Lundin Gold (TSX: LUG; OTC: LUGDF) has discovered a new mineralized zone south of its rich Fruta Del Norte (FDN) mine in southeast Ecuador, with recent drilling also confirming that the deposit continues at depth below the current resource.
Highlights from the surface drilling completed in last year’s third quarter include 5.11 grams gold per tonne over 30.3 metres from a depth of 267.7 metres, and 9.79 grams gold over 14 metres from 284 metres in hole FDN2022-009, Lundin said in a news release Thursday.
Hole FDN2022-006 cut 3.99 grams gold over 4.8 metres from 181.7 metres, and 4.4 grams gold over 8.1 metres from 213.9 metres.
Another set of holes, drilled under the southern part of the FDN resource, returned 4.11 grams gold per tonne over 23 metres from 197.7 metres depth, and 6.03 grams gold over 10 metres from 202.7 metres in hole UGE-DD-22-008.
Hole UGE-DD-22-005 cut 3.53 grams gold over 44.9 metres from 134.8 metres, including 5.25 grams gold over 12.9 metres from 134.8 metres, and 4.32 grams gold over 15 metres from 164.7 metres depth.
Ron Hochstein, president and CEO of Lundin Gold said the results highlight the potential of the mostly unexplored area around the FDN resource envelope.
“Results demonstrate the significant potential of the epithermal system beyond the known limits of the FDN deposit and support our belief that the near-mine program will enable expansion of current mineral resources,” he said. “To advance this objective, we are increasing our near-mine exploration efforts with a minimum of 15,500 metres of drilling in 2023 compared to 8,600 metres drilled in 2022.”
Lundin acquired the high-grade Fruta del Norte project from Kinross Gold (TSX: G; NYSE: KGC) in 2014, negotiated an investment agreement with Ecuador’s government in 2016, and developed the project. Lundin achieved commercial production at FDN in early 2020. The exploration results come just weeks after the company reported it beat its production guidance at FDN for the second year in a row, producing 476,329 oz. last year versus guidance of 460,000 ounces.
Most of the nine surface holes reported were drilled between 200 and 900 metres south of the FDN mineral resource boundary, and intercepted wide hydrothermal alteration zones that are similar to those in the FDN deposit. The zone remains open at depth, along strike to the north and to the south.
The seven holes drilled under the FDN resource focused on the continuity of the deposit and its west structure at depth. Initial results suggest new zones where the deposit remains open at depth, confirm the deposit’s continuity at depth and show the same mineral hydrothermal alteration related to mineralization in the southern extension of FDN’s mineral resource.
The Vancouver-headquartered miner plans to expand surface and underground drilling this year to continue exploring at depth, aiming for at least 15,500 metres of drilling at a cost of about $9.4 million.
Lundin Gold shares traded at $15.04 apiece in Toronto on Friday afternoon, in a 52-week window of $7.80 and $16. It has a market capitalization of $3.5 billion.