Lundin tables Chapada mine plan, shares rise

Yamana Gold’s copper-gold Chapada Mine in Brazil which Lundin Mining is acquiring. Source Yamana Gold Inc.

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Lundin Mining Corp. [LUN-TSX; LUMI-Sweden] on Friday October 11 released an updated mine plan and NI 43-101 technical report for its Chapada copper-gold mine in Brazil, which it recently acquired from Yamana Gold Inc. [YTI-TSX; AUY-NYSE] in an US$800 million deal.

Lundin is a diversified Canadian base metals mining company with operations in Chile, United States, Portugal, Sweden and Finland, primarily producing copper, nickel and zinc. Lundin also holds an indirect 24% equity stake in the Freeport Cobalt Oy business, which includes a cobalt refinery in Kokkala Finland.

Chapada is a 100%-owned traditional open-pit truck and shovel operation, producing a copper concentrate. It is located in northern Goias State, approximately 320 km north of the state capital of Goiania, and 270 km northwest of the national capital of Brasilia.

The project includes the Chapada copper-gold deposit and the Suruca gold deposit. Suraca is located six kilometres northeast of the Chapada deposit.

Lundin has previously said the mine is expected to produce approximately 54,500 tonnes of copper and 100,000 ounces of gold this year (75,000 tonnes of copper equivalent) at a co-product cash cost of between US$1.60 and US$1.80 a pound for copper and US$430 per ounce for gold equivalent.

In Friday’s update, Lundin said the current reserves and throughput of 24 million tonnes per year support a mine life of 31 years (to 2050), yielding average copper production of 46,000 tonnes annually, including a higher 53,000 tonnes annually through to 2040.

Lundin said the ore stockpile will be processed intermittently throughout the mine life. It said the mine life is 24 years plus an additional eight years at the end of the mine life for processing the remainder of the ore stockpile.

On Friday, Lundin shares advanced 6.3% or 41 cents to $6.87 on volume of 2.34 million. The shares are currently trading in a 52-week range of $4.70 and $7.96.

Chapada currently has 752 employees and approximately 1,340 contractors. Around 10% of the workforce is female. The majority of the workforce is between 26 and 35 years old (42%) and 36 to 45 years gold (32%).

Although accepting the project, local community members have raised concerns regarding unintended impacts of noise, dust and vibration, the company said. Lundin said it provides a toll-free line and WhatsApp channel to allow community members to voice concerns and grievances, which are recorded and investigated.

“The commitments are tracked and monitored in order to report back to communities on progress and continued engagement for improvement,” the company said.

As of June 30, 2019, Chapada’s measured and indicated mineral resources of copper/gold including mineral reserves stand at 1 billion tonnes grading 0.24% copper and 0.15 g/t gold, containing 2.6 million tonnes of copper and 5.2 million ounces of gold.

Proven and probable mineral reserves of copper/gold, including existing stockpiles scheduled for processing, are estimated to be 738.8 million tonnes, grading 0.24% copper and 0.15 g/t gold, containing 1.8 million tonnes of copper and 3.5 million ounces of gold.


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