Lundin Gold has gained a $300m senior secured project finance facility through commitments from a syndicate of lenders to fund development and construction of its Fruta del Norte gold project in Ecuador.

The syndicate of lenders includes ING Capital, Société Générale, Caterpillar Financial Services, The Bank of Nova Scotia and KfW IPEX-Bank.

Lundin Gold president and CEO Ron Hochstein said: “Together with the project financing package from Orion Mine Finance Group and Blackstone Tactical Opportunities, this facility further reflects a strong endorsement of the project and confidence in the Lundin Gold team.

“We look forward to working with this supportive group of lenders as we continue to develop Fruta del Norte. The project remains on schedule and on budget to achieve first gold production by the end of 2019.”

To be exercised over two tranches, the facility will have a term of eight and a half years.

“The project remains on schedule and on budget to achieve first gold production by the end of 2019.”

The first tranche includes $100m to be guaranteed by an export credit agency (ECA) satisfactory to the lenders, while the second tranche comprises $200m.

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The facility does not have any mandatory requirements for gold hedging.

According to Lundin, the facility is conditional upon completion of definitive documentation, which is expected to contain customary project finance terms, fees and conditions, a comprehensive inter-creditor agreement, and completion of ongoing due diligence.

The Fruta del Norte deposit is located in the Cordillera del Cóndor region.

Based on a feasibility study, the project is said to have probable mineral reserves totalling 4.82 million ounces of gold and 6.34 million ounces of silver.

Furthermore, it was determined that the project has a pre-tax net present value (NPV) of $1.28bn and an internal rate of return (IRR) of 23.8%.