TORONTO (miningweekly.com) – TSX- and NYSE-listed Kinross Gold on Wednesday said it had completed the divestment of all of its interest in Aurelian Resources and the Fruta del Norte project, in Ecuador, to Fortress Minerals, a member of the Lundin Group of Companies, for $240-million.
Payment consisted of $150-million in cash and $90-million in Fortress common shares.
"We believe this is a win-win transaction for both Kinross shareholders and the future of the Fruta del Norte project. The sale further strengthens Kinross' balance sheet as the company focuses on its strategic priorities.
“At the same time, Kinross' equity position in Fortress could provide it with an opportunity to benefit from the project's development,” Kinross CEO Paul Rollinson said.
Kinross received about 26.12-million Fortress shares, issued at a price of C$4 apiece, resulting in Kinross owning about 25.8% of Fortress' outstanding common shares. The sale was subject to various conditions, including the granting of certain approvals by the government of Ecuador, which had all been provided.
Kinross last year booked a $720-million charge related to the discontinued FDN. Kinross shelved the project after it and the Ecuador government could not agree on a 70% windfall tax.
Discovered in 2006, FDN is one of the largest and highest-grade, undeveloped gold projects in the world with an indicated resource of about 23.5-million tonnes at an average grade of 9.59 g/t gold, containing 7.26-million ounces of gold. The project's inferred resource is about 14.5-million tonnes at an average grade of 5.46 g/t gold, containing 2.55-million ounces with additional significant resource upside potential.