ECUADOR – Kinross Gold Corp. of Toronto has sold its Fruta del Norte gold project to Vancouver’s Fortress Minerals Corp., a member of the Lundin Group. The price is reported to be US$240 million in cash and equity.
Depending on the amount Fortress raises with an equity financing, Kinross will receive between US$100 million and US$190 million. The Lundin Family Trust has committed up to US$100 million. The balance of the sale price will be paid in Fortress shares. The transaction is expected to be completed by mid-December 2014.
Kinross announced in August 2013 that it was suspending development at Fruta del Norte in the face of extreme tax demands from the Ecuadorian government. This time around, the government reportedly supports the change in ownership. Kinross and Fortress have entered into talks aimed at creating bilateral agreements to facilitate development.
Fortress considers that Fruta del Norte has the potential to be a large scale, low cost, underground mine. So far US$275 million has been spent at the site. The indicated resource is 23.5 million tonnes at 9.49 g/t Au, and it contains 7.26 million oz of gold. The inferred portion is 14.5 million tonnes at 5.46 g/t and it contains 2.55 million oz.
Lukas Lundin, president, CEO and director of Fortress commented, “FDN is one of the most significant gold discoveries in the last 15 years and we believe tremendous value can be generated through its development. Our team is very enthusiastic about working on FDN and we are confident in our ability to rapidly advance the project to a construction decision and obtain the required permits to build this world class gold asset. This acquisition is the first step in the building of our gold company, Lundin Gold, to carry on our previous successes in the gold industry which included the Alumbrera and Veladero gold deposit discoveries in Argentina in the 1990s.”
The Fortress website is at FortressMinerals.com.