What is North Fruit when restarting trades after Covid closes?
To say that 2020 has been a roller coaster would be an understatement. We we were able to reach commercial production near the end of February, ahead of our schedule. The mill and mine were ramping up very well, but on March 22nd we had to shut down operations due to covid-19. The government wanted us to continue to operate, but we made the decision to shut down primarily because of local fears about coronavirus. We only kept a small workforce at site of around 350 people.
We restarted operations in July 2020 and expect to produce between 150,000 and 170,000 ounces of gold in the part of the time of 2020, for a total of 200,000 to 220,000 ounces this year. Our AISC is expected to be between $770 and $850/oz. This is higher than our AISC over the life of the mine, which is $621, but from 2021 we will be able to reduce costs.
How do you help Zamora Chinchipe Covid-19 province?
To date, we have invested approximately $230,000 in a number of initiatives, such as delivering food packages to endangered families, distributing medical materials to the Ministry of Health and other local government organizations, and donating disinfection devices and medical supplies. army and police. We have also donated a new ambulance to the local canton, which is adapted to transfer covid-19 patients.
What are the advances on the operations and exploration fronts?
We have a lot of paintings in front of us. We are operating at a ventilation elevation that will be very vital to our 2021 mining production. In addition, we are launching our cellulose filling plant in the third quarter of 2020, while we also want to complete the first lift of our relay dam. We are also conducting engineering studies to learn about the economic feasibility of extending the volume of our mine and plant to 4,000 or 4,500 tons steadily with day (tm/d).
The other side we’re comparing is the expansion of exploration. if you look at Aurelian’s first resource, it’s thirteen million ounces in Northern Fruit. It has been reduced, but now the short-term opportunity is to drill the filling and convert some of our designated resources into reserve. Our likely booking lately represents only 67% of our indicated resource. Besides, we have a very giant terrain and there is great potential here. Our main objective, Barbasco, is close enough to North Fruit, so your ore can be transported and processed at the existing facility. Any further deposits further south would likely require its own crushing and relay infrastructure.
Beyond an accumulation in Lundin Gold shares, how does the company gain advantages from a higher price of gold?
When we announced that we closed, our inventory was quoted at around C$8.35 and, prior to the restart of inconsistent operations, our inventory was north of C$12, so we climbed to nearly 50% of the suspension. What drives this is the value of gold, however, compared to our peers, we have also achieved better results. The bank’s analysts are talking about a long-term gold value of $2,000 and $3,000 consistent with the ounce. We cannot know if this will become a truth and we seek to function at the lowest cost imaginable. Our assumption of value in the feasibility review was $1,250/oz, so if the value continues to rise, shareholders can see profits in terms of dividend policy, we would also focus on repaying our debt much faster. The component of continuous financing is one hundred percent similar to production, however, the steady increase with the value of gold would make it more exciting for us to buy the flow again. We have two functions to do that; 2024 and 2026.
The industry has not sought to locate elephant gold deposits in recent times. Why do you think this is?
By definition, large and easy-to-find deposits have been found. In addition, when costs are falling, other people keep their horns and, in relation to that, we have noticed a lack of interest from investors in junior exploration. That said, there are still prospects for elephant deposits, and this perspective is here in Ecuador, a country that has not been on the radar of corporations for many years. Fruta del Norte is possibly one of the discoveries of the last 20 years, and the prospect of other discoveries like this is here in Ecuador.
Fruta del Norte is a breakthrough for the Ecuadorian mining industry. What can the government do to attract new investment?
From the beginning, we knew that all eyes were on us, so we had to expand Fruit of the North responsibly, protecting the environment, involving local communities and creating sustainable expansion. What the government wants to do now is reopen the country’s cadastral formula and explain the consultation procedure to be implemented. Ecuador has acceded to ILO Convention 169, but has not yet implemented the applicable legislation, given the huge number of indigenous communities throughout the country. Second, environmental permits want to be more effective; we’ve been waiting for our exploration permits for almost two years.
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(This article was first published in Global Business Reports)