Lundin Gold stock rises as it beats production guidance for second straight year

Lundin Gold (TSX: LUG; OTCQX: LUGDF), which owns and operates one of the world’s highest grade gold mines in southeast Ecuador, has exceeded its production guidance for the second year in a row.

Total gold production for 2022 came to 476,329 oz., exceeding the high end of the company’s 2022 guidance of 460,000 oz., according to operating results for the fourth quarter of 2022, the Vancouver-based company reported on Tuesday. 

Fourth quarter production from last year was 121,139 oz. at the flagship Fruta del Norte mine.

“We continue to push the boundaries of what Fruta del Norte is capable of, and noteworthy improvements have been made across the board as compared to last year,” Ron Hochstein, president and CEO of Lundin Gold, said in a news release.

“Our average throughput of 4,574 t/d this fourth quarter is proof that there is a lot more we can get out of Fruta del Norte, and I’m particularly excited to continue building on our successes in 2023,” he added.

Of the total quarterly gold production, 78,756 oz. were produced as a concentrate and 42,383 oz. as doré. During the same quarter in 2021, the company produced 107,915 oz. of gold.

In Q4 2022, the Fruta del Norte mill processed approximately 420,838 tonnes at an average throughput rate of 4,574 tonnes per day; the average grade of ore milled was 10 grams per tonne, and average recovery was 89.6%.

The Fruta del Norte project was first acquired by Lundin Gold in late 2014, eight years after its original discovery by Aurelian Resources. Construction began in 2017 and first gold was poured in 2019.

Commercial production began at Fruta del Norte in February 2020. Over an estimated 13-year life, the underground mine is expected to have average production of 340,000 oz. per year, based on its current throughput capacity of 4,200 tonnes per day.

Shares of Lundin Gold shot up more than 5% by Wednesday afternoon in Toronto, following the guidance beat and reaching $14.89 apiece. Its shares have traded in a 52-week window of $7.80 and $14.73. The company’s market capitalization sits at $3.5 billion.