Whittle’s “Integrated Strategic Planning” process drives share value for Condor Gold, La India project
Mining Business Challenge
Condor Gold’s La India project in Nicaragua had stalled following unimpressive results from the technical studies used in the NI 43-101 compliant pre-feasibility Study (PFS) & Preliminary Economics Assessments (PEA).
These studies outlined three potential development scenarios: a mining project solely focussed on an open pit at La India, a mining project centred on La India but incorporating satellite pits too, and a project incorporating both open pit and underground mines.
WC was commissioned to investigate strategic options to optimise the mine schedules to improve the La India projects economics.
The Whittle Integrated Strategic Planning Process involves the application of advanced analytical techniques using the proprietary Whittle Enterprise Optimisation software (Prober E), to construct a model of the operation from the ore bodies through to the market with a view to maximising a project’s (mines) NPV.
Modelling techniques and facilities are comprehensive, capturing and harnessing the client’s information on geology, geotechnical, mining engineering, process engineering and metallurgy, finance and marketing, to combine into an Integrated Enterprise Optimisation Model. The model is used to direct underground mine design or as a basis for pit and phase optimisation and to develop and all-of-mine business plans which identify the optimal operating configuration for the scenario presented. The result is a unique capability that can resolve planning issues beyond the scope of available packaged planning software and conventional techniques.
The process enabled the WC team to construct a base model for the La India project using the reserves / resources and technical studies (PFS / PEA) available from the client.
Four production scenarios were assessed with further validation for each case developed to create the optimised schedule through variable cut-off grade, stockpile capacity, grind-throughput-recovery, multi-mine scheduling and optimised pit and phasing. The power of the WC ‘Prober E’ software meant the project took under 3 months to complete with more than x strategic scenarios modelled for the total mine enterprise. The ability to pull multiple mine levers across the operation and models its impact on value, lead to several key decisions to significant improvements in the projects viability (could be a quote from Mark?
– how did we solve the issue with a focus on the customer challenge and Whittle consulting service solution.
Overall, the independent optimisation analysis conducted by Whittle Consulting clearly demonstrated the potential to unlock substantial additional value from the La India project. Across 3 production scenarios, NPV increase over 50%, IRR average 30%, the payback on upfront capital costs is between 2to 3 production years, and gold production increase on average 22% for the first 5 years. All in sustaining cash costs remain under US$700 per oz gold.
By demonstrating increase value across all four production scenarios following the Whittle Consulting Enterprise Optimisation process, Condor Gold share price increased with a renewed confidence in the quality of the La India asset. Notwithstanding the share price increase, the Whittle project has also provided Condor Gold with several potential outcomes. At the time of writing Condor Gold was in an offer period, considering all options including a sale of the company or joint venture deal in a strategic review of its direction.
For more details on the Condor Gold Enterprise Optimisation project see reference points below. For further information about Whittle Consulting and its Integrates Strategic Planning process contact Gerald Whittle / Stephanie Jones or visit www.whittleconsulting.com.au
- Condor Gold Press Release – Whittle Consulting’s Optimisation Study Significantly Enhances Economics, 22 Jan 2016 view
- Whittle optimisation study works wonders at Condor Gold’s La India project
Proactive Investors, October 2015 view
- Condor Gold’s latest study shows La India upside, says CEO Mark Child
Proactive Investors Stocktube, October 2015 view
- Condor Gold