Canada-based Lundin Gold has secured up to $450m to fund development of its Fruta del Norte project in Ecuador from Orion Mine Finance Group and Blackstone Tactical Opportunities.
Orion and Blackstone have also been granted the right to buy 50% of gold production in the project, up to a maximum of 2.5 million ounces at a price based on monthly delivery dates and a defined quotation period.
The financing model involves $150m gold prepay credit facility, a stream loan credit facility of $150m and committed participation of $100m to $150m to future equity financings that may be needed to fund the project.
Lundin Gold president and CEO Ron Hochstein said: "It confirms the strength of this project and gives us the ability to move full speed ahead with construction."
The gold pre-pay agreement comprises a senior secured loan of $150m secured by Lundin’s subsidiary Aurelian Ecuador, which holds the Fruta del Norte project.
Under the package, half of the loan amount will be advanced at or after closing, with the remaining amount to be drawn up to the end of June next year.
The loan is repayable in 19 fixed quarterly principal and interest instalments equivalent to the value of 11,500oz of delivered gold starting in December 2020.
Lundin could defer the quarterly instalments for up to four quarters, but this arrangement will attract increased gold deliveries of 1,000oz of gold for each deferred quarter.
Orion and Blackstone have also agreed to participate in future equity financings of Lundin Gold.