Canada’s Lundin Gold (TSX:LUG) said Thursday it had been granted the two outstanding permits it required to move its $692-million Fruta del Norte gold project in Ecuador into production.
The Vancouver-based miner said that receiving the industrial water permit and administrative act guarantees it would achieve its goal of pouring its first gold before the end of this year, with commercial production expected in the second quarter of 2020.
Lundin, worth almost C$1.7 billion, has been developing the asset for almost two years, following a 2016 agreement with Ecuador’s government that allowed it to move ahead with the project.
The company acquired the project in 2014 for $240 million from fellow Canadian miner Kinross Gold (TSX:K) (NYSE:KGC), which had to halt operations after being unable to reach an agreement with authorities regarding the terms for developing the asset.
The underground gold and silver mine, which will be Ecuador’s largest, contains six of Lundin’s 29 mining concessions and covers 70,000 hectares of land. Discovered in 2006, Fruta del Norte is expected to produce 4.6 million ounces of gold over a 15 year mine life.
“The opening of Fruta del Norte is a turning point for the mining industry in Ecuador,” Keith Barron, who discovered the deposit and is now Aurania Resources’ chairman and chief executive said in a statement.
“For the first time in Ecuador’s history, gold mining will be carried out in a responsible, technically safe and sustainable way,” he added.
Ecuador has gained ground as a mining investment destination over the past two years, with top miners entering into joint ventures or investing in juniors to gain exposure to projects in the country.
Anglo American (LON: AAL) also landed in the South American nation through a deal with Canada’s Luminex Resources (TSX-V: LR). The company plans to develop two copper and gold concessions there.
Currently, Ecuador’s emerging mining sector employs 5,000 people, but estimates the figure will rise to about 16,000 by 2020.