VANCOUVER, June 25, 2019 /CNW/ - Lundin Gold Inc. ("Lundin Gold" or the "Company") (TSX: LUG, Nasdaq Stockholm: LUG) is pleased to announce that it has begun mining of its first production stope at its Fruta del Norte gold project ("Fruta del Norte" or the "Project") in Ecuador. Construction of the process plant and tailings facility continue on schedule with commissioning of the process plant to begin in the third quarter of this year.
"Fruta del Norte reached another important milestone on schedule. At the end of May overall construction progress was 73% complete and 88% of the Project's capital expenditure was committed. The team continues to make great progress as we head towards our first gold pour later this year," said Ron Hochstein, Lundin Gold's President and CEO.
Underground mine development reached 7.3 kilometres ("km") as at May 31, 2019, versus a target of 7.1 km. Owner's mine crews started mining the first transverse long hole production stope on June 16, 2019 and owner mining is planned to continue to ramp up with additional crews being added as more production stope faces become available.
Critical path work on development to the South Vent Raise was 74 days ahead of plan at the end of May. Raise bore equipment is in country and is being transported and assembled, with drilling of the pilot hole expected to commence in early July. The first underground paste backfill delivery hole has also been completed.
The process plant reached 80% completion at the end of May and all major pieces of process equipment have been installed. Wet Commissioning of the initial systems is expected to start in early July and continue throughout the third quarter of this year. The majority of process plant operations and maintenance staff have been hired and will participate in the commissioning process.
The powerline was 88% complete at the end of May, and agreements have been reached on all easements required to complete its construction. Cable stringing is at 65% completion and the Bomboiza substation construction reached 40% completion at the end of May. The Project's power supply system remains on target for energization before hot commissioning later in the third quarter of this year.
Tailings Storage Facility
Tailings dam construction has reached the elevation required for tailings systems commissioning to begin. Work is continuing to progress on schedule to reach the final starter dam elevation required for operations.
Second Draw from Senior Secured Debt Facility (the "Facility")
On June 25, 2019, the Company drew a further US$142 million from its US$350 million Facility for a total of US$301 million drawn to date. The next draw is anticipated to occur later in the year as the Project nears its production ramp up stage.
About Lundin Gold
Lundin Gold, headquartered in Vancouver, Canada, is developing its wholly-owned Fruta del Norte gold project in southeast Ecuador. Fruta del Norte is one of the world's largest, highest-grade gold projects currently under construction. The Company's board and management team have extensive expertise in mine construction and operations, and are dedicated to advancing this project through to first gold production in the fourth quarter of this year.
The Company operates with transparency and in accordance with international best practices. Lundin Gold is committed to delivering value to its shareholders, while simultaneously providing economic and social benefits to impacted communities, fostering a healthy and safe workplace and minimizing the environmental impact. The Company believes that the value created through the development of Fruta del Norte will benefit its shareholders, the Government and the citizens of Ecuador.
The information in this release is subject to the disclosure requirements of Lundin Gold under the EU Market Abuse Regulation. This information was submitted for publication June 25, 2019 at 3:30 p.m. PT through the contact persons set out below.
Caution Regarding Forward-Looking Information and Statements
Certain of the information and statements in this press release are considered "forward-looking information" or "forward-looking statements" as those terms are defined under Canadian securities laws (collectively referred to as "forward-looking statements"). Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, identified by words or phrases such as "believes", "anticipates", "expects", "is expected", "scheduled", "estimates", "pending", "intends", "plans", "forecasts", "targets", or "hopes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "will", "should" "might", "will be taken", or "occur" and similar expressions) are not statements of historical fact and may be forward-looking statements.
By their nature, forward-looking statements and information involve assumptions, inherent risks and uncertainties, many of which are difficult to predict, and are usually beyond the control of management, that could cause actual results to be materially different from those expressed by these forward-looking statements and information. Lundin Gold believes that the expectations reflected in this forward-looking information are reasonable, but no assurance can be given that these expectations will prove to be correct. Forward-looking information should not be unduly relied upon. This information speaks only as of the date of this press release, and the Company will not necessarily update this information, unless required to do so by securities laws.
This press release contains forward-looking information in a number of places, such as in statements pertaining to the progress of the development, construction and operation of the Project, improvements to site logistics and completion of site and powerline infrastructure, the availability of financing and the timing of first gold and commercial production. There can be no assurance that such statements will prove to be accurate, as Lundin Gold's actual results and future events could differ materially from those anticipated in this forward-looking information as a result of the factors discussed in the "Risk Factors" section in Lundin Gold's Annual Information Form dated March 27, 2019, which is available at www.lundingold.com or on SEDAR.
Lundin Gold's actual results could differ materially from those anticipated. Factors that could cause actual results to differ materially from any forward-looking statement or that could have a material impact on the Company or the trading price of its shares, include: receipt of regulatory approvals, risks associated with the Company's community relationships; risks and hazards inherent in mining and processing; lack of availability of or interference with infrastructure; risks related to Lundin Gold's compliance with increasingly strict environmental laws and liability for environmental contamination; risks related political and economic instability in Ecuador; deficient or vulnerable title to mining concessions and surface rights; risk to shareholders of dilution from future equity financings; failure to maintain its obligations under its debt facilities; shortages of critical resources, such as skilled labour and supplies, consumables and equipment; inherent safety hazards and risk to the health and safety of the Company's employees and contractors; volatility in the price of gold; the cost of compliance or failure to comply with applicable laws; the timely receipt of regulatory approvals, permits and licenses; risks associated with the performance of the Company's contractors; the imprecision of Mineral Reserve and Resource estimates; dependence on key personnel; volatility in the market price of the Company's shares; the potential influence of the Company's largest shareholders; uncertainty with the tax regime in Ecuador; measures required to protect endangered species; exploration and development risks; the Company's reliance on one project risks related to artisanal and illegal mining; the reliance of the Company on its information systems and the risk of cyber-attacks on those systems; the ability to obtain adequate insurance; uncertainty as to reclamation and decommissioning; the uncertainty regarding risks posed by climate change; the ability of Lundin Gold to ensure compliance with anti-bribery and anti- corruption laws; the potential for litigation; and limits of disclosure and internal controls.
SOURCE Lundin Gold Inc.