Kinross Selling Fruta del Norte Gold Project for $240M
Fortress is a member of the Lundin group of companies. The Fortress announcement stated that, subject to shareholder approval, upon closing of the acquisition, Fortress will change its name to Lundin Gold Inc., which will become the principal gold vehicle of companies controlled by the Lundin family, with Fruta del Norte being the flagship asset upon which it will build its gold business.
Kinross acquired the Fruta del Norte project in September 2008 when it acquired Aurelian Resources in a friendly takeover valued at $1.2 billion. The company stopped development work on the project in June 2013 as a result of failed negotiations with the government of Ecuador, which was seeking to impose a 70%, revenue-based windfall profits tax on the project. The Fortress announcement commented that Ecuador has been communicating the potential for mining policy reforms in order to improve international investment in the country’s mining sector.
Fortress characterized Fruta del Norte as a world-class asset, with benefits that include its indicated mineral resource of approximately 23.5 million metric tons (mt) at an average grade of 9.59 g/mt gold, containing 7.26 million oz of gold, and its inferred mineral resource of approximately 14.5 million mt at an average grade of 5.46 g/mt gold, containing 2.55 million oz of gold.
The project has the potential to be a large-scale, low-cost, underground gold mining operation that has had more than $275 million invested in it since its discovery, the Fortress announcement said. It can move quickly through feasibility to a construction decision, leveraging the considerable amount of historical exploration, development, mine planning, and permitting work that has already been completed.