2018 01-15-cp lug
TRANSCRIPT
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DisclaimersAll statements, other than statements of historical fact, made and information contained in this presentation and responses to questions constitute“forward-looking information” or “forward-looking statements” as those terms are defined under Canadian securities laws ( “forward-looking statements”).Forward-looking statements may be identified by terminology such “believes”, “anticipates”, “expects”, “is expected”, “scheduled”, “estimates”, “pending”,“intends”, “plans”, “forecasts”, “targets”, or “hopes”, or variations of such words and phrases or statements that certain actions, events or results “may”,“could”, “would”, “will”, “should” “might”, “will be taken”, or “occur” and similar expressions).
By their nature, forward-looking statements involve assumptions, inherent risks and uncertainties, many of which are difficult to predict, and are usuallybeyond the control of management, that could cause actual results to be materially different from those expressed by these forward-looking. Lundin Goldbelieves that the expectations reflected in these forward-looking statements are reasonable as of the date made, but no assurance can be given that theseexpectations will prove to be correct. In particular, this presentation contains forward-looking statements pertaining to: the Company’s project financingand sources of liquidity; the Company’s exploration plans and activities; the value of the Company and the trading price of its shares; estimates of mineralresources and reserves; the rate of development of the project; production plans and profiles; projected capital and operating costs; permitting andregulatory approvals; capital expenditures and requirements; the expectations of market prices and costs; the development, construction and operation ofFruta del Norte; anticipated future tax payments and rates, cash flows and their uses; and benefits under the Company’s agreements with the Governmentof Ecuador.
There can be no assurance that such statements will prove to be accurate, as Lundin Gold's actual results and future events could differ materially fromthose anticipated as a result of the factors discussed in the "Risk Factors" section in Lundin Gold's Annual Information Form for the financial year endedDecember 2016 and the Prospectus dated December 21, 2017, both of which are available on SEDAR at www.sedar.com. Forward-looking informationshould not be unduly relied upon.
The technical information contained in this presentation relating to the Fruta Del Norte Project is based on a Technical Report prepared for the Companyentitled “Fruta del Norte Project, Ecuador, NI 43-101 Technical Report on Feasibility Study” dated June 15, 2016 with an effective date of April 30, 2016 (the"2016 FDN TR"). Information of a scientific and technical nature in this presentation was reviewed and approved by Ron Hochstein, P.Eng., Lundin Gold’sPresident and Chief Executive Officer, and Steve Leary, MAusIMM CP(Geo), an independent consultant to Lundin Gold, both of whom are Qualified Personswithin the meaning of National Instrument 43-101 - Standards of Disclosure for Mineral Projects (“NI 43-101”).
Unless otherwise indicated, all dollar values herein are in US dollars.
Important Information for US InvestorsThis presentation may use the terms “measured", “indicated“, “inferred" and “historical” mineral resources. U.S. investors are advised that, while suchterms are recognized and required by Canadian regulations, the Securities and Exchange Commission does not recognize them. “Inferred mineralresources" and “historical estimates” have a great amount of uncertainty as to their existence and great uncertainty as to their economic feasibility. Itcannot be assumed that all or any part of an inferred mineral resource or a historical estimate will ever be upgraded to a higher category. Under Canadianrules, estimates of inferred mineral resources may not form the basis of feasibility or other economic studies. Further, historical estimates are notrecognized under Canada’s NI 43-101. U.S. investors are cautioned not to assume that all or any part of measured or indicated mineral resources will everbe converted to mineral reserves.
This presentation is not an offer of securities for sale in the United States or in any other jurisdiction. The Company’s securities have not been and will notbe registered under the United States Securities Act of 1933, as amended and may not be offered or sold within the United States absent registration or anapplication exemption from registration.
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Building a Leading Gold Company
• Fruta del Norte is a large, high-grade gold deposit within a major mineralized trend
• Management and project team with extensive mine construction and operating experience
• Ecuador government open and supportive of mining investment
• First stage US$400 - US$450 million financing in place
• Construction underway
• First gold production expected in Q4 2019
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Capital Structure
Share Price1 $5.16
Shares Outstanding2 119.6 M
Market capitalization1 $613.9 M
52 week high/low1 $4.07/$6.50
Cash position3 $63.0 M
Major Shareholders1:• Lundin Family• Kinross• CD Capital• Kopernik Global• Mackenzie Financial• Invesco Canada• AMG Fondsverwaltung AG• Van Eck
1: As at January 15, 2018, in C$2. As at December 31, 20173. As at September 30, 2017 in US$
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Management Team with Extensive Mining Experience
Lukas Lundin – Chairman and Director• 37 years of recognizing value and superior global investment opportunities in the natural resource sector• Pursuit of highly prospective properties around the world has resulted in numerous resource discoveries, including the multi
million-ounce Veladero gold discovery• Has led several companies through highly profitable business acquisitions and mergers such as Lundin Mining Corporation's $3.3
billion merger with EuroZinc Mining
Ron F. Hochstein - President, CEO & Director• 35 years in the mining industry, including more than 20 years working with the Lundin Group• Worked with a number of resource companies, most recently as President and CEO of Denison Mines Corp. from 2009 to 2015
Alessandro Bitelli - EVP, CFO• 30 years experience in the resource industry and in public accounting, both in Europe and North America• Former CFO of Redback Mining, which was acquired by Kinross in 2010 for $9.2 billion
David Dicaire - VP, Projects• 35 years in the mining, engineering and construction industry, leading both Owners and EPCM teams on a variety of global
projects• Project Director for Freeport McMoRan’s US$4.6 billion Cerro Verde Expansion Project in Peru, and previously worked on Agua
Rica Mine in Argentina (Glencore, prev. Xstrata) and Quellaveco Mine in Peru (Anglo American)
Nathan Monash - VP, Business Sustainability• 15 years experience in resource business sustainability• Worked extensively with the IFC, guiding extractive industry clients on the structure and implementation of sustainable
development strategies
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Ecuador Committed to Mining
• Ecuador established a mining ministry in 2015 to encourage mining investments
• Local communities support the Fruta del Norte project
• Exploitation Agreement and Investment Protection Agreement signed with the Ecuadorian government in December 2016
• Lundin Gold has major permits in place and has begun construction at Fruta del Norte
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Fruta del Norte is Within a Major Mineralized Trend
Bonza Trend
Alejandro
Puente Princesa
Rio Blanco
Robles
Emperador
• 70,000 ha of prospective exploration acreage including the Bonza Las Peñas trend, which hosts Fruta del Norte
• Suarez Pull-Apart Basin extends 16 km south of Fruta del Norte, doubling the most prospective trend
• Significant exploration upside exists -numerous key targets with epithermal geochemical signatures along the trend have yet to be drilled
• 4,000 m exploration drill program underway 12 km south of Fruta del Norte
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Probable Reserves Represent Only 67% of Indicated Resources
Main Area of Reserves and
Resources
Fruta del Norte not fully defined to the
south
Grade of Ore Blocks
3-5 – 5.0 g/t Au
5.0 – 10.0 g/t Au
> 10.0 g/t Au
North
600 m L
300 m H
100 – 200 m W
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15 Year Mine Life Based on Current Probable Reserves
Tonnes (000 t)
Au Grade(g/t)
Ounces(000 oz)
Transverse Stope 11,685 8.82 3,314
Overhand Drift & Fill 3,905 10.36 1,301
Underhand Drift & Fill 711 10.77 246
Development Ore(> 4.7 g/t)
96 11.02 34
Development Low Grade (> 2.7 g/t)
375 3.70 45
TOTAL 16,774 9.16 4,940
Source: See Lundin Gold news release dated May 30, 2017
Fruta del Norte drill core
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Fruta del Norte is a Large, High-Grade Gold Mine
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Au
Grad
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Annual Gold Production Profile
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Ore Processed Au Grade
k o
zs
Fee
d (
k to
nn
es)
Processing Plant Feed
Source: See Lundin Gold news release dated May 30, 2017
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High Ounce / Low Tonne Per Day MineA
vera
ge A
nn
ual
Au
pro
du
ctio
n (
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)M
ill Cap
acity (tpd
)
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Average Annual Au Production Mill Capacity
• Fruta del Norte will produce an average of 325,000 ounces of Au per year from approximately 3,500 tonnes per day
Source: Public company filings
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Fruta del Norte Project Update
• Underground mine development into hard rock and should now progress at a quicker pace
• All major process plant equipment packages awarded
• Detailed engineering for process plant, tailings facility and water management well underway
• Process plant excavation is progressing ahead of schedule -concrete mill foundations expected to start this quarter
• Powerline contractor on track to begin building the powerline this quarter
• North Access road is progressing well and 32% has been built
Into hard rock in Kuri and K’isa
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Mine Waste StorageProcess Plant Portal Platform
Portals
Water Ponds
Crusher
Mine Site Under Construction
Surface mine temporary facilities including warehouse, fab shop, dry and offices
Process plant earthworks
Into hard rock
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Underground Mine Development on Track
Twin Portal Declines
Dewatering Galleries
North Orepass
Central Orepass
South Orepass
FAR
Portal Entrance
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Overlain on FS Layout
Compact Process Plant Footprint
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Major Environmental Permitting Complete
Las Peñas and construction camp
• Received Environmental License for Fruta del Norte in October 2016
• Environmental License for the powerline received in January 2018
• Other key licenses and permits in progress:
• Mountain Pass Quarry environmental license
• Industrial and domestic water permits
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First Gold Expected Q4 2019
Fruta del Norte Development Timeline
2017 2018 2019 2020
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
North Access Road
Zamora River Bridge
Mountain Pass Quarry Development
River Road
Site Earthworks and Construction Camp
U/G Mine Development
Process Plant Detailed Engineering
Process Plant Construction
Power Line Construction
Tailings Construction
Process Plant Commissioning
Paste Plant Detailed Engineering and Construction
First Ore to Mill/Commercial Production
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Project Team with Global Mine Development ExperienceLouis GignacProject Advisor• Rosebel Mine, Suriname (IAMGold)• Essakane Mine, Burkina Faso (IAMGold)• Omai Gold Mine, Guyana (Mahida Gold, prev. IAMGold)
Matt GignacProject Director• Rosebel Mine, Suriname (IAMGold)• Merian Mine, Suriname (Newmont)• Mouska Mine, Canada (IAMGold)
Meredith ArnouldProject Business Manager• Cerro Verde Mine, Peru (Freeport McMoRan)• Mount Milligan Mine, Canada (Centerra, prev. Thompson
Creek)• Endako Mine, Canada (Centerra, prev. Thompson Creek)
Serge ThébergeSite Manager• Rosebel Mine, Suriname (IAMGold)• Cie des Bauxites Mine, Guinea (Halco/Guinea
government)• Quimsacocha Mine, Ecuador (INV Mining, prev. IAMGold)
Doug MooreMine Development Manager• Carlin East Mine, USA (Newmont)• Buckhorn Mine, USA (Kinross)• Lac des Iles Mine, Canada (North American Palladium)
William MathesonConstruction Manager• Yanacocha Mine Phase 1, Peru (Newmont)• Carlota Mine, USA (KGHM International)• Sierra Gorda Mine, Chile (KGHM International)
Joel LacelleOffshore Services Manager• Detour Lake Mine, Canada (Detour Gold)• Raglan Mine, Canada (Glencore)• Casa Berardi Mine, Canada (Hecla Mining)
Murray WrightSupply Chain Manager• Kansanshi Mine, Zambia (First Quantum)• Tasiast Mine, Mauritania (Kinross)• Otjikoto Mine, Namibia (B2 Gold)
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Attractive All-In Sustaining Costs
Cash Cost(US$ per oz Au)1
On site operating costs $424
Treatment & refining $83
Royalties & production taxes
$76
Silver by-product ($22)
Cash Costs $561
Sustaining Capital & Closure
$49
All-in Sustaining Costs $609
Source: See Lundin Gold news release dated May 30, 20171. Numbers may not add due to rounding, AISC are presented as defined by the World Gold Council and costs are estimated in Q1 2017 dollars
OPEX (US$ per tonne
processed)
OPEX (US$ per
payable oz)
Mining $55 $208
Process $32 $123
Surface Infrastructure
$20 $77
G&A $4 $16
Total $111 $424
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Project Capital Expenditures
Capital Expenditures1 US$(M)
Underground Mine $146.7
Process Plant $71.4
Power and Electrical $66.5
Infrastructure $48.2
Surface Operations $46.4
Water and Tailings $44.6
Sub Total - Direct Costs $423.8
Indirect Costs $99.3
Owners Costs $117.8
Start-up and Commissioning $21.0
Contingency $68.6
Total $730.3
Source: See Lundin Gold news release dated May 30, 20171. Excluding taxes, advance royalties, working capital & financing costs
US$(M)
Capital Expenditures $730.3
Pre Production Revenue ($131.4)
Pre Production Cost $85.1
TOTAL CAPEX $684.0
Fruta del Norte Site
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First Stage Financing Significantly De-Risks Fruta del Norte
Financing package totals US$400 - US$450 million and includes:
• Gold pre-pay term credit facility of US$150 million
• Stream credit facility of US$150 million
• Offtake agreement for up to 2.5 million ounces refined gold
• Commitment to participate in equity raises for aggregate total of US$100 to US$150 million
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Mining Can be Catalyst for Sustainable Economic Development
Platform forBroad-based
EconomicDevelopment
HumanCapital
Infrastructure
NaturalCapital
FinancialCapital
ProtectingEcosystem
Services
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Lundin Gold is Committed to Business Sustainability
UN Global Compact Award for Sustainable Development
• UN Global Compact Networks of Colombia and Ecuador recognized Lundin Gold’s work with the Lundin Foundation and Catering Las Peñas
• Catering Las Peñas founded by former Lundin Gold employees that now provide food preparation, cleaning and laundry services to Fruta del Norte
• Lundin Foundation provided initial investment and technical assistance
• In two years Catering Las Peñas has created 150 jobs and sources supplies locally
Víctor Armijos, representative of Catering Las Peñas; Rebeca Illescas, Vice Minister of Mining; Iliana
Rodríguez, Vice President, Human Resources of Lundin Gold and Jorge Granda, representative of Catering Las
Peñas
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Analyst Coverage
Firm Analyst Rating and Target Price (C$)
ABG Sundal Collier Olof Grenmark Buy, $7.231
BMO Capital Markets Brian Quast Outperform Buy, $7.50
CIBC World Markets David Haughton Outperform Buy, $7.30
Cormark Securities Tyron Breytenbach Buy, $8.00
Echelon Wealth Partners Matt O’Keefe Buy $9.00
VIII Capital Craig Stanley Buy, $7.30
GMP Securities Steve Butler Buy, $8.75
Haywood Securities Kerry Smith Buy, $7.75
Kepler and Cheurvreax Ola Sodermark Buy, $6.461
Nordea Equity Research Christian Kopfer Buy, $7.231
Paradigm Capital Don MacLean Speculative Buy, $9.00
Pareto Securities Finlay Heppenstall Buy, $7.07
Scotia Capital Inc. Trevor Turnbull Outperform Buy, $6.50
TD Securities Daniel Earle Speculative Buy, $8.00
1. ABG, Nordea, and Swedbank price target converted from SEK to CAD (6.5 SEK = 1 CAD) Lundin Gold is followed by the analysts listed above. Note that any opinion, estimates or forecasts regarding the Company made by these analysts are the analysts’ opinions and do not represent opinions, estimates or forecasts of the Company or its management. Lundin Gold does not imply endorsement by the analyst coverage referenced above.
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Lundin Gold Valuation Potential1
1. As at December 31, 2017Source: Bloomberg and public company filings
$367
$286
$140
$100
$77
$140
$0
$100
$200
$300
$400
PVG 2013• Feasibility study
PVG 2014• Pre-construction
activities
PVG 2015• Pre-construction activities• Early construction works• U/G mine development PVG 2016
• Full project execution• Continued U/G mine development
• Updated mineral reserves
LUG 2017• Pre-construction activities• Early construction works• U/G mine development
PVG 2017• Production
EV/A
u R
ese
rves ($
pe
r ou
nce
)
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Building the Next Major Gold Mine
• Fruta del Norte is a large, high grade gold deposit under construction
• Board and management team dedicated to advancing the Project to production
• Ecuador mining industry maturing
• Project financing progressing
• Mine development on track
• First gold production expected in Q4 2019
Appendix
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Non-Executive Board of DirectorsAshley Heppenstall• Lead Director of Lundin Gold since 2015• Has worked with Lundin Group public companies since 1993, most recently as the President, CEO and Finance Director of
Lundin Petroleum AB
Carmel Daniele• Founder and CIO of CD Capital UK Ltd., the fund manager of a number of private equity and mining funds• 25 years of natural resources investment experience, 10 years of which were spent with Newmont Mining/Normandy
Ian Gibbs• Canadian chartered accountant that has held a variety of prominent positions with Lundin Group of companies, currently
serving as CFO of Africa Oil Corp.• Former CFO of Tanganyika Oil, where he played a pivotal role in the recent $2 billion acquisition by Sinopec International
Petroleum
Chantal Gosselin• 25 years of combined experience in the mining industry and capital markets• Has held positions as VP and PM at Goodman Investment Counsel and Senior Mining Analyst at Sun Valley Gold LLP, as well as
various mine-site management positions in Canada, Peru and Nicaragua
Paul McRae• Current Senior VP of Lundin Mining Corp.• Global reputation in project and construction management in the mining industry for both surface and underground projects of
all scales and complexities, and was most recently responsible for the successful development of Lundin Mining’s Eagle Mine inNorthern Michigan
Pablo Mir• Senior partner at Bofill Mir & Alvarez Jana, one of the largest law firms in Chile, where he leads the natural resources practice• Has advised international mining companies on the exploration, development, construction, and acquisitions of mining
projects in Chile and Argentina
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National Instrument 43-101 Resource Statement
Mineral Resources - Mineral Resources, inclusive of Mineral Reserves as at December 15, 2015
CategoryTonnage
(M t)Grade
(g/t Au)Contained Metal
(M oz Au)Grade
(g/t Ag)Tonnage
(M oz Ag)
Indicated 23.8 9.61 7.35 12.9 9.89
Inferred 11.6 5.69 2.13 10.8 4.05
1. The Qualified Person for the estimate is Mr. David Ross, P.Geo., an employee of RPA. The estimate has an effective date of 31 December, 2015. 2. Mineral Resources are reported inclusive of Mineral Reserves; Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.3. Mineral Resources are reported at a cut-off grade of 3.5 g/t Au; which was calculated using a longterm gold price of US$1,500/oz.4. Mineral Resources are constrained within underground mineable shapes that assume a minimum thickness of 2 m; metallurgical recovery of 94%; total
operating costs of US$145/t milled (mining cost of US$60/t milled; process costs of US$35/t milled; G&A costs of US$15/t milled; surface infrastructure costs of US$28/t milled; concentrate transport and treatment costs of US$7/t milled); royalties of US$71/oz and selling costs of US$65/oz.
5. Numbers may not add due to rounding.
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Orion and Blackstone Financing Package
• Gold pre-pay term credit facility of US$150 million
• Principal and interest paid over 19 quarters equivalent to 11,500 Au ounces based on spot at time of payment starting December 2020 and ending 2025
• Stream credit facility of US$150 million
• Cash equivalent of 7.75% of Au ounces and 100% of Ag ounces based on spot at time of payment less US$400/ounce Au and US$4.00/ounce Ag starting December 2020, capped at 350,000 ounces Au and 6.0 million ounces Ag
• Option to buy back 50% of the stream in June 2024 and 50% in June 2026
• Offtake agreement for up to 2.5 million ounces refined gold
• Commitment to participate in equity raises for aggregate total of US$100 to US$150 million
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The Company has all the major agreements and permits with the Government of Ecuador for commencing development of the Project
Both the Exploitation Agreement and the Investment Protection Agreement were signed in December 2016
• The Exploitation Agreement sets out the rights andobligations of the Government of Ecuador and Aurelian asmining concessionaire with respect to the Project andincorporates:
• Term – affords the mining concessionaire the right todevelop and produce gold from the Project for 25 years
• Fiscal Terms – describing royalties, windfall tax andsovereign adjustment mechanisms
• Security – acknowledges the financing requirements andprovides the ability and authorisation to grant security
• Enforcement – provides acknowledgement that theLenders are entitled to foreclose without authorisationfrom the mining concessionaire or the Government ofEcuador
• Dispute Resolution Procedures – arbitration underUNICTRAL rules (in Santiago, Chile)
• The Investment Protection Agreement primarily deals with tax and mining regulatory stabilisation and other investment protection mechanisms. Key benefits include:
• Income tax rate fixed at 22%
• Exemption from the capital outflow tax of 5% on payments of principal and interest to financial institutions outside of Ecuador
• The ability to obtain benefits granted by the Government of Ecuador through future investment protection agreements with other investors in similar projects in Ecuador
• No restrictions to transfer or assign all or part of the investment, including the right to assign its rights to any financing parties
• Other benefits granted to Aurelian include no restriction to:
• produce and sell minerals;
• import and export goods; and
• establish, maintain, control, or transfer funds abroad, provided statutory remittances and obligations have been met
Government Agreements
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Lundin Gold Undervalued vs. Peers on EV/Au Reserves Basis
1
1. As at January 9, 2018, C$Source: Bloomberg and public company filings
$691
$518
$386 $367
$333 $318
$266
$224
$185 $176 $157 $152
$133
$64 $23 $0
$200
$400
$600
$800
Mean $265
Median $245
EV/A
u R
ese
rves ($
pe
r ou
nce
)
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Fruta del Norte will Produce Both Gold Doré and Gold Concentrate
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223
RING 1
RING 2
RING 3
RING 4
EX PAT
324
75
52
244
43%
10%
7%
7%
33%
# OF
EMPLOYEESPERCENTAGE
TOTAL748 100%
53
Employment Lundin GoldEnd of December 2017
35
Employment ContractorsEnd of November 2017
35
223
RING 1
RING 2
RING 3
RING 4
EX PAT
240
100
101
516
24%
10%
10%
3%
53%
# OF
EMPLOYEESPERCENTAGE
TOTAL982 100%
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Local Procurement36
• Jointly-defined local procurement strategy:
• Definition of local and meaning of “prioritization” in procurement process
• Reserve List
• Certification process is first step, with ongoing support
• More than 225 local suppliers since January 1, 2016
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Into Hard Rock in Kuri and K’isa
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Process Plant Earthworks
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Surface mine temporary facilities including warehouse, fab shop, dry and offices
Contact information:Sabina SrubiskiManager, Investor [email protected]+1 604 689-7842www.lundingold.com