Gold price trades flat ahead of pivotal US election
Also on the radar this week is the Fed's interest rate decision on Thursday, with markets widely anticipating a quarter-point cut.
Canada’s Lundin Gold (TSX:LUG) said Monday it has begun underground development at its flagship Fruta del Norte gold project in Ecuador, on track to kick off production later this year.
A total of 4.5 km of underground mine construction has already been achieved, the miner said, while overall engineering is 85% complete and overall project growth has reached a 45% of progress.
Lundin Gold said it was preparing the first stages of transition to owner operations and its mining fleet has started to arrive at Fruta del Norte.
The company also noted the majority of large process plant mechanical equipment was now on the property, and that the first group of mining operators began the final part of their training program, which takes place on site.
Fruta del Norte, to be e Ecuador’s largest underground gold and silver mine, will begin production this year, churning out 4.6 million ounces of gold over a 15 year mine life.
“With 70% of our capital expenditure committed and detailed engineering nearly done, Fruta del Norte is on schedule to meet its target of producing first gold in the fourth quarter of this year,” Ron Hochstein, the company’s President and CEO, said in the update.
Fruta del Norte, discovered in 2006, is expected to produce to 4.6 million ounces of gold over a 15 year mine life.
Lundin has been developing the asset for almost two years, following an agreement with Ecuador’s government that allowed it to move ahead with the project.
The company acquired it in 2015 for $240 million from fellow Canadian miner Kinross Gold (TSX:K) (NYSE:KGC), which had to halt the project after being unable to reach an agreement with authorities regarding the terms for developing the asset.
The underground gold and silver mine, which will be Ecuador’s largest, encompassing six of Lundin’s 29 mining concessions, which cover 70,000 hectares of land.
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.
Early last year, Newcrest Mining (ASX:NMC) took a 14% stake in Lundin Gold, to gain access to Fruta del Norte.
Anglo American (LON:AAL) also landed in the South American country last year. Through a deal with Canadian Luminex Resources (TSX-V: LR), it plans to develop two copper and gold concessions there.
Currently, the nation’s emerging mining sector employs 3,700 people, but estimates the figure will rise to about 16,000 by 2020.
The projects boom, however, may be thwarted this year due to growing local opposition to the extraction of the country’s resources.
