Lundin GOLD Inc. Reports Q1 2017 Results
NEWS RELEASE
LUNDIN GOLD INC. REPORTS Q1 2017 RESULTS
May 15, 2017 (Vancouver, Canada)… Lundin Gold Inc. ("Lundin Gold" or the "Company") (TSX:
“LUG”, Nasdaq Stockholm: “LUG”) is pleased to announce its results for the three months ended March
31, 2017. All amounts in this release are in U.S. dollars unless otherwise indicated.
Highlights
Fruta del Norte Project
• The Company continued to progress its Early Works program focusing on completion of basic
engineering and continuation of site capture activities to maintain the project critical path.
• On February 22, 2017, the Company awarded the mine development contract for the portals
and soft tunneling work and the development of the twin declines and the mine in preparation
for operations. The mine development contractor has now mobilized to site and construction of
the mine portals has begun.
Financing
• On January 16, 2017, the Company secured a $35 mil lion short-term credit facility from an
insider of the Company (the "Facility"). As at March 31, 2017, $19 million was drawn down and
outstanding.
Exploration
• Exploration activities focused on target definitio n, advancing inside and outside of the southern
extension of the Suarez Pull-Apart basin hosting th e Fruta del Norte deposit. New epithermal
gold targets include Puma and Gata Salvaje.
Corporate
• On March 16, 2017, Ms. Chantal Gosselin was appoin ted to the Board of Directors. Ms.
Gosselin brings over 25 years of combined experienc e in the mining industry and capital
markets.
”The start of the portal work at the Fruta del Nort e Project is a significant milestone as we begin
transitioning from the Early Works Program to the start of construction.” said Lundin Gold President and
CEO, Ron Hochstein, “In addition, we are pleased wi th the progress made on the project update and
financing initiatives both of which are on track with completion anticipated before the end of the second
quarter.”
Financial Results
(in thousands, except per share amounts)
Three months ended
March 31,
2017 2016
Results of Operations:
Net loss for the period $ (6,387) $ (14,710)
Basic and diluted loss per share (0.05) (0.15 )
(in thousands)
As at
March 31,
2017
As at
December
31, 2016
Financial Position:
Cash 8,415 8,503
Working capital (18,776) 1,022
Property, plant and equipment 22,569 7,822
Mineral properties 239,020 236,874
Total assets 295,795 278,906
Long-term liabilities 3,170 974
Note: the complete analysis of the Q1 2017 financia l results can be found in the MD&A and financial st atements dated May 15,
2017 filed on SEDAR.
The current quarter’s net loss is lower compared to the first quarter of 2016 mainly due to the
commencement of capitalization of expenses relating to the development of the Fruta del Norte Project
in accordance to the Company’s accounting policy. This resulted in the reduction of project evaluatio n
expenditures. In addition, the Company incurred finance fees relating to the Facility.
Liquidity and Capital Resources
As at March 31, 2017, the Company had cash of $8.4 million and a working capital deficit of $(18.8)
million compared to cash of $8.5 million and a work ing capital balance of $1.0 million at December 31,
2016. The change in cash was primarily due to cost s incurred for the development of the Fruta del
Norte Project of $14.6 million and exploration expenditures of $2.9 million offset by drawdowns from the
Facility (see below).
Short-term credit facility
On January 16, 2017, the Company secured a short-term $35 million credit facility from an insider of the
Company. As at March 31, 2017, $19 million was drawn down and outstanding.
The Facility is evidenced by a debenture (the “Debenture”) which is unsecured and is due on the earlier
of the closing of a financing by the Company or May 31, 2017 (the "Maturity Date"). No interest is
payable in cash during the term of the Debenture. Any amount of the Facility remaining unpaid and
outstanding on or after the Maturity Date bears interest at a rate of 5.00% per annum until repaid in full.
The Company issued an aggregate of 60,000 common shares on January 16, 2017 as consideration for
the Facility in lieu of fees. The Company will also issue an additional 1,700 common shares per month
for each $1 million of the Facility drawn down and outstanding until the Maturity Date. As at March 31,
2017, 11,818 common shares have been issued for amo unts drawn down and outstanding under the
Facility. All securities issued in conjunction wit h the Facility are subject to a four-month hold per iod
under applicable securities law.
Outlook
The Fruta del Norte Project remains on track with i ts Early Works program, the highlight of which was
the start of the mine portals on May 1, 2017. Work will progress on the portal and soft tunneling aft er
which underground development in rock is targeted to commence early in the fourth quarter of 2017.
Key activities at the Fruta del Norte Project over the next 12 months are expected to include:
• process plant earthworks and start of process plan t foundations by the first quarter of 2018;
• completion of the construction camp in the first q uarter 2018;
• commencement of tailings dam construction in the f irst quarter of 2018;
• approval of the power line EIA by the end of 2017 and approval of the new Mountain Pass
quarry EIA in the first quarter 2018; and
• progressing work on the North Access Road and Zamo ra River bridge.
The project update, which includes basic engineerin g on some facilities, will be finalized in the seco nd
quarter of 2017 and will form the baseline for the Project and detailed engineering, which is expected to
start in July 2017. Design work is expected to be substantially complete by the third quarter of 2018 .
Plant and mine equipment procurement is expected to start in the second quarter of 2017.
The Company is engaged in advanced discussions with a number of parties, including financial
institutions, strategic and other potential investors on project financing. During the next 12 months, the
Company will continue to work with its financial advisors to put in place the financing for the construction
of the Fruta del Norte Project. Funding for the co nstruction and development of the Fruta del Norte
Project could include various financing transaction s or arrangements, including equity financing, debt
financing, stream financing, joint venturing or other means.
During the second quarter, the exploration group pl ans to continue to advance existing targets to be
drill-ready late this year. An airborne resistivit y survey is planned to better define targets in the Pull-
Apart basin, and an airborne MAG/RAD survey will be carried out on outlying concessions to facilitate
reconnaissance in those areas.
Qualified Person
The technical information relating to the FDN conta ined in this press release has been reviewed and
approved by Ron Hochstein P. Eng, Lundin Gold’s President & CEO, and Nicholas Teasdale, MAusIMM
CP(Geo), Lundin Gold’s Vice-President Exploration, both of whom are Qualified Persons under NI 43-
101.
Full details of the Feasibility Study can be found in a technical report entitled "Fruta del Norte - N I 43-
101 Technical Report on Feasibility Study" (the “Technical Report”) which has an effective date of April
30, 2016. The Technical Report is available for re view under the Company's profile on SEDAR
(www.sedar.com) and on the Company's website (www.lundingold.com).
Additional Information
The Company’s consolidated financial statements for the three months ended March 31, 2017 and
related management’s discussion and analysis are av ailable on the Company’s website at
www.lundingold.com or under its profile on SEDAR at www.sedar.com.
The information in this release is subject to the d isclosure requirements of Lundin Gold Inc. under th e
EU Market Abuse Regulation and the Swedish Securiti es Market Act. The information was submitted
for publication by the persons below at 2:30 p.m. Vancouver time on May 15, 2017.
About the Company:
Lundin Gold Inc. owns the Fruta del Norte ("FDN") g old 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 valu e
to its shareholders, while simultaneously providing economic and social benefits to impacted
communities and minimizing its environmental footprint.
For more information, please contact
Lundin Gold Inc.
Ron F. Hochstein
President and CEO
593 2-299-6400
604-806-3589
Lundin Gold Inc.
Sophia Shane
Corporate Development
604-689-7842
604-689-4250 (FAX)
www.lundingold.com
Caution Regarding Forward-Looking Information and Statements
Certain of the information and statements in this p ress release are considered “forward-looking
information” or “forward-looking statements” as those terms are defined under Canadian securities laws
(collectively referred to as “forward-looking state ments”). Any statements that express or involve
discussions with respect to predictions, expectatio ns, beliefs, plans, projections, objectives,
assumptions or future events or performance (often, but not always, identified by words or phrases such
as “believes”, “anticipates”, “expects”, “is expected”, “scheduled”, “estimates”, “pending”, “intends”,
“plans”, “forecasts”, “targets”, or “hopes”, or variations of such words and phrases or statements tha t
certain actions, events or results “may”, “could”, “would”, “will”, “should” “might”, “will be taken”, or “occur”
and similar expressions) are not statements of historical fact and may be forward-looking statements.
By their nature, forward-looking statements and inf ormation involve assumptions, inherent risks and
uncertainties, many of which are difficult to predict, and are usually beyond the control of management,
that could cause actual results to be materially different from those expressed by these forward-looking
statements and information. Lundin Gold believes that the expectations reflected in this forward-looking
information are reasonable, but no assurance can be given that these expectations will prove to be
correct. Forward-looking information should not be unduly relied upon. This information speaks only
as of the date of this press release, and the Company will not necessarily update this information, unless
required to do so by securities laws.
This press release contains forward-looking informa tion in a number of places, such as in statements
pertaining to: the timing, progress and success of the Early Works program; the success of the
Company’s exploration plans and activities; planned exploration and development expenditures and
reclamation costs; the timing and success of permit ting and regulatory approvals; the results of the
project update; future sources of liquidity, capita l expenditures and requirements; the expectations o f
market prices and costs; the development, construct ion and operation of FDN; anticipated future tax
payments and rates, cash flows and their uses.
Lundin Gold’s actual results could differ materially from those anticipated. Management has identifie d
the following risk factors which could have a mater ial impact on the Company or the trading price of i ts
shares: the ability to arrange financing and the ri sk to shareholders of dilution from future equity
financings; risks related to carrying on business i n an emerging market such as possible government
instability and civil turmoil and economic instabil ity; volatility in the price of gold; the timely re ceipt of
regulatory approvals, permits and licenses; risks a ssociated with the performance of the Company’s
contractors; risks inherent in the development of a n underground mine; deficient or vulnerable title t o
mining concessions and surface rights; shortages of resources, such as labour, and the dependence on
key personnel; risks associated with the Company’s community relationships; unreliable infrastructure
and local opposition to mining; volatility in the m arket price of the Company’s shares; uncertainty with
the tax regime in Ecuador; measures required to pro tect endangered species; difficulty complying with
changing government regulations and policies, inclu ding without limitation, compliance with
environment, health and safety regulations, and the cost of compliance or failure to comply with
applicable laws; exploration and development risks; the accuracy of the Mineral Reserve and Resource
estimates for FDN and the Company’s reliance on one project; liabilities; the Company’s lack of
operating history in Ecuador; illegal mining; uncertainty as to reclamation and decommissioning; adverse
global economic conditions; risks associated with t he Company’s information systems; the inadequacy
of insurance; risks of bribery or corruption; the p otential for litigation; limits of disclosure and i nternal
controls; and the potential influence of the Company’s largest shareholders.
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 F actors" section in Lundin Gold's Management
Discussion and Analysis for the financial year ende d December 2016, which is available on SEDAR at
www.sedar.com.