Condor Gold has initiated a formal strategic review of its business in the light of the relatively low gold price and the lack of appetite for equity financing in the junior exploration sector.
The company is a gold explorer which has developed the high grade La India project, in Nicaragua, through to the Pre-Feasibility Study stage. However, despite its exploration success, the company feels that raising between US$110 million and US$169 million needed to construct a mine would prove “significantly dilutive to existing shareholders” and questions whether satisfactory terms for debt financing could be obtained in the current economic climate. It also questions the merit of progressing the la India project through to a definitive feasibility study in the current market.
Condor has appointed an outside financial advisor to look at options for maximising value for shareholders, which include the sale of the company or a joint venture or sale of assets.
Condor shares were trading at 56 p this morning, close to the 52-week low of 48 p. As at the end of 2014, the company had cash of £5 million.
Condor to review merits of progressing La India: CNR