Lundin Gold Inc. has received a notice of assessment from Ecuador's tax authority, the Servicio de Rentas Internas, regarding a sovereign adjustment for the 2023 fiscal year at the Fruta del Norte mine.

The assessment proposes a payment of $73 million alongside $81 million in potential fines and penalties, totaling $154 million excluding interest. Lundin Gold maintains that the calculation stems from a misinterpretation of the sovereign adjustment methodology established in the operation's Exploitation Agreement.

The company stated that the tax notice does not impact current mining operations, previously issued guidance, expansion plans, or its capital return strategy. Fruta del Norte continues to operate normally while the company prepares to challenge the assessment through official channels.

“Lundin Gold has a positive and constructive relationship with the Government of Ecuador and we intend to work through the appropriate channels to resolve this matter. Based on our review, we believe the assessment results from a misinterpretation of the calculation methodology set out in our Exploitation Agreement. We remain confident in our interpretation and will take the appropriate steps to escalate this issue to protect our rights under our agreements.”

— Jamie Beck, President and CEO

Read the full announcement: Lundin Gold Receives Notice of Assessment Regarding Sovereign Adjustment