Lundin Gold by North American Constructors Journal

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Lundin Gold:

Committed to Community Success and Sustainable Mining Lundin Gold of Vancouver, British Columbia and Quito, Ecuador has a sole objective â&#x20AC;&#x201C; the development of the Fruta del Norte gold project in southeast Ecuador. Written by Kevin Doyle Produced by Stephen Marino

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stablished in December 2014, Lundin Gold of Vancouver, British Columbia and Quito, Ecuador has a sole objective – the successful development of the Fruta del Norte gold project in southeast Ecuador.

Lundin Gold | 4 Fruta del Norte Employees

Discovered by Aurelian Resources in 2006, Fruta del Norte is one of the highest-grade and largest gold projects under construction in the world today. Lundin Gold purchased the dormant asset from Kinross in 2014 for $240 million and is focused on advancing this project through to first gold production in 2019. Site construction began in 2017 after Lundin Gold signed all the necessary agreements with the Ecuadorian government and completed a feasibility study. Fruta del Norte is one of the major mines now being developed and its high-grade deposit holds probable reserves of 4.9 million ounces of gold as well as 6.88 million ounces of silver. It is anticipated that first gold will be extracted in the fourth quarter of 2019 with an average annual production expected to be 300,000 ounces of gold and 394,000 ounces of silver over the 15-year life of mine. Lundin Gold is a member of the Lundin Group of Companies and the Lundin family is a significant investor in this endeavour. Still, when Lundin Gold launched in January 2015, President

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and CEO Ron Hochstein was its single employee. “We hired 36 of the former Kinross employees who had been working on the project. Today we are at 1200 employees with 92 percent of the staff being Ecuadorian. It’s an exciting time,” says Hochstein, who has been with the Lundin Group for more than 20 years. Dave Dicaire, Vice President of Projects, points out that resumption of the project has revitalized the region. “Kinross set a lot of good foundations in the community. So when we came

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in we were able to leverage off of that. The community was excited to see the project re-start because they understood the benefits. We have a big impact on local employment and procurement and in our immediate area of influence, we are creating employment for approximately 25 percent of the population,” Dicaire says. Hochstein stresses that the company is committed to leading the development of this new industry in Ecuador. “The pressure of being the first one

here and having a lot of people watching what we do is exciting. There is tremendous geological potential here and we are setting the stage for the mining industry in Ecuador. We’re setting the bar for the rest of the industry.

Safety: Priority One Dicaire’s extensive professional background in South America is central to driving the company’s safety culture. “We invest heavily in HSE training and bring it to the forefront. Executive

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According to Hochstein, every day begins with safety circle calisthenics and the safety message of the day. “Safety delivers value. Everything we do is about how to do things safer, smarter and more efficiently,” he notes.

Responsible Operations The company surpassed 2.2 kilometers of underground mine development in June 2018. Overall engineering stands at 48 percent complete and overall construction at 21 percent complete with the project on budget and on schedule. Construction highlights include: • New access road 70 percent complete • Process plant clearing and mass excavation substantially complete • Process plant SAG and ball mill concrete foundations poured • River road completed, significantly improving site logistics • First major ponds for site water management system completed • Powerline contractor mobilizing to start construction later this quarter • 1,000-person construction camp completed

In addition to working safely, the company is committed to sustainability and engaging local communities on issues they have identified as priorities. “Sustainability will always be a part of our culture. There isn’t a lot of mining history in Ecuador, so we need to share with local stakeholders our approach to bringing community benefits and environmental stewardship. It is absolutely critical to show that mining can be done responsibly,” Hochstein says. “You have to be more than a visitor, you have to be part of the community. Ore in the ground is worth zero to the country, so we are creating wealth for the country, its citizens and our shareholders.” Most future jobs in the mine and plant will require, at a minimum, a high school education. The company has developed an array of educational and training programs that include

“

You have to be more than a visitor,

you have to be part of the community. Ore in the ground is worth zero to the country, so we are creating wealth for the country and the shareholders.

“

management places great emphasis on making safety first,” he says. “We have a Visible Leadership Program where we identify leaders in safety and train them for the field. Many members of management are on site and at the forefront of our safety culture.”

- Ron Hochstein, CEO www.lundingold.com

Lundin Gold | 8 an accelerated high school program for adult learners, and initiatives to support up-skilling, vocational training, and certification for local community members and their businesses “We have gone to local communities and built up a series of priority investments together. For example, we’ve invested in multiple programs to develop the local labor force and to promote adult and youth education. We’re walking the talk. We are also committed to prioritizing local procurement and we’ve kept our word,” adds Dicaire. In fact, Lundin Gold earned recognition from the U.N. Global Compact for its backing of Catering Las Peñas,

North Access Road

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a company started by a group of employees. “The Lundin Foundation helped them with a business plan. They bid on a contract and won it and the Foundation gave them a small business loan to get going. They started as an independent company in 2015 and went from serving 80 people to now serving more than 1200 people three meals a day. They have their own local procurement initiatives and are buying more and more products from local providers. And they have now expanded with another contract with a hospital for cleaning and catering services,” says Hochstein. Charged with oversight of project

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Lundin Gold |10 execution, Dicaire says the company hires local contractors only upon completion of the company’s rigorous pre-qualification and screening program. “We focus on local hiring and work with suppliers to make sure they have the right goods at a reasonable price and of the quality we need,” he explains.

soccer tournaments and karaoke nights are part of the environment.

People, Training and Challenges

The company prefers organic growth and works closely with managers to identify and evaluate potential candidates for open positions. “We have a great team. And because a lot of people know about the deposit and that we’re there, it helps us to get good

The company seeks specific personality types and skill sets when hiring, which are especially important in a camp situation. To enhance teamwork and reduce worker stress,

Bolting Installation in Decline

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“Not everyone can do this job, so we have a detailed hiring process and training. This is important to building the right team. We have developed a great data base in advance of hiring,” Hochstein says.

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Embracing technology will be a key component since it is estimated that 90 percent of those operating the gold mine will require a range of qualifications, including technical savvy. Additional hurdles include maintaining the company’s social license and obtaining project permits in a timely manner. “We are part of the way there. A big part of the success is because of the Lundin track record – there is a significant shareholder who has been supporting this project for almost five years now,” Hochstein says.

“

We have gone to local communities and built up a series of priority investments together. For example, we’ve invested in multiple programs to develop the local labor force and to promote adult and youth education. We’re walking the talk. We are also committed to prioritizing local procurement and we’ve kept our word.

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people and make this a success”.

Looking Ahead

- Dave Dicaire, Vice President of

Fruta del Norte has an anticipated

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Lundin Gold | 13 production span of 15 years. The total onsite workforce will peak at approximately 1,800 including contractors during 2019 and will remain in the 700-800 range during the subsequent years. Hochstein says Lundin Gold will remain true to its core principles throughout its time in Ecuador. â&#x20AC;&#x153;We will work safely, we will protect the environment, and we will respect each other, the communities that we work in, and the government for their positions. Those are the principles for success,â&#x20AC;? he concludes.