Lundin Gold (TSX: LUG) has reported that the ramp up of its Fruta del Norte gold mine and plant is on schedule and within budget. The mine - Ecuador's first large-scale gold mine - produced 28,678 oz. gold last year.
Based on an update to its mine plan, life-of-mine all-in sustaining costs are now expected at US$621 per oz., up slightly from its prior estimate of US$583 per ounce. The increase is primarily driven by revised metal price assumptions leading to increased royalties and production taxes.
The company expects to declare commercial production at Fruta del Norte in the second quarter. Underground development rates are in line with the company's plan, and construction was 99.2% complete at the end of the year. The paste plant is expected to be finished in the second quarter.
Of the total gold output last year, 3,411 oz. were produced in dor?(C) and 25,267 oz. were produced in concentrate. Of the 3,400 tonnes of concentrate produced, 2,676 tonnes were shipped to a smelter in Finland by year-end.
The Fruta del Norte underground mine is expected to average production of 300,000 oz. gold annually over a 15-year mine life, with current reserves of 17.8 million tonnes grading 8.74 grams gold per tonne for a total of 5.02 million ounces. The company has identified additional exploration targets within the 16-km long Suarez basin.