Loading ...Ecuador has signed a contract with Canada’s Lundin Gold (TSX:LUG) that allows the miner to move ahead with its Fruta del Norte gold project, the country’s largest.
The Vancouver-based company plans to build and operate an underground mine, along with a processing centre at the site, located in the southeastern Amazon province of Zamora Chinchipe.
The company stock was soaring this morning on the news, delivered after market close Wednesday. It was up 3.6% to Cdn$5.18 in Toronto at 11:40 am.
“In just under two years, working cooperatively with the Government of Ecuador, we have negotiated this key agreement and completed the Feasibility Study for FDN, paving the way for the development of this world-class asset,” chairman Lukas Lundin said in a statement.
As part of the deal, Lundin Gold will have to pay advance royalties totalling $65 million to the Government of Ecuador, of which $25 million will be paid within the next few days.
The balance is expected to be delivered over the next two years, with $20 million due on the one-year anniversary and $20 million due on the second anniversary of signing.
A 5% NSR is also payable from production, and the advance royalty payment is deductible from future royalties payable.
cont. http://www.mining.com/ecuador-grants-lundin-key-permit-for-its-fruta-del-norte-gold-mine/