Name and Location
Fruta del Norte (FDN) project, Ecuador.

Client
Lundin Gold.

Project Description
FDN has mineral reserves totalling 15.5-million tonnes at 9.67 g/t of gold and 12.7 g/t of silver.
A feasibility study on the project envisions a mine with production estimated at 4.4-million ounces of gold and 5.2-million ounces of silver over an initial 13-year mine life, and an average gold recovery of 91.7% and average silver recovery of 81.5%.

Average gold production is estimated at 340 000 oz/y at an average life-of-mine (LoM) total cash cost of 553/oz and a LoM all-in sustaining cash cost of $623/oz, placing FDN in the lowest cash cost quartile globally.
Twin declines will be built using 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 centrally and will be offset by about 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 at an estimated 15% gradient.

FDN ore will be processed using a gravity, flotation and leaching (GFL) flowsheet.
The GFL process is best suited for recovery of FDN gold because of the manner in which 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.

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 be either 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 is estimated at 82% in concentrate and 18% in doré.

The concentrate is expected to have an average gold grade of 149.3 g/t and will be a marketable concentrate with no significant penalty elements.
The doré is expected to contain more than 98% of precious metals.

The precious metal portion is expected to contain about 60% of gold and 40% of silver.

Net Present Value/Internal Rate of Return
The project has a pretax net present value, at a 5% discount rate, of 1.28-billion and an internal rate of return of 23.8%, with a payback of 3.7 years.

Value
The cost of the project, including contingency, is estimated at $669-million.

Duration
Construction is expected to start in mid-2017, with first gold production expected in the first quarter of 2020 and the first full year of production in 2021.

Latest Developments
Lundin has said that the feasibility study provides a solid basis to enable FDN to advance immediately into development.
The next phase of the FDN project is basic engineering and an early works programme.
The main objectives of the programmes are to provide the infrastructure, services and facilities to support the start of the twin decline construction and to fast-track the project.
Basic engineering will focus on completing optimisations and the remaining field investigations and other activities to support an efficient project start.
These programmes are planned to start in the third quarter 2016 and are expected to be completed by the end of the second quarter of 2017.

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.