Lundin Gold hits 2.0 million-ounce milestone in Q3
Lundin Gold Inc. [LUG-TSX, Nasdaq Stockholm] has reported third quarter 2024 gold production of 122,154 ounces from its Fruta del Norte gold mine in southeast Ecuador.
Of the total amount produced in the quarter, 73,532 ounces were produced as concentrate and 48,622 ounces as dore. Gold sales totalled 125,887 ounces
During the same quarter in 2023, the company produced 112,212 ounces of gold and gold sales amounted to 112,711 ounces.
In the third quarter of 2024, the mill processed 425,340 tonnes of ore, resulting in an average throughput rate of 4,623 tonnes per day at an average grade of 10.3 grams per tonne with recoveries of 86.8%.
“I’m pleased to announce that during the third quarter, we achieved the milestone of 2.0 million ounces of production from Fruta del Norte in just under five years of operation,’’ said Lundin Gold President and CEO Ron Hochstein.
“Having produced 366,788 ounces year to date, we are confident in achieving our 2024 production target of 450,000 to 500,000 ounces,’’ he said. “We are excited about Lundin Gold’s continued success this year and we look forward to bringing the major components of the Process Plant Expansion project on line by year end.’’
As previously announced on April 25, 2024, Lundin Gold struck a deal with Newmont Corp. [NGT-TSX, NEM-NYSE] to buy out 100% of the balance of the stream credit facility and offtake agreement for Fruta del Norte gold for US$330 million. That amount was payable in cash over two tranches. The first tranche of US$180 million was paid on June 28, 2024.
“We are pleased to confirm that the second and final payment for US$150 million was made on September, 27, 2024,’’ the company said.
Fruta del Norte is one of the highest-grade operating gold mines in the world. The mine reached commercial production in February, 2020. Lundin acquired the asset from Kinross Gold Corp. (K-TSX, KGC-NYSE) in 2014 for $240 million.
Lundin was able to acquire Fruta Del Norte for a fraction of the $1.2 billion that Kinross paid for the asset after Kinross was hit with a 70% revenue-based windfall profits tax and halted development after spending US$225 million on drilling.
Confident that he could secure more favourable terms, Lundin Gold’s late Chairman Lukas Lundin won the right to produce gold at Fruta del Norte for 25 years under an (potentially renewable) exploitation agreement that allows Ecuador to tax the difference between net smelter revenue and what the revenue would be using a base price at a 70% rate. The base price, to be determined on a monthly basis, will equal the trailing 10-year average of the daily price of gold and silver.
Lundin’s third quarter results were released after the close of trading on October 8, 2024, when the shares closed at $31.43. The shares trade in a 52-week range of $31.72 and $14.23.