Lundin Gold granted permit for new Ecuador target

Fruta del Norte overall construction almost finished. (Image courtesy of CNW Group/Lundin Gold.)

Canada’s Lundin Gold (TSX:LUG) has received an exploration permit for the Emperador concession in Ecuador, located in the same basin that holds its flagship Fruta del Norte gold-silver mine, in operation since late 2019

The Vancouver-based miner said it would focus all initial exploration work on the highly prospective, drill-ready Barbasco target, located about 7 km south of Fruta del Norte, the country’s largest mine.

“Our exploration strategy is focused on our highly prospective land package and receipt of this permit means we can finally drill known targets starting with Barbasco,” President and CEO Ron Hochstein said in a media release.

Since July, the mine has been operating again at full capacity with fresh safety protocols in place

“Our strategy is to systematically explore the basin as we believe that the geological conditions that led to the formation of Fruta del Norte could also exist elsewhere within this structure.”

Lundin has said it anticipates an exploration investment of $5 million for Barbasco this year. If the results of the drill campaign are positive, the company plans to invest another $10 million in exploration next year.

The company had to halt Fruta del Norte earlier this year to help stop the spread of covid-19. Since July, the mine has been operating again at full capacity with fresh safety protocols in place.

The underground mine contains six of Lundin’s 29 mining concessions and covers 70,000 hectares of land. Discovered in 2006, Fruta del Norte is expected to produce 4.6 million ounces of gold over a 15 year mine life.

Top performer

Lundin Gold, worth C$2.75 billion, said in a separate statement that it had been recognized in as one of the top 30 performers on the Toronto Stock Exchange this year. The nomination, it said, took into account the company’s results over a three-year period, and it’s mostly based on dividend-adjusted share price appreciation.

Since January 2017, Lundin’s stock has gained C$6.47, an increase of almost 84%.

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