The Fruta del Norte gold project, in Ecuador, has been significantly derisked from a financial standpoint with the closing of a $350-million senior debt facility and the signing of an offtake agreement for about half of its production over the first eight years of operation.
A syndicate of seven lenders, including ING Capital, Societe Generale, Caterpillar Financial Services (Cat Financial), the Bank of Nova Scotia, Natixis, KfW IPEX-Bank and Bank of Montreal, provided the project finance facility, TSX-listed Lundin Gold reported on Monday.
The funding will be used for the development and construction of the 340 000 oz/y Fruta del Norte gold mine, in the Cordillera del Condor region. Over its 13-year mine life, the mine is forecast to produce 4.4-million ounces of gold and 5.2-million ounces of silver.
Lundin has agreed to sell about half of the gold concentrate production from the mine in the first eight years of operations to high-tech European metal company, Boliden.
The miner is targeting first gold production from Fruta del Norte in the fourth quarter of this year.
Lundin Gold president and CEO Ron Hochstein said in a statement that the debt facility and the offtake agreement were the first deals of their kind in Ecuador.