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The Fruta del Norte gold project, located in southeast Ecuador about 139 km east-northeast of the City of Loja, is one of the highest-grade gold projects currently under construction in the world today. The majority of the project area lies in the highlands south of the Zamora River and east of the Nangaritza River in the Condor mountain region. The Fruta del Norte (“FDN”) deposit is an intermediate-sulphidation epithermal gold-silver deposit measuring approximately 1,670 metres along strike, 700 metres down dip and between 150 metres and 300 metres wide. The structure that hosts the FDN deposit is a Jurassic aged structural zone termed the Suárez pull-apart basin.
Historical work carried out by prior owners including Aurelian Resources Inc., and Kinross Gold Corporation, enabled Lundin Gold to move quickly towards a feasibility study and ultimately a production decision after acquiring FDN in late 2014. A 2016 Feasibility Study along with an updated project cost estimate released in 2018 evaluated a large-scale underground mine processing up to 3,500 tpd and producing 330,000 ounces of gold per year at an AISC of US$583 per ounce. Current Probable Mineral Reserves of 5.0 million ounces of gold in 17.6 Mt at a grade of 8.7 g/t support a 15-year initial mine life. The process plant will use gravity, flotation and carbon-in-leach circuits to recover gold to concentrate and as doré with combined metallurgical recoveries estimated at 91.7% for gold.
Lundin Gold has completed several drill programs since 2015. Mapping, geochemical sampling and permitting required for future drilling continues at multiple epithermal gold-silver targets to be explored inside and outside of the Suárez basin structure.
An initial internal throughput expansion study completed by Lundin Gold on the technical feasibility of increasing throughput in the plant from 3,500 to 4,200 tpd. Engineering, costing, procurement of additional equipment and scheduling are underway with the objective of completing this project before the end of 2021.
In early 2021, Lundin Gold plans to commence a 10,000 metre drill program targeting conversion and expansion of the Fruta del Norte Mineral Resource.
The exploration permit was received for the Barbasco target, which is located approximately seven kilometres south of the Fruta del Norte mine. Barbasco is within the same basin with similar structural setting and surface expression as the Fruta del Norte deposit. The target is 3.8 kilometres in length. Lundin Gold is planning a 6,000 metre drill program on Barbasco in the fourth quarter of 2020.
Lundin Gold closed a C$57.5 million bought deal financing. The net proceeds will be used to study increased throughput, future resource expansion, and for general working capital purposes.