ECUADOR – Vancouver-based Lundin Gold has made a US$400-million private placement that, with the recent senior debt facility, provides the funding to complete development of the Fruta del Norte gold project in the Cordillera del Condor region.
Visible gold in drill core from the Fruta del Norte deposit in Ecuador. (Image: Lundin Gold)
Lundin issues approximately 93.5 million common shares at a weighted average price of C$5.44 each. Subscribers include Newcrest Mining, Orion Mine Finance, Zebra Holdings, and Lorito Holdings (the Lundin family trusts). Newcrest is investing $250 million, Orion US$100 million, and the Lundin family trusts US$50 million.
Upon closing, Newcrest will own 27.1% of Lundin, the Lundin family trusts will hold 22.3%, and Orion will own 11.4%. As the largest shareholder, Newcrest has the right to appoint two members to the Lundin Gold board; Orion will appoint one.
Newcrest has become a strategic investor in Lundin, giving the Australian company anti-dilution rights and the opportunity to assign three employees to the Fruta del Norte project. Orion has also been granted anti-dilution rights.
Newcrest and Lundin plan to establish a joint venture to explore eight early stage concessions held by Lundin to the north and south of Fruta del Norte (excluding a certain large block of concession surrounding the Fruta deposit).
Detailed information about the Fruta del Norte development is available at www.LundinGold.com.