Newcrest Mining Limited, an Australian firm engaged in the exploration, mining, & sale of gold & copper, has reportedly purchased 27.1% of shares of Lundin Gold Inc., a Canadian gold mining firm. The firm seems to be on the verge of wanting to expand its gold mining operations in Ecuador.
For the uninitiated, this stake is a part of an equity fund worth USD 400 million by Lundin Gold that has been raised for the Fruta del Norte gold project in the South American country. According to Mining Weekly, the region consists of mineral reserves estimated at 4.82 million ounces of gold along with 6.34 million ounces of silver. Apart from Newcrest, other investors in the project include Lorito Holdings, Zebra Holdings, and Orion.
Reports state that the gold mine is projected to manufacture 4.4 million gold ounces and 5.2 million silver ounces over its thirteen-year life cycle. The mine will commence its production activities by the end of next year. Newcrest has announced that it will pay nearly USD 4.35 for each Lundin share and will recruit two directors to its board. The strategic move is likely to help Newcrest to expand its business and cover the losses it may incur as a result of winding up its Gosowong project in Indonesia by 2021.
Reportedly, Lundin and Newcrest have formed a joint venture for exploring eight early phase concessions in South & North of Fruta Del Norte Project. The Australian mining firm is forecast to earn nearly 50% of interest by investing USD 20 million over a span of five years in terms of project exploration.
Newcrest’s key officials affirm that they plan to invest nearly USD 4 million in the joint venture over the coming two years with an alternative to provide funds worth USD 10 billion in the next 18 months for 25% interest in the newly established combined entity.