Name of the Project
Fruta del Norte (FDN) gold project.

Location
Ecuador.

Client
Lundin Gold.

Project Description
A feasibility study on FDN has confirmed that the project will support an economically viable and robust, high-grade underground mine.

FDN has total indicated resources of 23.8-million tonnes grading 9.61 g/t gold and 12.9 g/t silver. Inferred resources have been estimated at 11.6-million tonnes grading 5.69 g/t gold and 10.8 g/t silver.

Probable mineral reserves are estimated at 15.49-million tonnes grading 9.67 g/t gold.
 

The project involves the development and construction of the 340 000 oz/y FDN gold mine. Over its 15-year mine life, the mine is forecast to produce 4.4-million ounces of gold and 5.2-million ounces of silver.
 

The feasibility study proposes the construction of twin declines, which will use a spiral to gain depth to maximise the distance from the surface so that a vertical distance of about 155 m below the Machinaza river can be obtained. 

The mine ramp will be located central to and be offset 50 m from the main workings to the east of the deposit. The ramp configuration will enable haulage trucks to achieve higher average haul speeds and maintain safety standards. The ramp will be developed nominally at a 15% gradient.

Levels will be developed to access the strike extents of the deposit and connect the development to the return air raise in the north and fresh air raise in the south to establish flow-through ventilation.

Stope crosscuts are required to access sill development from the haulage drifts, as well as connecting sill development within a given stope line separated by waste. 

Development will be centrally located within a given stope. 

The top development in a stope will initially serve as the drill horizon for the stope below, and then as the mucking horizon for the stope above. 

The bottom development in a stope will serve as the mucking horizon for the stope above.
 

FDN ore will be processed using a gravity, flotation and leaching (GFL) flowsheet. 

The GFL process is best placed for recovery of FDN gold because of the way that the gold is contained in the ore.

Following a conventional semiautogenous/ball mill grinding circuit, the gravity circuit will recover the coarse-free gold, and small amounts of fine free gold and gold contained in sulphides. 

Following grinding and gravity, the flotation circuit can recover the gold associated with sulphides (pyrite). 

The flotation tailings will be treated in a carbon-in-leach circuit that will recover the fine gold. The final tailings will either be filtered and sent to the mine as paste backfill or deposited in a conventional tailings storage facility.

Over the life of the mine, about 70% of the gold will be produced in concentrate and the remainder in doré. 

Silver production will comprise about 82% in concentrate and 18% in doré. 

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project has a pretax net present value, at a 5% discount rate, of $1.32-billion and an internal rate of return of 24.7%, with a payback of 3.1 years.

Value
Initial capital costs have been estimated at $684-million.

Duration
Construction began in mid-2017, with first gold production expected in the fourth quarter of 2018.

Latest Developments
The FDN gold project has been significantly derisked from a financial standpoint, with the closing of a $350-million senior debt facility and the signing of an offtake agreement for about half of its production over the first eight years of operation.

A syndicate of seven lenders, including ING Capital, Societe Generale, Caterpillar Financial Services (Cat Financial), the Bank of Nova Scotia, Natixis, KfW IPEX-Bank and Bank of Montreal, have provided the project finance facility.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
Lundin Gold, tel +1 604 689 7842, fax +1 604 689 4250 or email info@lundingold.com.