Canadian mining firm Lundin Gold has successfully closed a $400m equity private placement financing arrangement, which will be used to fund the construction of its Fruta del Norte gold project in Ecuador.

The company issued 93,497,140 common shares upon closure of the placement and currently has a total of 213,163,980 common shares outstanding.

Australian firm Newcrest Mining now holds 27.1% of Lundin’s outstanding shares as a result of the development.

Zebra Holdings and Investments and Lorito Holdings (the Lundin Family Trusts) own a combined 22.3%, while Orion Mine Finance Group holds 11.4% of the outstanding shares.

"This investment significantly reduces risks around the funding of the project and represents a strong endorsement for Fruta del Norte and our management team."

In addition, Lundin’s board of directors has appointed Orion’s nominee Istvan Zollei as a director of the company.

Lundin Gold president and CEO Ron Hochstein said: “This investment significantly reduces risks around the funding of the project and represents a strong endorsement for Fruta del Norte and our management team.

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“Our focus is currently on underground mine development and construction at site, which are both progressing as planned.

“I would also like to welcome Istvan to the board.

“His experience in the mining sector and international finance will be an asset to the board as we continue to develop the project and grow the company into a mid-tier gold producer.”

The Fruta del Norte project is currently under construction and is located within a 150km-long copper-gold metallogenic sub-province in the Cordillera del Cóndor region.

First gold production from the project is expected to be achieved in 2019.

According to a previously completed feasibility study, the development has probable mineral reserves totalling 4.82 million ounces (oz) of gold and 6.34 million ounces of silver.