Lundin releases Candelaria sink hole update

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Lundin Mining Corp. [LUN-TSX; LUMI-Sweden] said it continues its monitoring and technical analysis to identify the factors that led to the formation of a sinkhole near the Alcaparrosa mine at the company’s Minera Ojos del Salado operation at Candelaria in Chile on July, 30, 2022.

“In support of ongoing investigation, work continues with Chile’s National Service of Geology and Mining to collect and analyze geophysical, geotechnical and hydrogeological data,’’ the company said. For this purpose, the company said it has mobilized resources such as sophisticated technology and experts to guide this investigative process.

Meanwhile, the company is providing regular updates to community members, union representatives and other stakeholders, and has expressed its full willingness to collaborate with the investigative proceedings initiated by the national environmental regulator, Superintendencia del Medio Ambiente (SMA), the Atacama Local Prosecutor’s Office, and the inter-ministerial working table to be formed, as announced by the Minister of Mining.

In an August 1, 2022 press release, Ludin said that as a preventative measure, development work in an area of the Alcaparrosa underground mine has been temporarily suspended though is not expected to impact annual production guidance for the Candelaria Copper Mining Complex.

The Alcaparrosa mine contributes approximately 5.0% to the overall ore processed annually by the Candelaria Mining Complex, which is expected to produce between 155,000-165,000 tonnes of copper and between 83,000 and 88,000 ounces of gold this year on a 100% basis.

That makes Candelaria by far the largest copper mining operation in the Lundin portfolio, which is expected to produce between 250,000 and 274,000 tonnes of copper this year.

The Candelaria Copper Mining Complex consists of two adjacent copper mines, Candelaria and Ojos del Salado. Ojos del Salado contaoms two underground mines, Santos and Alcaparrosa.

They produce copper concentrates from open pit and underground mines. The operation is held 80% by Lundin and 20% by Sumitomo of Japan.

Mining operations at the Alcaparrosa mine remain suspended, and the status of the sinkhole has not changed materially since detection, Lundin said in a press release. “Further information will be provided as events warrant, including following the outcome of investigation into the cause,’’ it said.

Lundin Mining shares were lower on the news, easing 3.1% or 22 cents on volume of 1.14 million. The shares are currently trading in a 52-week range of $14 and $6.57.

The open pit and underground mining operation at Candelaria provides copper ore to an on-site processing plant, with a capacity of 75,000 tonnes per day. Ojos del Salado consists of two underground mines, Santos and Alcaparrosa

Copper concentrates containing precious metals are sold on contract to local smelters or trucked to the Punta Padrones port, near Caldera, for export to overseas smelter.

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