Drilling Report

RNS Number : 1661X

Condor Resources PLC

10 February 2012

 

Condor Resources Plc                                                          7th Floor                    39 St. James's Street         London               SW1A 1JD                Telephone [phone]  Fax: [phone]

10^th February 2012

Condor Resources Plc

(''Condor'' or "the Company")

Breccia Discovery Confirmed by Drilling and Trenching Results for the La India Project.

Condor (AIM:CNR), the Central American gold exploration company focused on proving a large commercial gold resource on its 100%-owned La India Project in Nicaragua, is pleased to announce the results of further trenching and the first exploratory drilling on the Central Breccia. 

The Central Breccia was discovered by Condor in 2011 (see announcement dated 7^th September 2011) and represents the first location that significant widths of wide low grade gold mineralisation has been categorically demonstrated within the La India Project, opening up the possibility of open pit mining.

Highlights:

·     Trench intercepts of 41.9m at 1.59g/t gold and 49m at 1.26g/t gold from two trenches located 25m apart on the Central Breccia demonstrating continuity of high grade mineralization at surface.

·     Two exploratory drill holes confirms a large hydrothermal system with elevated background gold values extending to over 150m depth.

·     Drill Hole LIDC091 - 102m drill length at 0.31g/t gold and drill hole LIDC096 - 130m drill length at 0.12g/t gold.

·     Location is significant as it is along the 3km axis of an epithermal gold system where veins to the south dip to the north and veins to the north dip to the south.

Mark Child, Executive Chairman and CEO of Condor Resources plc, commented:

"The Central Breccia is a potentially excellent prospect: a gold mineralised breccia at surface averaging over 1g/t gold has been proven over an area of at least 25m x 49m by trenching, which is open in all directions. Further drilling will be required to establish whether the wide zone of plus 1g/t gold mineralisation is the surface expression of a larger body that dips or plunges to one side of the drill holes, such that the drilling simply skimmed the edge of the main zone of mineralisation, or is confined to the top few metres near the surface. There are three further drill directions that could be employed to test for higher grade gold mineralisation at depth; drilling in the opposite direction and drilling in either direction perpendicular to the original drill holes. Before committing to further drilling, the Company is undertaking extensive trench and soil sampling programmes to try to better constrain the orientation of the mineralised body. The location of the Central Breccia could be significant as it is at the structural centre and a possible "feeder zone" for La India epithermal gold system on an axis of over 3km, where the veins in south dip to the north and the veins in the north dip to the south."

Condor discovered the Central Breccia through rock chip sampling an area of interest identified through analysis of a previous explorer's regional soil sampling data and following up on the findings of geological consultants SRK Consulting (UK) Limited. SRK completed a structural geology report, commissioned by Condor, on La India Project in September 2011. SRK identified that the Central Breccia area is located on the central axis of the La India Project Epithermal gold system where gold bearing structures converge as a graben-like structure identified along a 3km strike length and orientated east-west to northwest-southeast. 

To the south of this axis, the principal structures dip towards the north and to the north of this axis, the principal structures dip to the south. Immediately to the east of the Central Breccia, the axis is cross-cut by regional-scale north-northeast structure. Significant structural deformation would be expected at the point of convergence of these structures which would form a favourable host for massive gold mineralisation along multiple orientations. Additionally, the graben-like orientation of the mineralised veins suggests that epithermal fluids were emplaced under an extensional setting. The axis of the graben is a likely location of the "feeder zone" for the gold-bearing epithermal fluids that formed La India Project's gold deposits.

Since the discovery of the Central Breccia in September 2011, Condor has completed a further 235m of trenching and drilled two exploratory diamond core drill holes for a total of 320m. Assay results have been returned for 190m of trenching, including an extension to the discovery trench LITR012, and another trench excavated 25m across strike (LITR026) as well as both drill holes. Assay results are pending for the remaining 45m of trenching. Significant trenching and drilling intercepts are summarised in the following tables.

Table 1. Significant trench intercepts.

Trench ID	From	To	Trench Width	Au (ppm)	Ag (ppm)	Comment
LITR009	11.65	23.50	11.85	0.57	1.4	open to south
including	11.65	14.80	3.15	1.42	1.6
LITR012	0.00	41.90	41.90	1.59	2.2	open to north-east
including	0.00	20.00	20.00	2.66	3.8	open to north-east
including	24.00	25.00	1.00	1.10	2.0
including	28.00	29.00	1.00	1.26	1.4
including	30.00	32.00	2.00	1.67	0.9
including	34.00	35.00	1.00	1.48	0.6
including	40.00	41.90	1.90	1.02	1.2	open to south-west
LITR013	0.00	7.00	7.00	0.52	0.4	open to north
including	4.00	5.00	1.00	2.13	0.5
LITR026	0.00	49.00	49.00	1.26	1.1	open both directions
including	2.00	4.00	2.00	2.85	3.1
including	11.00	13.00	2.00	2.93	1.1
including	17.00	18.00	1.00	6.64	2.9
including	35.50	36.50	1.00	1.06	1.0
including	39.50	49.00	9.50	3.74	2.0	open to south-west

Trench intercepts calculated using a 1m at 0.1g/t gold lower cut and allowing up to 1m internal waste. 'Included' intercepts calculated using a 1m at 0.5g/t gold lower cut and allowing up to 1m internal waste.

Table 2. Significant drill intercepts.

Drillhole ID	From	To	Drill Width	Au (ppm)	Ag (ppm)	Comment
LIDC091	1.52	103.63	102.11	0.31	1.2	Open at depth
including	45	45.72	0.72	5.22	4.0
including	96.01	103.63	7.62	0.95	1.3
LIDC096	12.95	143.05	130.1	0.12	1.4
including	66.80	80.50	13.7	0.26	1.4	Max 0.43g/t Au

The additional trenching and two exploratory drill holes on the Central Breccia show extensive hydrothermal breccia development hosted by porphyritic andesite. To date trenching and drilling data has delineated the hydrothermal breccia over an area of 50m x 75m, with surface float mapping and the ongoing trenching suggesting a considerably larger lateral extent. Drilling has intercepted quartz-calcite breccia to a depth of 150m below surface, with almost continuous quartz-calcite hydrothermal breccia intercepted along a 130m interval of drill core in drill hole LIDC096. The entire hydrothermal breccia is anomalous in gold with background gold mineralization of 0.1 to 0.2g/t gold. Within this low-grade mineralisation halo there are multiple zones of high grade gold mineralization.

The distribution at surface of high grade gold mineralization has been best tested in the vicinity of the original 'discovery' trench (LITR012), where two sub-parallel trenches located 25m apart have

been excavated and sampled along 41.9m and 49m lengths respectively. Both trenches are gold mineralized along their entire lengths:

·     The extended 'discovery' trench LITR012 intercepted 41.9m at 1.59g/t gold.

·     Trench LITR026 returned an intercept of 49m at 1.26g/t gold.

These two trenches effectively delineate an area of the gold mineralised breccia at surface which averages over 1g/t gold over an area of at least 25m x 49m. The trenches include high grade zones above background of up to 20m at 2.66g/t gold in the extended trench LITR012 (initially reported as 11m at 2.67g/t gold prior to extension of the trench; see announcement dated 7^th September 2011). Gold mineralization remains open in both trenches and further trench extensions are currently being excavated.

The two exploratory drill holes were drilled directly beneath trenches LITR012 and LITR026, orientated towards the north in order to intersect the anticipated south-dipping structure. The drilling intersected wide zones of low-grade gold mineralization hosted by extensive hydrothermal quartz-calcite brecciation along a drill length of over 130m. The gold grades were lower than at surface with the shallower of the two drill holes (LIDC091) returning the better intercepts with 102.11m (65.2m true width) at 0.31g/t gold including 0.72m drill width at 5.22g/t Au from 45m and 7.62m drill width at 0.95g/t Au from 96.01m. The lower grade drilling results could indicate either (1) that the wide zone averaging over 1g/t gold mineralisation intersected in trenches LIDC012 and LIDC026 dips or plunges at depth either to the north, east or west, away from the drilling. If this is the case then the drill holes passed at an acute angle through the low grade outer halo of the main zone of mineralisation, the shallower drill hole, LIDC091 passing closer to the higher grade core. Alternatively (2) the gold mineralisation decreases with depth and the 'discovery' outcrop represents a remnant cap.

Condor is highly encouraged by the size of the hydrothermal system and the width of some of the gold intercepts, particularly at surface, which indicate open-pit potential. The limits of the hydrothermal brecciation have not been defined and Condor has initiated a soil sampling programme across the area to better define the geochemical signature, the limits of the low-grade gold envelope and the extent and orientation of the higher grade gold mineralization.

This is being supplemented by continued geological mapping and rock chip sampling over a wider area to look for further outcrops of gold mineralized quartz breccia. Further drilling will be required to test the depth potential by drilling in the opposite direction and/or perpendicular to the existing drill holes. Further close-spaced trenching in two different orientations is underway in order to better define the distribution and geological control on the gold distribution in order to optimize future drilling. Assay results are pending for 145m of trenching and a further 65m is currently being excavated by trench digging teams on some of the steeper terrain. A track-mounted excavator is expected onsite within the next week to excavate a further 350m of trenching where the topography allows access.

Map of La India Project showing location of Central Breccia :

http://www.rns-pdf.londonstockexchange.com/rns/1661X_1-2012-2-9.pdf 

Competent Person's Declaration

The information in this announcement that relates to Exploration Results and database is based on information compiled by and reviewed by Dr Luc English, the Country Exploration Manager, who is a Chartered Geologist and Fellow of the Geological Society of London, and a geologist with sixteen years of experience in the exploration and definition of precious and base metal Mineral Resources. Luc English is a full-time employee of Condor Resources plc and has sufficient experience which is relevant to the style of mineralization and type of deposit under consideration, and to the type of activity which he is undertaking to qualify as a Competent Person as defined in the June 2009 Edition of the AIM Note for Mining and Oil & Gas Companies.

Luc English consents to the inclusion in the announcement of the matters based on their information in the form and context in which it appears and confirms that this information is accurate and not false or misleading.

 - Ends -

For further information please visit www.condorresourcesplc.com or contact:

Condor Resources plc	Mark Child, Executive Chairman and CEO [phone]	Luc English, Country Manager Nicaragua & El Salvador [phone]
Beaumont Cornish Limited Ocean Equities	Roland Cornish/ James Biddle [phone] Will Slack [phone]
Farm Street Media	Simon Robinson [phone]

About Condor Resources Plc:

Condor Resources plc is an AIM listed exploration company focused on developing gold and silver resource projects in Central America.  The Company was admitted to AIM on 31^st May 2006 with the stated strategy to prove up JORC Resources in Nicaragua and El Salvador.  Condor has six 100% owned concessions in La India Mining District ("La India Project"); three 100% owned concessions in three other project areas and 20% in the Cerro Quiroz concession in Nicaragua.  In El Salvador, Condor has 90% ownership of four licences in two project areas.

Condor's concession holdings in Nicaragua currently contain an attributable JORC compliant resource base of 1,707,000 ounces of gold equivalent at 5.5 g/t in Nicaragua and an attributable 1,004,000 oz gold equivalent at 2.6g/t JORC compliant resource base in El Salvador. The Resource calculations are compiled by independent geologists SRK Consulting (UK) Limited and Ravensgate.

Disclaimer

Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

Technical Glossary

Assay	The laboratory test conducted to determine the proportion of a mineral within a rock or other material. Usually reported as parts per million which is equivalent to grams of the mineral (i.e. gold) per tonne of rock
Diamond core drilling	A drilling method in which penetration is achieved through abrasive cutting by rotation of a diamond encrusted drill bit. This drilling method enables collection of tubes of intact rock (core) and when successful gives the best possible quality samples for description, sampling and analysis of an ore body or mineralised structure.
Down-dip	Further down towards the deepest parts of an ore body or zone of mineralisation
Graben	A geological structure formed as a response to extensional forces in the Earth's crust whereby a series of faults develop which converge at depth along an axis perpendicular to the direction of extension. The wedge shaped rock masses between the faults at the centre of the axis sink to fill the space caused by the 'pulling-apart' of the crust.
Grade	The proportion of a mineral within a rock or other material. For gold mineralisation this is usually reported as grams of gold per tonne of rock (g/t)
g/t	grams per tonne
Intercept	Refers to a sample or sequence of samples taken across the entire width or an ore body or mineralized zone. The intercept is described by the entire thickness and the average grade of mineralisation
JORC	Australian Joint Ore Reserves Committee, common reference to the Australasian Code for reporting of identified mineral resources and ore reserves
Mineral Resource	A concentration or occurrence of material of economic interest in or on the Earth's crust in such a form, quality, and quantity that there are reasonable and realistic prospects for eventual economic extraction. The location, quantity, grade, continuity and other geological characteristics of a Mineral Resource are known, estimated from specific geological knowledge, or interpreted from a well constrained and portrayed geological model
Open pit mining	A method of extracting minerals from the earth by excavating downwards from the surface such that the ore is extracted in the open air (as opposed to underground mining).
oz	Troy ounce
Quartz breccia	Broken fragments of rock cemented together by a network of quartz rock. The quartz is deposited from saturated geothermal liquids filling the space between the rock fragments.
Quartz veins	Deposit of quartz rock that develop in fractures and fissures in the surrounding rock. They are deposited by saturated geothermal liquids rising to the surface through the cracks in the rock and then cooling, taking on the shape of the cracks that they fill.
Strike length	The longest horizontal dimension of an ore body or zone of mineralisation
Trench	The excavation of a horizontally elongate pit (trench), typically up to 2m deep and up to 1.5m wide in order to access fresh or weathered bedrock and take channel samples across a mineralised structure. The trench is normally orientated such that samples taken along the longest wall are perpendicular to the mineralised structure.
True width	The shortest axis of a 3 dimensional object (i.e. ore/mineralised body), usually perpendicular to the longest plane. This often has to be calculated where channel or drill sampling was not exactly perpendicular to the long axis. The true width will always be less than the apparent width of an obliquely intersect sample.
Mt	Million tonnes

 

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