Good morning. My name is Sylvie, and I will be your conference operator today. At this time, I would like to welcome everyone to the Linden Gold Q4 and Year End 2020 Results Conference Call. Note that all lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session.
Thank you. Mr. Hochstein, you may begin the conference.
Thanks, Sylvie, and good morning, everyone. Everyone. I hope you're all safe and healthy wherever you may be. Thank you for joining us on this conference call today Alessandro Petelli, Executive Vice President and Chief Financial Officer, and I are going to take you through our results for the Q4 and full year 2020. Everyone.
To begin with, I will provide an overview of our Q4 and full year 2020 achievements, the operator to the operator to discuss our financial results in more detail. Before I finish things off by discussing several key value driving catalysts to keep an eye on in 2021. The operator to the operator. Please note, Funding Gold's disclaimers on this slide. The operator to the operator.
This discussion includes forward looking information. Actual future results may differ from expected results for a variety of reasons the Company's comments described in the caution regarding forward looking information and statements section of our press release. Lundin Gold is a U. S. Dollar reporting entity and all amounts in this presentation refer to U.
S. Dollars unless otherwise indicated. Before discussing our Q4 and full year 2020 results, I would like the company to first talk about the challenges the company faced this year and how the company shaped its strategy in response to the COVID-nineteen pandemic. Throughout 2020, Lending Gold has continued to invest in local development with a wide range of partners. Scott, due to the COVID-nineteen pandemic, priority shifted early in the year.
Since March 2020, our focus has been on direct COVID-nineteen response and mitigating its impacts on local communities. The company. From the beginning of the pandemic, Lundin Gold has worked closely with political and health authorities at the national, provincial and local levels and has contributed to the response effort through a variety of donations and investments. A few examples of these include medical supplies donated to local hospitals, disinfection equipment to local authorities, transportation services for doctors to reach rural areas and food support for vulnerable groups. These efforts to help our local communities were amplified through our communication campaign run during the year in conjunction with local government to promote COVID-nineteen protective measures in communities.
Together with local communities, Lending Gold has long prioritized actions to improve the quality of local education. Unfortunately, as a result of COVID-nineteen, local schools have been forced to close and have not yet reopened. Local Internet infrastructure is quite weak outside of large communities and many families also struggle to provide children the required devices to access the Internet. Lundy and Gold therefore developed a response together with local education authorities, the national government and local stakeholders towards which the company will contribute more than 500,000. The participants.
In line with this, all children enrolled in a local school will be provided a tablet, while teachers will be trained to use tablets to deliver lessons, Assign homework and review each student's progress. Not only this, but Internet capability at the local school Entros will also be improved and rural communities that currently lack Internet access will be connected. Each community will have a free Wi Fi connection point and the National Telephone Company will provide discounted rates for individual connections. Our operator to the operator. We continue to work on this ongoing project and look forward to providing updates on its development rollout throughout 2021.
Open dialogue is essential for lending goals to understand local priorities and challenges and to integrate a wide range of partners into local planning. Regular meetings of community roundtables have played an important role and welcome to the Q4 of fiscal 'nineteen. In February 2020, the pandemic impacted this essential tool the company's call to Mr. President of the company's call to Mr. President of the company's call to Mr.
President of the Board of Directors. I'm happy to report that through the implementation of protocols in December 2020, the multiparty community roundtable process recommenced the operator to the operator to discuss the financial results. 2 full sets of roundtables have been held and participation with many participating virtually everyone. The topics represent the priorities to local communities such as local employment, local procurement, infrastructure, agricultural development and environmental stewardship. This form of participatory dialogue is an important facet of our sustainability strategy.
Now let's shift to FDM.
The operator. The health and safety of personnel site is of utmost importance at Lundin Gold and stringent protocols remain in place at Fruta del Norte to minimize the impact the FDA to COVID-nineteen on the workforce. To date, only 34 cases have been identified in sight with no cases identified since August the Q and A session of 2020. On the safety front, 2 lost time incidents and 5 medical aid incidents were reported during the year 2020 was a year of 2 parts for Lending Gold. In the first half of the year, Fruta del Norte operations ramped up and we declared commercial production in February ahead of schedule.
Unfortunately, less than 1 month later, operations were temporarily suspended in response to the COVID-nineteen pandemic. On July 1, Mining and Milling restarted at site with strict COVID-nineteen protocols in place. And since then, Fruta Del Norte has achieved excellent results, highlighted by the production of 191,080 ounces the company's shareholder and sale of 168,345 ounces of gold at an average all in sustaining cost the company's shareholders and shareholders of only $7.40 per ounce of gold sold. As a result, both gold production And all in sustaining costs exceeded our second half twenty twenty guidance of 150,000 to 170,000 ounces an all in sustaining cost of $7.70 to $8.50 per ounce. Furthermore, Late in the second half of twenty twenty, Lunding Gold made 2 key announcements.
The first was our plan to expand throughput at Fruittsdale Norte the 3,500 ton per day to 4,200 ton per day. We expect to reach the higher throughput rate through the mill in Q4 of this year. The operator. Additionally, we announced an 8% increase of probable mineral reserves for Fruta del Norte to 5,410,000 ounces the call to the probable mineral reserves as at December 2019. This next slide lists some of our operational achievements during the Q4 2020 operating period, which ran over the 10 month period from March 1, the Q1 of 2019 following declaration of commercial production to December 31.
The mine continues to operate according to plan. 350,474 tonnes of ore were mined in the 4th quarter and a combined 672,906 tonnes of ore were delivered to the plant the Q4 of 2018 and Q4 of 2018. Alongside this, underground mine development is progressing well And 2.2 kilometers of development were completed during the quarter, bringing total development during the 2020 the drilling period to 4,808 meters, well in line with our plans. Very importantly, We've been able to convert a significant portion of key high grade areas from drift and fill mining methods to long hole stoping due to good ground conditions, the company to the company. The mill also operated particularly well throughout the year, Exceeding our expectations in most areas.
During the 2020 operating period, the mill operated an average throughput of 3,448 tonnes per day, the operator to the operator to discuss our financial results. Resulting in 724,007 tonnes Mill. While during the Q4, average throughput totaled robust you to the operator to be at 3,665 tonnes per day, processing 337,146 tonnes of ore. The operator to the operator. The average grade of ore milled in the Q4 was 10.1 grams per tonne and 10 grams per tonne during the 2020 operating period.
The call over to Eric. Average recovery has been improving throughout 2020. Recovery averaged 87.2% over the 2020 operating period, our operator to the operator to review our financial results. Well, 88.6% was reported in the 4th quarter, higher than previous periods. We continue to fine tune Primarily the flotation circuit to improve recoveries as we mine and process different types of ore.
Punta del Norte produced 202,830 ounces of gold comprised of 133,153 ounces of concentrate 96,830 ounces of gold were produced in the 4th quarter consisting of 56,900 ounces in concentrate the company's Q3 and 39,930 ounces as dore. Effectively, Fruta del Norte delivered another strong quarter to close out 2020 our shareholders with grades mined, recoveries and average throughput all better than expected. Overall, Fritchard Del Norte has exceeded operational expectations. The operator to the operator to discuss our financial results. And as a result, we were able to beat our second half of twenty twenty guidance across all metrics.
I'm very proud of the operational results the team have achieved since operations restarted in July. I believe that exceeding the upper end of our gold production guidance at a cost less than the lower end of our ASIC guidance the company is a testament to the hard work and dedication of the Lending Gold team. While the 1st year of production now behind us, the company's focused on delivering strong operating results again in 2021 by continuing to optimize our operations the company's next question. Thank you, Mr. Chairman.
We are still under strict COVID protocols. For 2021, gold production at Fruta is estimated to be between 380,000 the company to 420,000 ounces. No production is estimated at an average rate of 3,500 ton per day until the 4th quarter, the production is expected to ramp up to 4,200 tonne per day following completion of the Pan Mill expansion. The head grade is estimated to average 10.4 grams per tonne, with variations expected during the year as different sections of the ore body are mined. An average mill recovery for the year is estimated at 90%.
Our 2021 all in sustaining cost is expected the range between $7.70 $8.30 per ounce of gold sold, including ongoing COVID costs estimated at $27 per ounce. Sustaining capital expenditures of $32,000,000 include 2 raises of the tailings dam, the underground resource expansion drilling campaign another one time improvements at the mine site, some of which had to be deferred to this year due to COVID-nineteen. Before I hand over to Alessandro, I'd like to highlight 2 ongoing construction projects. 1st, Construction of Lending Gold's Zamora River Bridge has commenced with strict COVID-nineteen protocols in place to minimize health risk to the nearby communities. The bridge is expected to be completed in the Q2 of 2021.
Also, re drilling of the South the new facility. The new facility is now ready to introduce our new facility to our new facility. We are still confident of achieving completion in Q2 of this year. Our operator to discuss our financial results. Completion is not expected to impact current mine production or future production plans, but is required to achieve expanded mining rates.
The operator to the operator. Now I'd like to turn the call over to Alessandro for a more detailed look at the financial results. Alessandro?
Thank you, Ron, and hello, everyone. 2020 marked the start of mining operations at Frutobel Norte, which resulted in net revenues of $358,000,000 based on sales of 199,000 ounces of gold the company's name is Nick. Consisting of almost 137,000 ounces of concentrate 62,500 ounces of dore at an average realized gold price of $18.66 per ounce. After deducting cost of goods sold of 100 and €16,000,000 The company generated income from mining operation of €172,000,000 It is important to remember that revenues And net income from mining operations for 2020 were limited to the period between March 1 following declaration of commercial production and December 31, which we refer to as our 2020 operating period. In addition, operations were significantly impacted the suspension of operations for the entire Q2 of 2020 due to the COVID-nineteen pandemic.
The call over to Mr. President. Net revenues achieved by the company in the Q4 totaled $189,000,000 resulting from 106,190 ounces of gold sold, the company's name, consisting of 70,540 ounces of concentrate and 35,650 ounces of dore our shareholders at an average realized gold price of $11.50 per ounce. Cost of goods sold during the quarter Total $94,000,000 comprised of operating expense of $55,500,000 royalties of $11,000,000 and depletion and amortization of 28,000,000 As a result, income from mining operations during the quarter was €95,000,000 During this 1st year of commercial production, the company generated significant cash flow, notwithstanding operating flow effectively only half of the year. During 2020, cash flow from operation was almost $114,000,000 driven by a strong 4th quarter financial performance, during which the company generated cash flow of $95,000,000 after reaching normal operating levels of working capital in the 3rd quarter, following the restart of operation in early July.
The operating cash flow generated in the Q4 represents a significant proportion of the full year total or more specifically $0.41 per share out of $0.50 per share achieved during 2020. The cash flow achieved during this Q4 the significant steady state cash flow generated potential of Fruta del Norte over its current 14 year mine life at current gold prices. Cash operating cost per ounce of gold were $627,000,000 $667,000,000 respectively, for the quarter and for the 2020 operating period and include operating expenses, the oil expenses for March the Q1 2020 after achievement of commercial production. All in sustaining cost per ounce of gold were $7.47 and 7.73 the company's shareholders, respectively, for the quarter 2020 operating period. For both cash operating costs and all in sustaining costs, the Q4.
High land plant recovery rates combined with the processing of high grade ORU in the 4th quarter contributed to these good results. We calculate these non IFRS measures based on goal ounces sold. For reference, all in sustaining costs include operating costs, the company's priorities, corporate social responsibility costs, treatment and refining charges, accretion of restoration provision and sustaining capital all metals silver revenue. I cannot end the review of 2020 operating results without referring to the impact of increasing forward gold prices and market yields on the fair value of our gold prepay and stream facilities. Under the complex accounting principles applied to these debt obligations, the much higher forward gold prices compared to the previous year resulted in the company reporting a large non cash derivative loss in the statement of operations.
At the same time, the higher yields affected the company's risk adjusted discount rate, resulting in an offsetting in similarly large non cash derivative gain. This one reported in the statement of Adaroc, Compa and Sivenca. After accounting for the repayment made in the year, these opposites and individually large non cash derivative impacts resulted in a much smaller net a 10,500,000 increase in the fair value of these debt obligations during 2020. The fair value accounting for these debt obligations create significant volatility in the amounts of the gold prepay and the stream facilities every period, reflected in non cash derivative gains or losses the statement of operation and other comprehensive income. However, I want to highlight 2 key concepts tied to commodity prices.
The operator to the operator. First, actual debt repayments are based on a set number of ounces multiplied by the gold or silver prices at time of repayment. Therefore, high future gold prices will result in higher debt repayment obligation, and this is reflected in the current high fair values of these facilities. Conversely, decreasing future gold prices will result in lower future debt obligations with an expected reversal of derivative losses book to date. Now there is an often overlooked flip side to this when analyzing our debt on the balance sheet.
The operator to the operator. The same projected high future gold prices, if realized in the future, would in parallel also generate high revenues based on expected future production at Fruta del Norte. This would result in a potentially significant positive effect on the company's future cash flow and earnings during the repayment period of these obligations. This is because the net the set number of ounces, which determine the debt repayment obligations, Arba, a relatively small percentage of the forecast production from FTN. Keeping this in mind, the company adjusted net earnings for the Q4 2020 year were €76,000,000 106,000,000 respectively.
After adjusting for the impact of the derivative losses of $91,000,000 for the Q4 and $137,000,000 for the full year the company's operating expenses and costs of $29,000,000 incurred during the suspension of operations in the Q2 of 2020. On a per share basis, adjusted net earnings for the last quarter our $0.33 per share and $0.47 per share for 2020. These 2020 results the company's financial results. We will now begin the financial results of the financial results. Thank you, sir.
We will now begin the Q1 of 2019. We will now begin the Q1 of 2019. Some of its loan facilities after reaching commercial production in the Q1. Finance costs were previously capitalized during the construction period. I briefly touched upon earlier, the company generated positive operating cash flows in 2020, which was effectively limited to the second half of the year following the restart of operations in early July.
With the restart of operations, the company builds steady state working capital, while at the same time satisfied time expenditures, Capital and Exploration and Loan Facility Obligations. In 2020, the company made scheduled principal interest the company's financial results and fee payments under exact facilities totaling almost $78,000,000 This included monthly payments under the stream facilities back commenced in February 2020 and totaled €18,000,000 In December, we made the 1st of 19 quarterly payments under the gold prepay facility the company's total $18,300,000 and principal repayment, totaling $22,800,000 under the senior debt facilities schedule. Repayment of the gold prepay and senior debt facilities will continue quarterly, while the repayment of the stream facility will continue monthly. Senior debt quarterly repayments are variable with larger payment due in the 1st and last quarter of 2021 and smaller ones in the 2nd and third quarter. The company.
As discussed earlier, the repayment amount of the gold prepay and stream facilities will depend on the price of gold during the year. The company ended the year in a good financial position, and we believe we will be in an even stronger one this time next year. Based on current oil prices and our production and AISC guidance, the company expects to generate strong operating cash flow in 2021. The operator to the operator. As a result, we estimate that this cash flow will not only be more than sufficient to meet our obligations under our debt, but will also support exploration the company and the completion of current and planned capital expenditures, including our corporate expansion project, while at the same time building a more the substantial cash balance by the end of 2021.
I think the future looks very bright for Lending Gold. A more detailed discussion of our financial results can be found in the MD and A, and I refer you to this document for more information. Everyone. Now I'd like to turn the call back over to Arnd.
Thank you, Alessandro. Everyone. Looking towards 2021 and further into the future, we at Lending Gold have identified 4 key pillars to drive shareholder value. The operator to the operator. The first is operational excellence.
As I already outlined, we have guided towards 2021 production between 380,420,000 ounces our operator to the operator. Based on average head grade of 10.4 gram per tonne gold and average gold recovery of 90%, the operator to discuss our Q1 AISC of between $770,000,000 $8.30 per ounce gold. We always strive to maximize production and minimize costs, and we will continue to push the mine towards what we believe is achievable. Our 2nd pillar for value creation is throughput expansion. This, the capital project aims at increasing the capital project for expansion aims at increasing mine and mill throughput 20% from 3,500 ton per day to 4,200 ton per day.
The operator to the operator. This entails a relatively small capital expenditure of $18,600,000 and construction and tie in will have no impact on operations. All key pieces of equipment required for this project have been already ordered. The program is well underway and is planned to be completed in the Q4 of 2021. The throughput expansion modifications are also expected to aid flotation performance through additional retention time.
We also see an opportunity to increase our current resources to provide further upside. In line with this, a 10,000 meter underground drill program is underway at FDM and aims to define additional indicated resources focusing on the southern extension of FDM, our shareholders. Currently, only an inferred mineral resource and on areas within the existing current reserve boundaries the operator to convert existing resources into reserves and also increase resources. Finally, Fruta del Norte is at the north end of a major underexplored mineralized trend our next question and answer session. Thank you, and good morning everyone.
Thank you, and good morning everyone. Thank you, and good morning everyone. Thank you, and good morning everyone. Thank you, We will initiate a 9,000 meter drill program in the Q1 of this year, targeting Barbasco and nearby Fuente Princesa. 2 high priority targets located 7 kilometers south of Fruta del Norte along the 16 kilometer long Suarez pull apart basin structure.
Our objective, discover another Fruta del Norte. At Barbasco, we have identified similar surface expressions, structural location and orientation within the basin to Fruta del Norte. So I'm extremely excited to start drilling there. Before finishing, I would like to take this time to mention that I'm very proud of what this Lending Gold team has achieved in 2020. But more than that, I'm proud of what Fruta del Norte has been able to provide local communities, benefiting them both economically and socially.
The company. Furthermore, mining now plays a key role in Ecuador's economic growth, and I believe that Lending Gold the operator to the operator to introduce our shareholders, while simultaneously providing economic and social benefits to local communities and fostering a healthy and safe workplace. Our 4 pillars of value creation the operator. Thank you. And I'll now open the call to questions.
Back to you Sylvie.
Thank you, sir. Ladies and gentlemen, as stated earlier, you. And if you're using your speakerphone, we ask that you please lift the handset before pressing any keys. Everyone. And your first question will be from Trevor Turnbull at Scotiabank.
Please go ahead.
Hey, Ron. I just wanted to Mark to talk a little bit about the mine expansion that you're going through this year. And if you could talk a little bit about how the company to the company. I assume that some of the increased mining capacity is Potentially dependent a little bit on equipment delivery, I know you were enhancing your mining fleet, and I just wonder when that might the expected, but then also I was wondering how much if at all it's dependent on the South Fent raise as well. So maybe if you could just talk about how you see the mining rate kind of increasing through the year?
And then again on procurement for things at the mill, kind of how you see the mill capacity ramping up through the year as well.
Okay. Thanks, Trevor, and thanks for the question. I'll cover the mine and Dave Tekher is on the phone as well and Dave is pretty close to what's going on with the mill and I'll get him to answer that part. On the mine, the key for 2021, actually all we need is 1 of the 2 trucks and that's anticipated to be delivered in June. The key really for the mine is the south vent raise, Trevor.
We need that because we will open up more levels. We are actually mining now on 2 different levels. And so ventilation is becoming a little bit more of an issue, but we're managing it well. The but in order to really ramp up to the 4,200, it is at Southland raise. We're continuing to drill the pilot hole.
Right now, we anticipate that we will wrap that up by the in the Q2. And we have a little bit of flexibility there, Trevor, because under our current plan, the mine was actually going to ramp up to the 4,200 tonne per day, more or less the start of Q3 and the mill is not till the start of Q4. So we would build we were planning to build up stockpile. So So we have a little bit of flexibility there and that we may just not have as much stockpiles as planned available. So the mine, it's at self rent rate, it's not as much procurement.
Dave, do you want to talk to the mill, where we're at with procurement and how that's going to roll out?
Sure. Good morning. Yes, the mill expansion is driven by 3 key pieces of equipment, the flotation cells an additional concentrate filter and additional gravity screen. All those pieces of equipment have been ordered and are in fabrication and they're scheduled to all be delivered about mid year July August timeframe. The rest of the materials, steel, concrete things like that rebar have been ordered and are en route to site.
And we will to start excavation and concrete work in March on that. So we're all on track to get the mill expansion done According to the schedule.
All right. I appreciate that. That's really all I had. Thanks, guys.
Thanks, Trevor. Everyone.
Thank you. Next question will be from Aaron Lamba at TD Securities. Please go ahead.
Thanks. Congratulations Ron on the great 2020. Just two quick ones from me. First, just in regarding to the senior debt facility. I read in the financials, you're going to start accelerated repayments, which is going to be about 30% of the free cash flow.
Is that number like required or is that just kind of flexible based on what you want to pay and when is that expected to start?
Alessandro, do you want to handle that one?
Yes. Yes, happy to. The senior debt actually requires us to make those payments based on the 30% of free cash flow that will accelerate the scheduled repayments and the trigger date to commence those additional repayments is the so called completion, which is a time when certain guarantees fall off and the senior debt considered the construction project We are expecting that to occur in the second half of this year. Whether it's Q3 or Q4, we'll see depending on the terminations by the senior lenders as well.
Okay. That's great. And then just lastly
So it's an obligation, it's not voluntary, if you need To be more precise.
Okay. Thanks. And then just lastly, Ron, on Sunday, the 2 candidates the next question. For the Ecuador elections, were finalized, both to me appear to be pro mining, which is good for the country in general. Can you just talk either about your relationship with the candidates or just kind of your view on the elections now that we're expected to have kind of a pro mining government.
Yes. No, that's a good question, Arun. Yes, There is still a challenge at Yaquep Perez, who was the at the night of the election was in 2nd place, but the company's CEO of the company's CEO of the Board of Directors. Please go ahead. He still has a challenge, but the gap has really widened.
So I think the odds our press release, and I will be happy to take your questions. So both you're correct, both Lassow and Arauos have been Fairleigh Pro Mining in their policies to date. We have met with both the teams And I actually had the opportunity last week of being on a roundtable with Mr. Araus And he answers there was quite a bit about mining, because they do see this as a key part As I stated earlier, in terms of the Ecuador and a key part in order for Ecuador to maintain the U. S.
Dollar. And yes, I think we'll know on April 11, but we feel that both these candidates are strong port mining And they know what they have to focus on, which is the opening of the catastrophe and resolving all these issues around consultation, which is many governments around the world are facing. But yes, I think as I said earlier, I think the future is bright for mining in Ecuador everyone. Great. Thanks.
Thank you. And at this time Mr. Hochstein, it appears that we have no further questions, sir. Please proceed.
Everyone. Okay, great. Well, thanks everyone for taking the time to talk to us this morning. And as always, if some questions come up, you. Please feel free to reach out to myself or Finley Hep Installed and we'd be happy to answer questions.
And thanks very much. Stay safe, stay healthy and look forward to chatting with you in a couple in a few months on Q1. Thank you.
Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. And at this time, we do ask that you please