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Lundin Gold shares hit 52-week high on new Fruta del Norte drill results

Fruta del Norte is Ecuador’s first large-scale modern gold mine. (Image courtesy of Lundin Gold | Facebook.)

Lundin Gold (TSX: LUG), which is conducting resource conversion drilling at its 100% owned Fruta del Norte gold mine in southeast Ecuador, has announced positive results that confirmed the wide, consistent nature of mineralization and have also generated new targets outside of the resource envelope.

Since 2021, Lundin has been advancing its conversion program at Fruta del Norte, with the objective of converting inferred resources to measured or indicated resources, and thus extending the mine life.

The Fruta del Norte deposit is currently estimated to contain an inferred resource of approximately 11.6 million tonnes averaging 5.69 g/t gold, containing 2.13 million ounces of gold.

A total of 18,340 metres of underground drilling across 88 drill holes has been completed, the results of which, according to Lundin, will improve confidence in and further support the geological model and assist the company in preparing an update to the current mineral reserve and resource estimate at Fruta del Norte.

The conversion drilling targets the southern extension of the deposit, with numerous drill holes returning high-grade intercepts associated with a hydrothermal alteration zone. Notable intercepts include 12.57 g/t over 101.3 metres, 10.76 g/t over 163.2 metres, 12.67 g/t over 98.3 metres and 17.93 g/t over 51.45 metres. These results confirm that the mineralized zone extends a further 300 metres past the current Fruta del Norte mineral reserve boundary in the southern direction.

“I am pleased to announce these exciting drill results, which have confirmed the continuity of mineralization along the southern extension of our current inferred resources and will support the completion of a mineral reserve and resource update and subsequent 43-101 report, anticipated to be released in the first quarter of 2023,” Lundin CEO Ron Hochstein said in a news release.

“In addition to supporting the conversion of inferred resources, some conversion drilling results have also provided additional targets for our near mine exploration program,” he added. “These drilling intercepts from the deepest boundary of the Fruta del Norte mineral resource envelope indicate that the deposit remains open at depth.”

Shares of Lundin Gold rose 16.5% by 11:00 a.m. ET to C$12.93 following the drill results release. Earlier in the day, the stock had touched a new 52-week high of C$12.98.

The company’s market capitalization is approximately C$3.1 billion ($2.3bn).