal within the pit shells. I'm running on Amazon. In reality, the pits would push deeper, take in some of that underground, you drop off the cut off grade. So on the likely scenario here, you'd be about 160,000 of gold per annum, your ear more than doubles to 2.3 billion as you move from 15 $50 gold to 2400. Your irrs go to 100% and you'll pay back six months. So these are the sort of impacts that gold's having on this. The sag mill I mentioned has arrived in the country. So I just talked to that for a moment. We bought that off. First. Majestic Silver half was paid in cash and shares. So that's a major long lead item that can just be brought up to site within a matter of days. No, just to go into the shareholder structure before I go into the exploration upside. Our chairman Jim Mellon has 26 per cent of the company. The directors have about 30 per cent. So we have quite a lot of skid in the game. The market capitalization I mentioned is about 60 million today and those are some of the numbers I just mentioned at this point that we have announced that we're selling the assets of the company. We've appointed Hanneman partners an investment bank in the UK to run that process. We're going through a formal sale process of the assets. We've, I've just had two weeks in Nicaragua before these conferences. Every time someone looks at it, they love the Georgie, they love the upside it ticks all the boxes for people. Some people have questions on Nicaragua, but we remain with about eight companies in the data room. And as I've gone through this conference, more people wanting to come under NDA. We've had a number of site visits, but there's nothing we're not near announcement as I speak today. And if I was, I can't say anything anyway, but we are, what you're seeing here is somebody else's mine. And the reason for that is that we don't have a mine building team. We've looked at the trade docks and taking it through construction, think we're better placed to let someone else build the mine. Here's our chart now reflecting where we are, this is for five years, you might well say, well, go up 22 per cent or so. This year, your share price has done nothing. That's true. I think Mr Bart's telling us to get on with the sale process. There's some concern but there's a clear value disconnect with our MPV. The numbers, the sale process and that's a challenge, but it just re emphasizes the undervalued nature of this asset, the resource expansion. This is put together by our geologists by Andrew cheat, our senior Georg non exec director, former Gold Corp. And when he was there, he was telling me that what they do in Gold Corp is they do studies on the what if scenario. So health warning. This is very conceptual local Georges, Dr Luke English and Andrew and others. And we've flown this with helicopter borne geophysics. The area we've done soil sampling, we've done detailed structure models. So it is based on a lot of scientific fact. We've written papers on this. If everyone would like them, let me know. And it essentially shows that the resource extension of drilling down the ore shoot drilling along strike could, could get you another 3.4 million. That's the low hanging fruit for us. We've been a bit starved of cash for several years so we haven't been able to do this drilling and that's because of where we're operating and the market conditions and the fact that we focused on de risking this to a shovel ready project with P FSS. FSS permits and so forth. So we chose that route rather than do the thing of trying to get this to 8 million ounces, which I think is clearly there, but there are 22 targets. So lots of upside it needs like caliber is doing at the moment. They've done a fantastic job in Nicaragua. They're drilling 100,000 m a year. And their minds have, they've never had those projects, have never had bigger resources and reserves because they put the money in the drill bit and they've had fantastic results. There's no reason why this can't have similar results to what you're actually seeing at caliber. the low hanging fruit of drilling down the oars shoots. We can just add a million underneath the permitted pits and around those areas. So that, that's the first target you go to and we have drill plans for that. This is an I plan, sorry, cross section of not cross section, long section, sorry of where the pit is and the green on the right as you look at it is the outline of the pit. Then we have and on the pit, obviously, everything's on the surface. Then there's a major regional fault that drops down. And you can see the words fault written there. And we have drill holes just to highlight them. There are four drill holes there, each of over 10 g and there's one there which you can see down of 60 m, true width of 10 g. So there's nothing on the surface. And then in the 1st 100 150 m, and then you've got this very wide grade, very high grade or shoot, that is just so mable 60 m at 10 g. And this could continue, there could be a series of these to the south. We got to go and drill it. Someone else has to drill it. But it's just an indication of the prospect over five kilometers away. We've got 100,000 ounces on the CACA deposit. This is not in the MPS. This is just upside. So we've traced it for four kilometers, it goes under alluvial. And what we've done is a bit of work and for about a kilometer, this blue line shows you all the drilling over 10 m thickness. The Georges tell me looking at the core that is the same as a very healthy quartz vein. It's wide, it looks the same as Landia vein. So we think there's another couple of million ounces here. The word on environmental and social. We put a lot of money into the community, social license to operate. We do everything to the performance standards. We've done the water, the healthcare, put a water purifier and plant in and we've trained people for the future mine, about 120 people so far we're still bussing people, local village, local university. And so forth. We have a fantastic team and I want to pay tribute to them here for maintaining that social license to operate, which is just as critical once you've actually got your permits. So to summarize and I can take some questions if you like the base. The reserve case is 82,000 ounces of gold a year for six years. Adding in the feeder pits that are permitted, we're 120,000. If we add in the underground or 150 for nine years or 160 for four years, we got the S A mill in country. We bought all the land, we cleared the site. We think we're on a major district of fiber and ounces plus from where we are very strong economics, an incredibly undervalued ounces and one per cent. The gold prize ounce in the ground or your M PV. The maximum we've got there at 2400 is over $900 million. So we think this is too attractive. A project not to be acquired and the mine is just too attractive not to be built. So I'll leave you with that thought. Thank you. All right, thanks very much. Is, is there any questions from the floor by me? Mark in your pe there? The tax payable line seems a quite a substantial amount. How do things work in Nicaragua? Can you, are you have been drilling for quite a bit? You've spent a lot of money. There. Are there tax offsets down there? That's the first one I was just also just tag on the end the royalty regime that you're under down there. Firstly, thank you for the question. There's a three per cent royalty on sales to the government for all producing mines that's in the mining code. There is a 30% corporation tax in Nicaragua to all companies and that applies to mining too. There are tax deductible items for equipment that is used at the mine site. So if you bought a sag mill, there's no import duties and it's offset against tax on a depreciation basis. So that's how it works in terms of capital allowances. If you import equipment and you use it in a capital, we've done like vehicles, you get no tax relief on it. But if you've got trucks that you're using at the mine site, you've got the relief. Hi, how big is the mill? The mill is 2800 tons per day. That's the capacity of the mill. We bought it off first Majestic Silver when they canceled the mill. They'd ordered it for the San Dinas mine and they dispute with the government over tax and we spoke to Mets. So, so it's from me out just to emphasize, it's not just a mill, it's a brand new sag mill package. So there's 32 component parts in there including the rining machines which cost $800,000. It's everything and it's brand new from the Mercedes of the mill market, let's say thank you. Yeah, I think that's fine. Thank you very much. Thank you very much this morning session. So thank you again to all of our presenters.


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