Dundee receives environmental OK for underground gold project in Ecuador

Dundee Precious Metals (TSX: DPM) has the full go-ahead to proceed with its Loma Larga underground gold project after the government of Ecuador granted the company its environmental licence for exploitation.

In a press release Monday, the Toronto-based Dundee said the Ministry of Environment, Water and Ecological Transition (MAATE) issued the licence on June 23 following a “rigorous process” by the Ecuadorian government.

The licence issuance follows the company’s successful completion of the indigenous consultation process earlier this year, as well as its fulfilment of the August 2023 ruling by the provincial court of Azuay, where the project is located.

Shares of Dundee Precious Metals gained 1.9% by 1 p.m. ET on the news, trading at C$22.08 apiece for a market capitalization of C$3.7 billion.

‘High-quality’ project

The milestone comes four years after Dundee acquired the Loma Larga project to establish its presence in Latin America.

The project has previously received pushback from non-government organizations and local agencies for its potential impact on the local water supply and ecosystem. The Azuay provincial court has sided with the company, provided that it completes the required consultation process.

In his statement, Dundee Precious Metals CEO David Rae confirmed the company is “designing and advancing Loma Larga in line with the highest standards for environmental and water management.”

Dundee, which operates two producing mines in Europe, considers Loma Larga to be a “high-quality underground development project” that shares similar geology, mining method and processing flowsheet to its Chelopech copper-gold mine in Bulgaria.

A 2021 feasibility study indicated that it has the potential to produce an annual average of approximately 170,000 oz. of gold during an estimated 12-year life. The production is based on an estimated mineral reserve totalling 13.9 million tonnes grading 4.91 grams gold per tonne, for 2.2 million oz. of contained gold.

In Monday’s release, the company said it has already completed an updated feasibility study and plans to release it in due course. In the meantime, it is focused on completing its recently announced acquisition of Adriatic Metals.