Lumina Gold soars on positive economic assessment for Ecuador project
Shares in Canadian gold junior Lumina Gold (TSX-V:LUM) (OTC:LUMAF) jumped Thursday after the company announced it had received positive results of the Preliminary Economic Assessment (PEA) for its Cangrejos gold-copper project in southern Ecuador.
Based on the PEA, the asset has gained a place in the list of top 15 undeveloped gold projects in the world based on its average annual production potential, the Vancouver-based gold minor said.
Preliminary Economic Assessment shows Cangrejos has the potential to be an economic, large-scale open pit gold and copper mine.
Lumina Gold’s President and CEO, Marshall Koval, called the reports a “crucial first step” in demonstrating the value of the Cangrejos project to both the company’s shareholders and Ecuador.
The miner’s stock shot up 5.4% in New York, trading at 57 cents, while the Canadian shares were up 1.35% to 75 cents by 9:44Am ET.
The PEA, initiated late last year, also demonstrates that Cangrejos has the potential to be an economic, large-scale open pit gold and copper mine.
The project operational life is estimated in 16 years, with an annual payable production of 373,000 ounces of gold and 43 million pounds of copper.
The company expects to process 40,000 tonnes of ore per day in the first five years of operation, growing to 80,000 tonnes a day in year six.
Initial costs for the project located in El Oro Province, including working capital, are pegged at $831 million, while the planned expansion would need further $406 million.
Ecuador has gained ground as a mining investment destination in the past two years thanks to a revised regulatory framework and a major investor engagement campaign that has already attracted around 420 applications for concessions in less than a year.
In March, Anglo American (LON:AAL) became the latest big miner to land in the South American country. Through a deal with Lumina Gold itself, the company plans to develop two copper and gold concessions there.
Currently, the nation’s emerging mining sector employs 3,700 people, but the government estimates the figure will rise to about 16,000 in the 2017-2020 period.