Ron Hochstein, President & CEO, Lundin Gold

Lundin Gold has demonstrated that responsible mining can take place in Ecuador with great benefits in terms of development and serving as an example to others.

• Interview

After its arrival in Ecuador in 2014, Lundin Gold started gold production from its Fruta del Norte project in record time. What were the contributing factors to this success and the main highlights of this journey?

Lundin Gold was able to take its Fruta del Norte project from the start of a feasibility study to construction in five years, with 4Q2019 marking the start of the production phase. A five-year cycle is not typical in the mining industry, as projects tend to take a longer time to reach the production phase from the start of a feasibility study. Our ability to bring stakeholders together was key to this achievement. Lundin Gold found efficient and constructive ways to work not only internally, but also with the government, communities, local suppliers, academia, and industry peers. We were also pleased with the skills of the Ecuadorian workforce and our ability to source a significant amount of materials for the project in Ecuador. This is also considered a great highlight in Ecuador’s history, because it is a strategic project in a country where there was no large-scale mining before. Over the past five years, Lundin Gold has been able to demonstrate that responsible mining can happen in Ecuador with great benefits in terms of development and the highest standards in social and environmental responsibility. Moreover, the project has been able to move forward following a project financing structure, being one of the few cases in the country and serving as an example to other large projects that can take place in Ecuador in the mining industry or other strategic sectors.

To what extent will Fruta del Norte open the doors for an increasing number of industrial mining projects in Ecuador?

Miners have to follow the highest standards of human rights, economic development, and environmental protection. Lundin Gold is fully aware everyone would look at Fruta del Norte and that it could serve as a preliminary step to build a mining industry in Ecuador. We are at the forefront of this building experience, and transparency has been our mantra over the years. For example, we opened our doors to inspection for every candidate running in Ecuador’s latest elections. After this experience, Ecuador definitely has the capacity to increase the number of large mining projects as long as they abide by the highest standards, and this should be done in order to maximize the impact mining can have on the country’s development.

Given the concerns about water availability, what is Lundin Gold’s approach to responsibly managing this resource?

Water is vital for mining around the world, and its management, minimal use, and recycling is a fundamental principle of modern mining. Ecuador is to some extent a special case. There are concerns that mining has an impact on water, which is primarily related to artisanal mining. There is, therefore, a tendency to think that large-scale mining magnifies the need for water. However, protection of water sources and minimizing its use are a fundamental principle of responsible mining around the world.

The Fruta del Norte deposit is one of the largest highest grade undeveloped gold deposit in the world. How is the level of production of gold expected to evolve over the project's life spam?

Having started operations in 4Q2019, 2020 will be a ramp-up year in which we will produce about 250,000-270,000oz of gold. The subsequent two years will have production levels closer to 400,000oz. The life of the mine averages 310,000oz of gold per year over 15 years. Our costs will be extremely low because of the mining and processing methods and the high grade of the deposit. ✖