Canada鈥檚 Lundin Gold (TSX:LUG)聽has in Ecuador, the country鈥檚 largest, after spending $1 billion over five years.
The opening ceremony, held on Nov. 14, was attended by Ecuador鈥檚 vice president, Otto Sonnenholzner, and energy minister, Carlos Perez, as well as provincial and local authorities and key stakeholders, the company said.
The first dor茅 bar was produced on Nov. 16 from the gravity circuit at the mine, following the reception of the last two permits required to move it into production.
The Vancouver-based miner said production of gold concentrate, as part of the commissioning activities, was well advanced, with the first containers being loaded with marketable concentrate.聽Commissioning of the carbon in leach circuit, in turn, is ongoing and nearing completion, Lundin noted.
Lundin has been developing the asset for almost two years, following a 2016聽agreement with Ecuador鈥檚 government
Based on the current projections,聽the first export of concentrate and dor茅 is projected to happen by mid-December. This means the company is on track to beginning commercial production at Fruta del Norte 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聽. The deal allowed it to move ahead with the project, located in the southeastern Amazon province of Zamora Chinchipe.
The company acquired Fruta del Norte in 2014 for $240 million聽聽(TSX:K) (NYSE:KGC), which had to halt operations after being unable to reach an agreement with authorities聽regarding the terms for developing聽the asset.
The underground gold and silver mine contains six of Lundin鈥檚 29 mining concessions and covers 70,000 hectares of land. Discovered in 2006, Fruta del Norte is expected to produce almost 4.7 million ounces of gold over a 15 year mine life.
鈥淭he opening of Fruta del Norte is a turning point for the mining industry in Ecuador,鈥� Keith Barron,聽who discovered the deposit and is now Aurania Resources鈥� chairman and chief executive聽.
鈥淔or the first time in Ecuador鈥檚 history, gold mining will be carried out in a responsible, technically safe and sustainable way,鈥� he added.
Ecuador has聽聽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聽projects聽in the country.
Anglo American (LON: AAL) also landed in the South American nation through a deal with Canada鈥檚 Luminex Resources (TSX-V: LR). The company plans to develop two copper and gold concessions there.
Currently, Ecuador鈥檚 emerging mining sector employs 5,000 people, but聽estimates the figure will rise to about 16,000 next year if the country鈥檚 finances don鈥檛 take a turn for the worse.
The outlook is dubious, however, as Ecuador dollar sovereign bonds were the worst performing in emerging markets on Monday. The tumble came聽after Congress rejected a reform bill presented by President Lenin Moreno as part of a $4.2 billion financing agreement with the International Monetary Fund (IMF).
鈥淭he inconvenient reality is that if Ecuador loses IMF support, then they lose market access,鈥� Siobhan Morden, head of Latin America fixed income strategy at Amherst Pierpont Securities, wrote in a note.
Moreno鈥檚 measures to comply with the IMF program have been criticized by the wide range of topics included 鈥� from student debt to mining policy and central bank autonomy.