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Lundin Gold, approaching the final phase of building an underground gold mine at the Fruta del Norte deposit in Ecuador, is now less than a year away from production.
It is at this point that the market share should appreciate the most, "said CEO Ron Hochstein, who also hopes to report interesting exploration results at the time. future, while examining potential candidates for an acquisition.
"Our goal is to start production in October 2019. Experience shows that this is related to the start of production because the market is re-evaluating companies of our type," he said. at the news agency Direkt.
Lundin Gold bought Fruta del Norte at the end of 2014 for $ 240 million with payment in cash and own shares. The seller, Kinross, had already invested $ 279 million in the region, but had retired after clashes with the country's authorities.
However, for Lundin Gold, the job was easier. The first production was initially scheduled until early 2020, then it came close to the fourth quarter of 2019. Ron Hochstein says it will likely be early in the quarter.
"After a difficult first few games, we are drilling in stable ground, we were expecting an average of 5 meters per day, but the last month, the cup was 7 meters," says Ron Hochstein .
The company recently completed a full project review and then reduced the expected production cost, increasing the present value and thus reducing the repayment period of the investment. However, some larger revisions to the forecasts do not wait for the CEO.
"When we reach the deposit, we can make minor changes to the fracture, but this is likely only at the level of detail," he said.
As part of the financing, which is ready until the start of production, the company signed a so-called over-agreement agreement with Boliden. This agreement means that Boliden will buy about half of the Fruta del Norte concentrate for eight years and process it in the Finnish Harjavalta smelter.
"Our team was in Harjavalta and was very impressed – it is a very well run facility." Boliden also looked at us carefully, particularly with regard to the environment and sustainability, and found that we had the same ambitions, "commented Ron Hochstein.
The fact that Harjavalta is purely geographically distant from Ecuador plays an economic role, according to Chief Lundin Gold.
"Shipping is very competitive, the cost of transporting concentrate from the mine to the shipping port in Ecuador is about the same as transporting Ecuador to Finland."
For the rest of the production, Lundin Gold signed an agreement with two foundries, one in Canada and one in Europe.
The fact that the company is approaching its own production also means that it is possible to give more power to expanding the resource base. Prospecting is underway both near Fruta del Norte on behalf of Lundin Gold and in the joint venture operated by Newcrest partner at a slightly greater distance.
"This can be an interesting news feed on prospecting in the future," says Ron Hochstein without going into details, while repeating previous messages about the possible acquisition of assets.
"There are a number of interesting companies with only one project to consider – we would prefer something in North America or South America, but for the Lundin family, few places in the world are totally impossible."
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