Fruta del Norte mine is currently under construction with first gold expected in late 2019. Image: Lundin Gold.
BY ELIZABETH FABRI
NEWCREST will invest $US250 million to acquire a 27.1 per cent interest in Canadian miner Lundin Gold, which is developing the Fruta del Norte gold project in South East Ecuador.
The 340,000 ounce per annum Fruta del Norte project, currently under construction, is aiming for first production by the end of 2019.
Under the deal, Newcrest has the right to appoint two directors to the Lundin Gold board, and one of its nominated directors to a project advisory committee that will oversee Fruta del Norte development.
The companies have also signed a binding Heads of Agreement to form a joint venture that will explore eight early stage concessions held by Lundin Gold.
Newcrest can earn up to a 50 per cent stake in the joint venture company by spending $US20 million over a five year period, including a minimum of $US4 million in the next two years.
Newcrest managing director and chief executive Sandeep Biswas said the equity investment and exploration farm-in partnership was consistent with its strategy of securing high potential orebodies.
“The Fruta del Norte epithermal orebody has many similarities with our Gosowong operation and we look forward to sharing our experience with Lundin Gold to further develop this high-quality deposit,” Mr Biswas said.
“This equity investment aligns with our aspiration of being exposed to five tier 1 orebodies by 2020.”
Lundin Gold president and chief executive Ron Hochstein said the team could now focus on driving the development of Fruta del Norte.
“Newcrest has extensive experience building gold mines and bringing them into production,” he said.
“As our strategic partner, their knowledge and expertise will be valuable as we develop Fruta del Norte into a large, high-grade gold mine.”