The largest gold producer in Australia, and one of the largest gold producers in the world, has entered into an agreement to invest $250 million in a Canadian mining operator.
Newcrest Mining has announced that it will invest $250 million to increase its current stake in Canadian Lundin Mining to 27.7%.
The investment is part of a wider commitment to invest $400 million to fund the development of Lundin’s flagship Fruta del Norte mine in Ecuador.
The Fruta del Norte (FDN) deposit is located within a 150 km long copper--gold metallogenic sub-province located in the Cordillera del Cóndor region.
The project has probable mineral reserves of 4.82 million ounces of gold and 6.34 million ounces of silver. Lundin expects to reach an estimated average annual gold production of 340,000 ounces.
First gold production has been targeted for Q1 2020, with full production coming in 2021.
Newcrest has also entered into a joint venture agreement to explore eight early stage concessions held by Lundin Gold.
This will see Newcrest earn up to a 50% interest in the joint venture company by spending US$20 million over a five-year period.
Through the agreement, Newcrest is committed to spend a minimum of US$4 million over the next two years and has the option to spend a further US$6 million over the following 18-month period to earn an initial 25% interest.
By spending an additional US$10 million within five years, Newcrest can earn a further 25% interest. Newcrest will manage the exploration activities and be the manager of the joint venture company, once formed.