An asset outside of Ecuador and at the development stage are some of the criteria that Lundin Gold CEO Ron Hochstein listed if his company did a deal to acquire another asset.
Hochstein spoke to Kitco mid-September at the Gold Forum Americas 2023 held in Colorado Springs.
Lundin Gold (TSE:LUG) opened Ecuador’s Fruta del Norte mine in 2019, having acquired it five years earlier from fellow Canadian miner Kinross Gold. Lundin gold is expecting to produce between 450,000 - 485,000 ounces of gold in 2023 at an all-in sustaining cost of between $820 to $870. During the last quarter the company generated $132 million in free cash flow.
Being a single-asset company, Lundin Mining could be a takeover candidate, but it is also keeping an ear to the ground for acquisitions.
“M&A activity right now is like a head on a swivel,” Hochstein said. “We need to be looking forward and back.” He sees a development-stage asset as the most likely buying scenario.
“I would say that's our bull’s eye, then I think the outer ring would be feasibility or even a little earlier stage that we could help bring it along to feasibility. And then take it right through to construction because we could do that very quickly.”
While the company considers options, it is growing operations. Lundin is looking to expand Fruta del Norte through a combination of exploration and longer mine life. The company plans to increase throughput from 4,400 to 5,000 tonnes per day.
“Fruta del Norte maybe is just the tip of the iceberg as to what potentially is in that region of Ecuador,” said Hochstein.
Kitco Mining’s coverage of the Gold Forum Americas 2023 was sponsored by Metalla Royalty & Streaming Ltd.
0:00 Fruta del Norte
1:53 FDN potential
3:37 Ecuador election
6:19 Investor interest
8:40 M&A
13:54 Hopes and fears
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