Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Canada’s Lundin Gold (TSX: LUG) saw production jump at its Fruta del Norte gold-silver mine in Ecuador in 2021, its first full year of operations, churning out a total of 428,514 gold ounces.
The figure exceeded the Vancouver-based miner ‘s 2021 guidance of between 380,000 and 420,000 ounces of gold for the year. Almost 108,000 ounces of the total were produced in the last quarter of the year, Lundin said.
President and chief executive officer Ron Hochstein said the company was pleased with the mine’s first full year of production – a result of improved recoveries and the completion of the plant expansion. The project, finished on time and on budget, increased the average plant throughput from 3,500 tonnes per day (tpd) to 4,200 tpd.
Lundin increased Fruta del Norte’s reserves in late 2020 by 8% to 5.41 million ounces, due to changes in the planned mining method.
Based on the new figures, it now expects to produce almost 4.8 million ounces of gold at Fruta del Norte over a 14-year mine life.
The company acquired Fruta del Norte in 2014 for $240 million from fellow Canadian miner Kinross Gold (TSX:K) (NYSE:KGC), which had to halt operations after being unable to reach an agreement with authorities regarding the terms for developing the asset.
The underground gold and silver mine, discovered in 2006, contains six of Lundin’s 29 mining concessions in Ecuador and covers 70,000 hectares of land.
Located in southeastern Zamora Chinchipe province, the 70,000-hectare Fruta del Norte is Ecuador’s largest mine and one of the biggest and highest-grade gold projects in the world currently in production.
