Lundin Gold making great progress at Fruta del Norte Ecuador

first_imgLundin Gold has released the results of its update of the project estimate (UPE) for its Fruta del Norte gold project in southeast Ecuador. The UPE involved a thorough review of the mine plan, capital and operating cost re-estimate and an update to the project schedule. UPE highlights:•Reconfirmed construction schedule with first mine production planned in Q2 2019 and first gold production planned in Q4 2019•Reduced period of capital payback to 3.5 years from 4 years with improved IRR to 17.5% from 16.3%•A 10% increase in NPV 5% to $786 million from $717 million•Estimated all-in sustaining cost (AISC) reduced to $583/oz of gold from $609/oz of gold•Estimated operating cost per tonne decreased 7.3% from $111.84 to $103.65•Estimated total gold production increased by 73,000 oz to 4.6 Moz over a 15 year mine life•Total estimated capital expenditures increased only 1.2% from $684 million to $692 million.“At the end of August we had committed 63% of planned capital expenditure, and construction is 27% complete. The UPE demonstrates that we are on track to build Fruta del Norte on budget and on schedule which is a credit to our team,” said Ron Hochstein, Lundin Gold’s President and CEO. “We were able to lower the estimated AISC through improvements in the mine plan, refinement of processing costs and negotiation of smelting contracts for the concentrate. This further demonstrates the robustness of our high-grade Fruta del Norte gold deposit.”Fruta del Norte update:•As at August 31, 2018, a total of 2.9 km had been achieved including declines and auxiliary development, with 1.4 km and 1.5 km achieved in the Kuri and K’isa declines, respectively•Daily August average advance rates were 6.1 m for both Kuri and K’isa, versus a target of 4.7 m and 4.3 m/d, respectively•Both declines have now crossed the Machinaza Fault and have gone under the Machinaza River, with no water inflows•Grinding building steel erection is underway, and process plant concrete is 30% complete•Mill process equipment is arriving on site, and the grinding mills are currently en route•The two construction fronts on the North Access Road have met, and the road is expected to be complete by the end of September•The Environmental Licence was received for the Mountain Pass Quarry, and negotiation of the Quarry Exploitation Agreement with the Yantzaza municipality is well underway•Construction of the powerline, both onsite and offsite, is proceeding•Construction of the TSF is ongoing•63% of planned capital expenditure is now committed or incurred, of which 36% of planned capital expenditure has been incurred. Project engineering is now 60% complete•Activities have commenced to prepare for operations including the hiring of the general manager and mill manager.The company has increased its estimates for Probable Mineral Reserves slightly by 80,000 oz when compared to the project update announced on May 30, 2017 (the “PPR”) and by 204,000 oz when compared to the estimates contained in the Technical Report.last_img read more

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