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Lundin GOLD Awards MINE Development Contract

Mine Development & Operations

NEWS RELEASE

LUNDIN GOLD AWARDS MINE DEVELOPMENT CONTRACT

February 22, 2017 (Vancouver, Canada)… Lundin Gold Inc. ("Lundin Gold" or the "Company") (TSX:

“LUG”, Nasdaq Stockholm: “LUG”) is pleased to announce that its wholly-owned subsidiary Aurelian

Ecuador S.A. has awarded the mine development contract for the Fruta del Norte gold project in Ecuador

to a consortium comprising the following companies:

• Ingenieria y Construcciones Mas Errazuriz Limitada y Filiales (“Mas Errazuriz”) of Chile, which

brings over 30 years of underground mine constructi on and employs over 1,000 employees in

Chile, Peru, Argentina and Columbia; and

• Sevilla y Martinez Ingenieros C.A. Semaica (“Semai ca”) of Ecuador, with over 60 years of civil

construction experience in the country and employs over 1,000 people.

Mas Errazuriz and Semaica will partner as a 50/50 consortium to become Lundin Gold’s key contractor

for the portals and soft tunneling work and the dev elopment of the twin declines and of the mine in

preparation for operations. Planning and mobilizat ion activities will commence immediately under the

terms of a Letter of Award executed on February 21, 2017.

A competitive bidding, evaluation and negotiation p rocess was carried out by a cross functional projec t

team over several months leading to this award. “We are very pleased to have completed the process

of selection for the mine development contractor, enabling Lundin Gold to continue to advance the Fruta

del Norte project on schedule” said Lundin Gold’s President and Chief Executive Officer, Ron Hochstein.

“We look forward to working with these two experien ced companies to form the critical underground

development team for the success of Fruta del Norte.”

The Early Works program to prepare the site for the start of the work on the mine development, as well

as basic engineering, continue. With the award of t his contract, the Fruta del Norte project remains o n

track for the start of construction of the mine portals as planned in the Feasibility Study.

About the Company

Lundin Gold Inc. owns the Fruta del Norte gold project located in southeast Ecuador. FDN is one of the

largest and highest grade undeveloped gold projects in the world. The Company is advancing FDN in

order to realize the significant potential of this asset.

The Company believes that the value created will no t only greatly benefit shareholders, but also the

Government and people of Ecuador who are the Company's most important stakeholders in this project.

Lundin Gold views its commitment to corporate socia l responsibility as a strategic advantage that

enables it both to access and effectively manage bu siness opportunities in increasingly complex

environments. Lundin Gold is committed to addressing the challenge of sustainability - delivering value

to its shareholders, while simultaneously providing economic and social benefits to impacted

communities and minimizing its environmental footprint.

Additional Information

The information in this release is subject to the d isclosure requirements of the Company under the EU

Market Abuse Regulation and the Swedish Securities Market Act. This information was publicly

communicated on February 22, 2017 at 5:00 a.m. Vancouver Time.

2

For more information, please contact

Lundin Gold Inc.

Ron F. Hochstein

President and CEO

+593-2-299-6400

+1-604-806-3589

Lundin Gold Inc.

Sophia Shane

Corporate Development

+1-604-689-7842

[email protected]

www.lundingold.com

Forward-Looking Statements

This press release contains or refers to forward-lo oking information under Canadian securities

legislation, including statements regarding the awa rd of the mine development contract, the formation

of a consortium and the satisfaction of other contr act conditions by the contractor, the performance o f

the contractor, the estimated cost and duration of the mine development work, the execution of the

definitive mine development contract and the antici pated time to production, all of which information is

based on current expectations that involve a number of business risks and uncertainties. Forward-

looking statements are subject to significant risks and uncertainties, and other factors that could ca use

actual results to differ materially from expected r esults. Readers should not place undue reliance on

forward-looking statements.

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 from those anticipated in this forward-looking information

as a result of the factors discussed in the "Risk Factors" section in Lundin Gold's Short Form Prospectus

dated July 12, 2016 available at www.sedar.com.

Factors that could cause actual results to differ m aterially from any forward-looking statement includ e,

but are not limited to, the ability to arrange financing, the timely receipt of regulatory approvals, permits

and licenses, risks related to carrying on business in an emerging market such as possible government

instability and civil turmoil and economic instabil ity, measures required to protect endangered specie s,

deficient or vulnerable title to mining concessions and surface rights; the potential for litigation; volatility

in the market price of the Company's shares; the ri sk to shareholders of dilution from future equity

financings; the cost of compliance or failure to co mply with applicable laws; difficulty complying wit h

changing government regulations and policies, inclu ding without limitation, compliance with

environment, health and safety regulations; illegal mining; uncertainty as to reclamation and

decommissioning liabilities, unreliable infrastructure and local opposition to mining; the accuracy of the

Mineral Reserve and Resource estimates for the Fruta del Norte Project and the Company's reliance on

one project; volatility in the price of gold; short ages of resources, such as labour, and the dependen ce

on key personnel; the Company's lack of operating h istory in Ecuador and negative cash flow; the

inadequacy of insurance; potential conflicts of int erest for the Company's directors who are engaged i n

similar businesses; limitations of disclosure and i nternal controls; and the potential influence of th e

Company's largest shareholders. The forward-lookin g statements contained in this press release are

made as of the date hereof and the Company assumes no responsibility to update them or revise them

to reflect new events or circumstances other than as required by law.