ECUADOR – Vancouver-based Lundin Gold has received a positive feasibility study for its Fruta del Norte gold and base metals project near the village of San Antonio. The report was prepared by AMEC Foster Wheeler and other experts.
The study is based on 15.5 million tonnes of reserves grading 9.69 g/t Au and 12.7 g/t Ag, containing 4.82 million oz of gold and 6.34 million oz of silver. At an average annual gold production of 340,000 oz and an all-in sustaining cost of US$623 per oz of gold over an initial 13-year mine life, Fruta will rank in the lowest cash cost quartile globally.
Lundin estimates that development carries a capital cost of US$669 million with construction to begin in mid-2017. First gold production would occur in Q1 2010.
Before taxes, Fruta del Norte has a net present value (5% discount) of US$1.28 billion and an internal rate of return of 23.8%. Capital will be paid back in 3.7 years. The base case assumes a gold price of US$1,250/oz and a silver price of US$20/oz.
“The feasibility study results present a unique opportunity for the company and its shareholders,” remarked Lundin Gold chairman Lukas Lundin. “The results confirm our expectations for Fruta del Norte, which is one of the world’s largest undeveloped gold deposits, validating the original commitment of the board of directors, management, our investors and Ecuador’s stakeholders to push forward with this exciting project.”
A summary of the Fruta del Norte project and technical reports are available at www.LundinGold.com.