Fruit del Norte Gold Project Activities Ramped Up

VANCOUVER, BC - Lundin Gold Inc. reported that long-lead time process plant equipment for its Fruta del Norte gold project in Ecuador has been ordered and that soft tunneling is well advanced. Detailed engineering contracts for the process plant, tailings facility and water management have been awarded. Engineering, procurement and construction (EPC) contract for the power transmission line from the Bomboiza substation to Fruta del Norte has been awarded. Major earthworks activities are progressing and work on the process plant has started.

"The Project has very quickly transitioned from basic to detailed engineering and onsite earthwork and mining activities have successfully ramped up according to plan," said Ron Hochstein, President and CEO. "We continue to de-risk Fruta del Norte with long-lead time purchase orders confirmed, advancement of the Project's infrastructure and significant progress on the civil earthworks programs."

The mine contractor, SME, which is a consortium of Ingenieria y Construcciones Mas Errazuriz Limitada y Filiales (Chilean) and Sevilla y Martinez Ingenieros C.A. (Semaica) (Ecuadorian) began work on the twin portals in May of this year. Both portals are in place and soft tunneling through the initial clay commenced on September 20th for the first decline and October 7th for the second. Currently, soft tunneling has advanced approximately 23 meters in the first decline and seven meters in the second. The transition from soft tunneling to hard rock development is expected to begin as scheduled by the end of the year.

The facilities to support mine development, including offices, mine dry, warehouse, maintenance, and batch plant have also been built and are operational.

Lundin Gold is moving forward with the engineering and procurement of the process plant. The long-lead time grinding equipment package, including the SAG and ball mills, complete with motors, was awarded to Outotec Chile S.A. Outotec was also awarded the flotation and filtration packages. The procurement of the remaining process plant equipment packages is well advanced and is expected to be awarded by the end of the year.

Process plant detailed engineering was awarded to Ausenco Engineering Canada Inc. and is expected to be completed in the fourth quarter of 2018. Earlier this year, Ausenco also completed optimization work for the process plant.

Klohn Crippen Berger Ltd. will provide detailed designs and site quality control for the tailings storage facility and site geotechnical engineering. Site-wide water management design has been awarded to SRK Consulting (Canada) Inc.

Bidding for the design and supply of the mine paste plant has commenced, and this contract is expected to be awarded in the first quarter of 2018.

The EPC contract for the 42 kilometer, 230 kilovolt transmission line that will connect the national grid at Bomboiza to Fruta del Norte was awarded to a consortium that will be formed by two Ecuadorian companies, Coinfect S.A Ingenieros Contratistas and Energic y Petrolia's Inexpertly, S.A. Detailed engineering has started and construction is expected to begin in the first quarter of 2018.

The draft Environmental Impact Assessment report for the powerline was submitted to the Ministry of Environment in May 2017 and the Company anticipates receiving final approval and granting of the license by the end of the year.

Major earthworks activities are advancing, including clearing of the plant site, construction of the main North Access road and the River road on site. The earthworks for the 1,000 person construction camp is mostly complete along with the installation of utilities. Building out of the facilities has begun and the construction camp is expected to be completed in the first quarter of 2018.