Fruta del Norte Gold Project, Ecuador

Fruta del Norte (FDN) Gold Project

The Fruta del Norte (FDN) Gold Project is located approximately 9km south-west of the village of San Antonio, within the Cordillera del Cóndor region of Zamora-Chinchipe province, Ecuador, and approximately 80km east-northeast of Loja.

The project is 100% owned by Lundin Gold through its subsidiary Aurelian Ecuador (Aurelian). It hosts three concessions, namely Princesa, Emperador and La Zarza, covering an area of approximately 5,000ha, and forms part of a larger property owned by Aurelian, which hosts 33 concessions and an area of approximately 75,000ha.

The feasibility study for the project was completed in June 2016, construction works are expected to start in mid-2017, first production is scheduled for 2020 and full production will be reached in 2021.

The overall investment to bring the Ecuadorian gold project into production is estimated to be $669m. The initial mine life of the project is estimated at 13 years.

The project is expected to generate approximately 2,000 construction jobs and 900 long-term jobs.

Fruta del Norte gold project geology and mineralisation

The FDN deposit is characterised as an intermediate-sulphidation epithermal gold-silver deposit hosted by andesites of the Misahuallí Formation and feldspar porphyry intrusions. The ore body measures approximately 1,670m along strike, 700m down dip, and between 150m and 300m-wide.

The mineralisation is primarily microscopic in nature and is associated with sulphide and carbonate stockwork veining and brecciation, measuring between 100m and 150m in the central and northern parts of the system.

FDN gold project reserves and production

As of April 2016, the project was estimated to hold probable mineral reserves of 15.49Mt grading 9.67g/t Au and 12.7g/t Ag, containing 4.81Moz Au and 6.34Moz Ag respectively.

The project is estimated to produce approximately 4.4Moz of gold and 5.2Moz of silver during its initial mine life, using an average gold recovery rate of 91.7% and average silver recovery rate of 81.5%. The average annual gold production rate is estimated to be 340,000oz.

Mining and processing at Lundin Gold's flagship project

The mining method envisaged for the project is the underground mining method integrating transverse open blast hole stoping method followed by loading and hauling.

The processing facility will incorporate gravity, flotation, leach (GFL) flowsheet. It will primarily be equipped with an semi-autogenous (SAG) circuit, a cyclone cluster in a closed circuit, a gravity concentrator, a ball mill, an intensive leach reactor (ILR), an electro-winning circuit, a flotation circuit integrating three stages of flotation and regrind, a leach circuit, carbon-in-leach (CIL) tanks, a carbon elution and regeneration circuit, and a smelter.

Infrastructure for the Ecuadorian gold mine

The project benefits from the presence of existing infrastructure, including an office, accommodation facilities for 250 people, a warehouse, water and wastewater treatment facilities, a helicopter pad, access roads, a 1MW power generator, and communications, medical, and fuel and waste storage facilities.

"The project is expected to generate approximately 2,000 construction jobs and 900 long-term jobs."

The project site is accessible via a 40km gravel road connecting the town of Los Encuentros, and further connects with the city of Loja via a 150km-long paved highway. The access road will be upgraded as part of the project.

A permanent accommodation camp with a capacity for 830 people will be constructed alongside a temporary accommodation camp for 1,184 people.

The electricity required for the project will be sourced from the Bomboiza substation and conveyed via a 230kV double-circuit transmission line to a new substation at El Pindal, owned and operated by CELEC EP Transelectric. The El Pindal substation will further feed the project's new substation via a single-circuit, 230kV transmission line.

Water will be sourced from the neighbouring creeks and stored in storage ponds at the project site.

Other major infrastructure for the project will include a tailings storage facility (TSF), waste dumps, communications systems, six new water treatment plants, an airstrip, and buildings housing offices, a truckshop, electrical room and control room, a workshop, a canteen, a medical room, a fire station, and a laboratory.

The offsite infrastructure for the project will include a guard house, a light vehicle shop, a warehouse and laydown area, and an office building, which are proposed to be located approximately 12km from the project site.

Key players involved

The feasibility study for the project was compiled by Amec Foster Wheeler in collaboration with Klohn Crippen Berger (KCB), MM Consultores, NCL Ingeniería y Construcción (NCL), and Roscoe Postle and Associates (RPA).