Lundin Gold Reports First Quarter of 2021 Results

From this, net revenues, adjusted earnings1, and cash flow from operations of $140.0 million, $37.4 million, and $75.1 million, respectively, were realized.

Operational excellence is only one of our four pillars of value creation though, and as such, we continue to advance, on time and on budget, our throughput expansion program, the Fruta del Norte resource expansion program, and the recently commenced regional exploration program, with a drill now turning at the Barbasco target.

The Company is on track to meet its 2021 guidance of 380,000 to 420,000 oz of gold produced.

Revaluation of these obligations may result in considerable period-to-period volatility in the Company’s net income, comprehensive income, current and long term liabilities and do not necessarily reflect the amounts that will actually be repaid when the obligations become due.

As at March 31, 2021, Lundin Gold had cash of $94.4 million and a working capital balance of $57.6 million compared to cash of $79.6 million and a working capital balance of $56.6 million at December 31, 2020.

The Company expects to generate strong operating cash flow during 2021 based on its production and AISC guidance.

The health and safety of personnel at site is of paramount importance, and stringent procedures remain in place to minimize the impact of COVID-19 and related variants on the workforce.

During the first quarter of 2021, a connectivity project was launched in order to improve Internet infrastructure in communities surrounding Fruta del Norte and to provide teachers and children enrolled in local schools with the necessary equipment and training to facilitate online learning in light of local schools continuing to be closed due to the COVID-19 pandemic.

The Company, in partnership with two other mining companies, has committed to purchase and install an intensive care unit at the Yantzaza hospital in order to improve intensive care capabilities in the Province of Zamora Chinchipe.

This is being undertaken under the authority of the provincial government to replace the bridge that collapsed during the fourth quarter of 2020.

The regional exploration program is focused on two high priority targets, Barbasco and Puente-Princesa, to test for mineralization in a geological setting very similar to that of Fruta del Norte.

Guidance for 2021 remains unchanged with production of 380,000 to 420,000 oz of gold expected at Fruta del Norte based on an average head grade of 10.4 g/t and average gold recovery of 90%.

Engineering, procurement and construction are underway on the expansion program to increase the mill throughput from 3,500 to 4,200 tpd, which is expected to be completed before the end of 2021.

Furthermore, drilling has commenced on the Barbasco target as part of Company’s 9,000 metre regional exploration drilling campaign.

Lundin Gold, headquartered in Vancouver, Canada, owns the Fruta del Norte gold mine in southeast Ecuador.

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.

This news release refers to certain financial measures, such as average realized gold price per oz sold, cash operating cost per oz sold, all-in sustaining cost, operating cash flow per share, and adjusted net earnings, which are not measures recognized under IFRS and do not have a standardized meaning prescribed by IFRS.

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.

This press release contains forward-looking information in a number of places, such as in statements relating to estimates of gold production, grades and recoveries, expected sales receipts, cash flow forecasts and financing obligations, its capital costs and the expected timing of completion of capital projects including the south ventilation raise, the Company’s bridge over the Zamora River and the throughput expansion project, the timing and the success of its drill program at Fruta del Norte and its other exploration activities, the completion of construction and the Company’s efforts to protect its workforce from COVID-19.

Lundin Gold’s actual results could differ materially from those anticipated.

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