31 May Lundin Gold secures financing deal for landmark Ecuador project
Lundin Gold (TSX:LUG) has announced a finance package of US$400-450 million for the development of the landmark Fruta del Norte project in Ecuador.
The projects financing deal was agreed with private equity groups Orion Mine Finance Group and Blackstone Tactical Opportunities, and is comprised of a gold prepay credit facility for $150 million, and a stream loan credit facility of $150 million.
In addition, $100-150 million of committed participation to future equity financings required to fund the project is also included in the finance deal.
Although the project is currently 100% owned by Lundin, the deal also grants Orion and Blackstone the right to purchase 50% of Fruta del Norte gold production, up to a maximum of 2.5 million ounces.
“We are very pleased with the financial commitments that Orion and Blackstone have made towards the development of the Fruta del Norte project and Ecuador,” said Ron Hochstein, Lundin’s president and CEO.
Fruta del Norte represents Ecuador’s largest undeveloped gold resource with 4.8 million ounces of gold estimated to be present at the mine.
Lundin is targeting an annual gold production of 300,000 ounces over 15 years at the site.