Lundin secures a $300m debt facility to ensure Fruta del Norte’s development

JOHANNESBURG (miningweekly.com) – Canadian project developer Lundin Gold has secured a $300-million debt facility through commitments from five senior lenders – namely ING Capital, Société Générale, Caterpillar Financial Services Corporation, the Bank of Nova Scotia and KfW IPEX-Bank – for the development and construction of the TSX-listed company’s Ecuador-based Fruta del Norte gold project.

Lundin president and CEO Ron Hochstein said in a note published Monday that, together with the project financing package from Orion Mine Finance Group and Blackstone Tactical Opportunities, this facility 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," he added.

The company noted that the facility would include two tranches of $100-million and $200-million over eight-and-a-half years; there are no mandatory requirements for gold hedging associated with the facility.

Further, the facility is subject to completion of definitive documentation, which will include customary project finance terms, fees and conditions, a comprehensive intercreditor agreement and completion of ongoing due diligence.

Lundin is being advised on the debt financing by Endeavour Financial, while Norton Rose Fulbright Canada acts as legal counsel to the company, with support from the Lexim Abogados law firm in Ecuador.

The Vancouver-based company’s wholly owned Fruta del Norte gold project is located in south-east Ecuador and is one of the largest, highest-grade gold projects currently under construction. Lundin’s board and management team have extensive expertise in mine construction and operations, and are dedicated to advancing this project through to first gold production in 2019.