Lundin to advance Fruta del Norte to development on positive feasibility

TORONTO (miningweekly.com) – Canadian project developer Lundin Gold, a member of the Lundin Group of Companies, has published the results of a feasibility study for its attractive Fruta del Norte (FDN) gold/silver project, in Ecuador, stating that it would soon move into the development phase for what is one of the highest-grade undeveloped precious metals projects anywhere in the world.

With an eye on first production early in 2020, Lundin stated Monday that basic engineering and an early works programme would get under way in the third quarter to provide the infrastructure, services and facilities to support the start of the mine's twin decline construction and to advance the project in a fast-tracked manner.

"The feasibility study provides a solid basis to enable FDN to advance immediately into development, ultimately becoming a landmark, high-quality and profitable mining operation, adding great value to the company, its shareholders and the people of Ecuador. With the support of the government of Ecuador, we look forward to building a historic high-grade gold mine in Ecuador,” stated Lundin Gold president and CEO Ron Hochstein.

According to the feasibility treatment that was prepared by Amec Foster Wheeler, with the support of four other globally recognised engineering firms, FDN had an after-tax net present value, at a 5% discount rate, of $676-million, providing an after-tax rate of return of 15.7%.

The study assumed a gold price of $1 250/oz and a silver price of $20/oz.

According to Lundin, the initial capital cost was estimated to be $669-million, excluding any expenditures by the company before starting construction on July 1, 2017. The sustaining capital was estimated to be $263-million and closure costs were projected to total $29-million.

FDN would produce about 340 000 oz at an average life-of-mine (LoM) total cash cost of $553/oz and an LoM all-in sustaining cash cost (AISC) of $623/oz, placing FDN in the lowest cash-cost quartile globally.

Over the project’s initial 13-year mine life, it would produce 4.4-million ounces of gold and 5.2-million ounces of silver, using an average gold recovery of 91.7% and average silver recovery of 81.5%.

PROCESS PLANS
Lundin advised that the FDN ore contained gold in four distinct forms, including fine free gold, coarse free gold, gold contained in sulphides (refractory), and gold contained in other forms, such as silicates.

FDN ore would be processed using a gravity, flotation and leaching (GFL) flow sheet, owing to it being best placed for recovery of the FDN gold owing to the manner in which the gold is contained in the ore, Lundin explained.

Following a conventional semi-autogenous grinding/ball mill grinding circuit, the gravity circuit would recover the coarse free gold and small amounts of fine free gold and gold contained in sulphides. After grinding and gravity, the flotation circuit would be capable of recovering the gold associated with sulphides (pyrite).

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

Over the LoM, about 70% of the gold would be produced in concentrate and the remainder in doré, with silver output being 82% in concentrate and 18% in doré.

The FDN project comprised compliant probable reserves totalling some 15.5-million tonnes grading 9.67 g/t gold and 12.7 g/t silver, containing 4.82-million ounces of gold and 6.34-million ounces of silver.