Lumina issued $24M in shares for Cangrejos gold-copper project, debt repayment

Lumina Gold (TSXV: LUM) has raised $19 million to advance its Cangrejos gold-copper project in Ecuador, where work is under way on a prefeasibility study.

In addition to closing a private placement of 31.6 million common shares priced at $0.60 each, it also issued additional shares worth $5.2 million to Ross Beatty in exchange for retiring that amount of debt. He now has a 19.8% interest in the company.

The company will use the net proceeds of the offering for infill drilling, stepout drilling and prefeasibility work at Cangrejos. Lumina owns 100% of the project, located 40 km from the port of Puerto Bolivar.

A preliminary economic assessment for Cangrejos was completed in June 2020. It included updated resource number for two deposits using a 0.3 gram gold-equivalent cutoff grade.

The deposit hosts an indicated resource of 469.7 million tonnes grading 0.59 gram gold per tonne and 0.12% copper (0.77 gram per tonne gold-equivalent), for 8.9 million oz. of gold and 1.2 billion lb. of copper. The inferred resource is 254.9 million tonnes grading 0.43 gram gold per tonne and 0.08% copper (0.55 gram per tonne gold-equivalent), for 3.5 million oz. of gold and 472 million lb. of copper.

The Gran Bestia deposit has an indicated resource of 101.1 million tonnes grading 0.46 gram gold per tonne and 0.1% copper (0.58 gram per tonne gold-equivalent), for 1.5 million oz. of gold and 180 million lb. of copper. The inferred resource is 245.5 million tonnes grading 0.4 gram gold per tonne and 0.1% copper (0.50 gram per tonne gold-equivalent), for 3.1 million oz. of gold and 368 million lb. of copper.

The preliminary economic assessment examined a project with a 25-year mine life with average annual production of 366,000 oz. of gold and 46 million lb. of copper. An open pit mine and a 40,000-tonne-per-day mill would operate in the first five years of production, and capacity would be expanded to 80,000 tonnes per day for the remaining years. All-in sustaining costs, net of byproducts, were estimated to be US$604 per oz. of gold.

The Cangrejos project has a net present value with a 5% discount of $1.6 billion and an internal rate of return of 16.2%. Initial capital costs, including working capital and refundable value added tax, is expected to be US$1 billion.