2023 production estimated between 425,000 to 475,000
ounces
VANCOUVER, BC, Nov. 29,
2022 /CNW/ - Lundin Gold Inc. (TSX: LUG)
(Nasdaq Stockholm: LUG) (OTCQX: LUGDF) ("Lundin Gold" or the
"Company") is pleased to announce its 2023 guidance and
three-year gold production outlook. All amounts are in U.S. dollars
unless otherwise indicated. View PDF
Highlights:
- 2023 production is estimated between 425,000 to 475,000 ounces
("oz").
- Cash operating costs¹ and all-in sustaining costs[1] ("AISC")
for 2023 are expected to range between $700 and $760 and
$870 and $940 per oz gold sold, respectively.
- Total sustaining capital in 2023 is estimated at $45 to $55
million.
- 28,000 metres is planned to be drilled under the 2023 near mine
and regional exploration programs.
The Company's outlook for production, sustaining capital and
AISC for the next three years is provided in the table below.
|
2023
|
2024
|
2025
|
Gold Production
(oz)
|
425,000 –
475,000
|
450,000 –
500,000
|
465,000 –
515,000
|
Sustaining Capital ($
million)
|
45 – 55
|
25 – 35
|
45 – 55
|
Cash operating cost
($/oz)¹
|
700 – 760
|
650 – 710
|
640 – 700
|
AISC ($/oz)¹
|
870 – 940
|
780 – 850
|
800 – 870
|
1.
Gold/silver price per oz assumptions for the three years are
$1,650/$18.50, respectively.
|
Ron Hochstein, President and CEO
commented, "Now that the South Ventilation Raise has been
completed, the additional ventilation will allow us to increase the
rate of mining to 4,400 tonnes per day, to match the expected
throughput of the mill. At current gold prices and considering the
low cost nature of this mine notwithstanding inflationary pressure,
we look forward to continuing generating strong free cash flow for
years to come with a production forecast well in excess of 400,000
oz."
_________________________
|
1 See
Non-GAAP Financial Measures below.
|
2023 Guidance and 2023-2025 Outlook
Gold production at Fruta del Norte for 2023 is estimated to be
between 425,000 to 475,000 oz based on an average throughput rate
of 4,400 tpd. The head grade is estimated to average 9.67 g/t, with
fluctuations expected during the year as different sections of the
ore body are mined. Average mill recovery for the year is estimated
at 90%.
Cash operating costs are estimated to range between $700 and $760 per
oz of gold sold in 2023, with variability expected during the year.
AISC for 2023 is expected to range between $870 and $940 per
oz of gold sold, based on an assumed gold price of $1,650 / oz and silver price of $18.50 / oz. These reflect "steady-state"
operations with higher unit costs compared to 2022 due to mining
and milling ore with lower grade, inflationary pressures resulting
in increased costs of consumables and transportation, and higher
maintenance requirements as equipment ages.
Total sustaining capital in 2023 is estimated at $45 to $55 million
and will include the fourth tailings dam raise, a few items that
were not completed in 2022 such as a new warehouse, as well as new
projects such as a new sewage water treatment plant and several
efficiency improvements projects in the mine and plant.
The anticipated fluctuation in gold production over the three
years is principally due to expected variations in the grade of ore
mined and milled. Except for variations in gold price and possible
continuing inflationary pressure which impact cash operating cost
and AISC, the other significant factor affecting AISC is sustaining
capital which is expected to be higher in the years when a tailings
dam lift is planned (2023 and 2025).
Other 2023 Activities
Consistent with the dividend policy approved in Q2 2022, the
Company is planning to continue to pay dividends, moving to
quarterly dividends of at least $0.10
per share starting in March 2023
following release of the annual results.
Lundin Gold also expects to
continue its near mine and regional exploration programs and is
planning 28,000 metres of drilling utilizing a minimum of five rigs
in 2023 as compared to 22,500 metres in 2022.
The near-mine program will focus on underground and surface
drilling at or near Fruta del Norte. Indications from drilling in
2022 suggests significant potential for the extension of the Fruta
del Norte resources at depth as well as to east, west and south of
the current resource envelope. The 2023 near mine program is
estimated to cost $9.4 million and
intends to drill 15,500 metres. Drilling is aimed at confirming
indications of both a potentially larger Fruta del Norte
mineralized envelope and the existence of satellite deposits.
The regional program will focus on several exploration targets
located in the 16km long Suarez Basin, with the objective of
identifying another Fruta del Norte. The 2023 regional program is
estimated to cost $11.7 million and
will drill 12,500 metres.
Non-GAAP Financial Measures
This news release refers to certain financial measures, such as
cash operating costs and AISC, which are not measures recognized
under IFRS and do not have a standardized meaning prescribed by
IFRS. These measures may differ from those made by other companies
and accordingly may not be comparable to such measures as reported
by other companies. These measures have been calculated on a basis
consistent with historical periods. Please refer to the Company's
MD&A filed on SEDAR under the Company's profile at
www.sedar.com, pages 13 to 16, for the third quarter of 2022 for an
explanation of non-IFRS measures used.
Qualified Persons
The technical information relating to Fruta del Norte contained
in this News Release has been reviewed and approved by Ron Hochstein P. Eng, Lundin Gold's President and CEO who is a
Qualified Person under National Instrument 43-101.
About Lundin Gold
Lundin Gold, headquartered in
Vancouver, Canada, owns the Fruta
del Norte gold mine in southeast Ecuador. Fruta del Norte is among the
highest-grade operating gold mines in the world.
The Company's board and management team have extensive expertise
in mine operations and are dedicated to operating Fruta del Norte
responsibly. 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.
Additional Information
The information in this release is subject to the disclosure
requirements of Lundin Gold under
the EU Market Abuse Regulation. This information was publicly
communicated on November 29, 2022 at
2:00 p.m. Pacific Time 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 relating its 2023
production outlook, including estimates of gold production, grades
and recoveries, and its expectations regarding AISC, cash operating
costs, free cash flow and capital costs, benefits of increased
ventilation in the mine, plans to declare and pay dividend and the
Company's exploration plans and success. 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 21, 2022, 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: risks associated with
the Company's community relationships; risks related to
political and economic instability in Ecuador; risks related
to estimates of production, cash flows and costs; the impacts of a
pandemic virus outbreak; risks inherent to mining operations;
failure of the Company to maintain its obligations under its debt
facilities; shortages of critical supplies; control of the
Company's largest shareholders; risks related
to Lundin Gold's compliance with environmental laws and liability
for environmental contamination; the lack of availability
of infrastructure; the Company's reliance on one mine;
exploration and development risks; risks related to the
Company's ability to obtain, maintain or renew regulatory
approvals, permits and licenses; uncertainty with the tax regime
in Ecuador; risks related to the Company's workforce and its
labour relations; volatility in the price of gold; the
reliance of the Company on its information systems and the risk of
cyber-attacks on those systems; deficient or vulnerable title
to concessions, easements and surface rights; inherent safety
hazards and risk to the health and safety of the Company's
employees and contractors; the imprecision of Mineral Reserve
and Resource estimates; key talent recruitment and retention of
key personnel; volatility in the market price of the Company's
shares; measures to protect endangered species and
critical habitats; social media and reputation; the cost
of non-compliance and compliance costs; risks related to
illegal mining; the adequacy of the Company's insurance; risks
relating to the declaration of dividends; uncertainty as to
reclamation and decommissioning; the ability of Lundin Gold to ensure compliance with
anti-bribery and anti-corruption laws; the uncertainty
regarding risks posed by climate change; limits of disclosure
and internal controls; security risks to the Company, its
assets and its personnel; the potential for litigation;
and risks due to conflicts of interest.
SOURCE Lundin Gold Inc.