LONDON (ShareCast) - (Sharecast News) - Condor Gold has agreed to purchase a complete new semi-autogenous (SAG) mill package from First Majestic Silver for $6.5m (£4.67m), it said on Monday, including $3m payable in shares.
The AIM-traded firm said the SAG Mill was a key plant item in its plan to bring La India project into production.

It said the mill was estimated by Metso Outotec's technical support group to have a throughput of up to 2,300 tonnes per day, or 0.8 million tonnes per annum on a sustained basis, based on the metallurgical characteristics of the ore and mineralised material at the project.

Based on internal technical studies and mining dilution studies conducted by SRK Consulting UK, Condor said initial production was expected to be between 80,000 and 100,000 ounces of gold per annum.

Condor's gold said the purchase would reduce the order time of the long-lead item by 12 months, adding that there was the possibility of increasing throughput by 22% to 2,850 tonnes per day by installing a larger motor.

"The key message is that Condor has purchased and sized the mill at 2,300 tonnes per day, significantly shortened the mill delivery time, set a trajectory for detailed project design and an accelerated path to production," said chairman and chief executive officer Mark Child.

"What's more, Condor has acquired a state-of-the-art, complete new SAG Mill package with warranties, manufactured and supplied by Metso Outotec, the premier manufacturer of grinding mills and entire grinding systems for the global mining industry.

"Metso Outotec's technical support group has estimated a throughput of 2,300 tonnes per day or 0.8 million tonnes per annum on a sustained basis using the existing motor."

Child said the new SAG Mill formed the first stage of production, with the aim is to "materially expand" production capacity after two to three years.

"I am also delighted that First Majestic Silver has given a vote of confidence to Condor's management team and endorsed a new mine at the fully permitted La India Project by accepting part payment in Condor's shares at 50p."

At 1454 GMT, shares in Condor Gold were up 12.39% at 51.7p.

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