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Gold miner fits all investor personality type portfolios

Ron Walter takes a look at Lundin Gold.
Bizworld by Ron Walter

Lundin Gold is a mining company that can fit the entire spectrum of investment portfolios — growth, dividend, conservative or speculative.

The Vancouver-based miner with a producing gold mine in Peru appears to fit the needs of all these investor types.

The company owns and operates the Fruta Del Norte gold mine in southeastern Peru with a large land package along a 90-mile long geological trend known for gold and copper deposits.

The mine with a remaining 13-year life has expanded production every year since startup in 2021, producing 200,000 ounces of gold in the first full year.

Last year gold production was 430,000 ounces. Expansion plans will increase that to between 430,000 and 460,000 ounces in 2024 with 465,000 ounces to 515,000 the following year.

New gold reserves last year were triple production with five million proven and probable ounces now.

Total mining costs are among the lowest in the gold sector at $870 US per ounce.

Lundin is one of the highest dividend payers in the gold mining sector at 26 cents annually yielding just over two per cent on current share price of $13.78 on the Toronto Stock Exchange. Shares are also listed in Stockholm and the U.S. over-the-counter market       

Three deposits near the underground mine are being prepared for production. Another six potential targets are being explored by drills.                           This just represents a fraction of the land under Lundin control.

Management is a crucial factor in evaluation of any company for investment.

Lundin Gold is controlled by the Lundin family of Sweden that has over 50 years experience finding, building and operating mines all across the world

The Lundin Group includes five oil companies, five base metals miners, one diamond operation and Lundin Gold.

Lundin founder Adolph Lundin, known for his Midas touch in mining circles, has died but family and experienced management operates the group.

At year-end Lundin has $336 million cash to fund work. The cash represented one-fifth of assets.

Debt at $667.9 million was reduced by $73 million during the year. 

Dividends represent 22 per cent of free cash flow and have plenty of room to grow.

Operating in a Latin American country may involve political issues but Peru is a friendly mining jurisdiction with export of mineral production only exceeded by oil and bananas.

Lundin claims a strong environmental policy with low emissions and most of the power requirements generated by hydro plants.

This is a stock to watch for long-term growth as well as a pop in gold prices.

CAUTION: Remember when investing, consult your adviser and do your homework before buying any security. Bizworld does not recommend investments.

Ron Walter can be reached at     

The views and opinions expressed in this article are those of the author, and do not necessarily reflect the position of this publication. 


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