Business Enquirer Issue 108 | Luminex Resources | Nov'22

Striking Gold in Ecuador

PROJECT DIRECTED BY WRITTEN BY Gary Smith

Laura Watling

Scott Hicks, VP Corporate Development & Communications, Luminex Resources

Striking Gold in Ecuador

Part of the Lumina Group, Luminex Resources is a Canadian based precious and base metals exploration and development company. Its current focus is the Condor Au-Cu project in Ecuador. With continual development of the project, it’s an exciting time for both Luminex and its investors. Vice President Corporate Development and Communications, Scott Hicks, discusses the project with Business Enquirer.

Lumina Group

Themain mining and exploration project, Condor, managed by Luminex Resources, spans a large swath of the Zamora-Chinchipe province in Ecuador, South America. Luminex is exploring for additional gold and copper on the 10,000-hectare land package.

The project is drilling four priority targets this year - Los Cuyes high-grade, Shallow Camp high-grade, El Hito North and Prometedor to complement its existing 6.6-million-ounce gold resource.

In addition, it has two copper projects that are being earned-in on and six other concession packages around the Condor Cordillera belt.

“Luminex’s team is working with its third government administration since Ecuador opened up the mining industry in 2014. The sector has continued to expand and improve over the last 9 years,” explained Mr Hicks, “our business model is to de-risk early-stage projects such as Condor, so that larger mining companies can acquire and build them in the future”.

Across the Condor site, around 135,000 meters of drilling has been undertaken (as of Q2 2021). This has defined five deposits and has outlined various high priority target areas.

The current Condor resource has 2.3Moz of indicated gold resource, with a further 4.2Moz of inferred resource. In addition to gold, the area has a substantial amount of silver and copper by-products.

“The goal of the 2022 Condor North drilling is to enhance the existing PEA area,” said Mr Hicks, “our plans are to expand the mineable resource by stepping out on the shallow Camp high-grade and Los Cuyes high-grade underground targets”.

Discoveries in the Los Cuyes area are particularly meaningful for Luminex. High grade gold and silver mineralisation were

Lumina Group

found in a previously untested area in the middle of where the 2021 PEA was completed.

“The higher-grade Camp underground deposit depletes by year eight of the 12-year mine plan outlined in the 2021 PEA. The potential addition of a second higher grade underground deposit around Los Cuyes could maintain a higher rate of production and extend the overall mine life” said Mr Hicks, referencing CEO Marshall Koval.

World-class partners

Luminex’ business model relies on having strong relationships with its key mining partners.

“We have two, world-class partners operating across our two earn-in copper projectsPegasus and Orquideas,” shared Mr Hicks, “This partnership strategy has seen over $35 million invested by our partners since 2018”.

Mining heavyweight Anglo American has a $50 million work agreement on Pegasus A and B, over seven years. On completion, Anglo American will own 60% of the site, with the opportunity to increase its ownership if it invests more capital to take the project to a construction decision. This is an expansive project, with eight copper porphyry targets already developed on only half of the land package.

JOGMEC (the Japanese Oil, Gas and Metals National Corporation) is drilling five holes for 2,500m at Orquideas. Upon completion of a $7 million work commitment, JOGMEC can earn 70% ownership of the site.

Developing communities

Luminex owns 98.7% of Condor, with the remaining 1.3% owned by the pension fund for Ecuador’s armed forces personnel.

“CSR is crucial within our sector, to ensure mining is a responsible industry,” said Mr

Hicks, “Luminex’ has numerous local access agreements, which provide benefits to the communities and provides us with the required social license to operate”.

Luminex’ CSR is underpinned by four pillars - Employment, Sustainable Development, Health, and Education.

“In 2020-2021 we created over 130 local rotational jobs, and we have 44 permanent employees hired from local communities,” shared Mr Hicks.

In addition, Luminex keeps its supply chain local where possible. “We purchase goods and services from more than 150 local companies, including locally manufactured PPE during the pandemic,” said Mr Hicks.

Despite the challenges of COVID-19, it offered Luminex the opportunity to provide vital support within its health pillar, providing COVID-19 aid. “We also worked with the

Marshall Koval, CEO, Luminex Resources

Lumina Group

Ecuadorian Ministry of Health for the roll out of COVID-19 vaccinations for our workforce,” Mr Hicks continued.

As part of its project, Luminex has made significant investment into local infrastructure. “We’ve supported the local community by improving water supply and distribution systems as well as making improvements to access roads,” shared Mr Hicks.

The organisation also plays a role in education in the community, working in collaboration with Ecuador’s Ministry of Agriculture to provide technical training to local young people.

A dynamic team

Luminex has a lean Canadian operation, with eight employees over the three businesses of the Lumina Group: Luminex Resources, Lumina Gold and Strategic Resources.

“Within the Canadian operation, we have colleagues with a range of mostly corporate experience,” explained Mr Hicks, “for example, I have a banking background, so I see business

from a financial analysis and capital markets perspective. Founder Ross Beaty brings strategic thinking and substantial financial backing, whilst Marshall Koval (CEO) and Leo Hathaway (Senior Geologist) have years of technical project de-risking experience and geological experience, respectively. It’s an interesting daily dynamic”.

Operations on the ground, however, are led by President, Diego Benalcazar, whom Mr Hicks pays considerable mention to.

Mr Benalcazar has over 25 years’ experience in mineral exploration, mining property evaluation and acquisitions throughout Latin America and the Caribbean. Previously, he held the position of President and member of the Board of Directors of the Ecuadorian Chamber of Mines, and has actively represented the mining industry in discussions with Government authorities.

“Not only is Diego incredibly experienced in the industry, as an Ecuadorian he understands the communities in which we work - both from a cultural and environmental perspective. His knowledge is invaluable,” explained Mr Hicks.

The team at Camp Condor

Lumina Group

Exciting opportunities on both sides

The exploration and development of Condor is an exciting time for Luminex; however, it doesn’t come without its challenges.

“Much like the rest of the world, Ecuador is facing a cost-of-living crisis. The government is working to improve the lives of all citizens by increasing investment in the country while supporting the most affected communities” shared Mr Hicks, “our challenge in the capital markets is to demonstrate that Ecuador is a country serious about bringing in business and investment that will support the country over the longer-term”.

Mr Hicks highlighted that the Ecuadorian

government’s relationship with the mining industry has improved dramatically over the last decade.

“With responsible mining now a vital part of the economy, the government is far more supportive and keen for investment”

Luminex continues to make interesting discoveries in the region, with potential for large-scale future mining projects.

“In the next few years we will undertake additional studies, look to de-risk key technical items and work on new discoveries. It really is an exciting time to invest,” concluded Mr Hicks.

www.luminexresources.com

info@busenq.com www.busenq.com