The Fruta del Norte project site in August 2018.
The Fruta del Norte gold mine that Lundin Gold is building in Ecuador is progressing on schedule, with first mine production planned in the second quarter of next year, followed by first gold output in the fourth quarter.
Construction of the 340 000 oz/y gold mine in the Cordillera del Condor region is about 27% complete and about 63% of the planned capital expenditure has been committed, president and CEO Ron Hochstein reported on Wednesday.
Following an update of the project estimate he delivered some good news about Fruta del Norte’s cost estimates and project economics, helped by improvements in the mine plan, the refinement of processing costs and negotiation of smelting contracts for the concentrate.
The estimated all-in sustaining cost reduced from $609/oz to $583/oz and the estimated operating cost a tonne decreased from $111.84 to $103.65.
Production, meanwhile, increased by 73 000 oz to 4.6-million ounces over the 15-year mine life.
Project economics also improved, using the same gold and silver price assumptions of the technical report. The capital payback period has been lowered to 3.5 years, from four years, and the internal rate of return has improved from 16.3% to 17.5%, while the net present value improved from $717-million to $786-million.
The capital cost of the project increased by 1.2% to $692-million.
Lundin in July arranged a $350-million debt facility from a group of lenders, including ING Capital, Societe Generale, Caterpillar Financial Services (Cat Financial), the Bank of Nova Scotia, Natixis, KfW IPEX-Bank and Bank of Montreal, to fund the mine.