Newcrest Mining has acquired a further US$79.6 million ($116.5 million) worth of Lundin Gold shares, increasing the Australian gold company’s ownership to 32 per cent.
Originally acquiring 27.1 per cent interest in Canada’s Lundin as part of a $400 million private placement, the two companies signed an exploration agreement in 2018.
Newcrest committed to investing US$4 million over the next two years with a further option to invest US$6 million over the following 18-month period to earn an initial 25 per cent share.
The gold miner has achieved 32 per cent ownership of Lundin in less than two years.
Additionally, if Newcrest invests $US20 million in the assets over five years, the company is set to own a 50 per cent interest in eight exploration properties in Ecuador.
After an additional US$79.6 million at a 4.2 per cent discount to the last trade price, Newcrest will explore the potential of Ecuador for epithermal gold and deep gold-copper porphyry deposits with Lundin.
The JV is part of Newcrest’s strategy to build a high-quality exploration portfolio, with managing director and chief executive officer Sandeep Biswas saying the company is aspiring to be exposed to five Tier 1 orebodies by 2020.
“This was a great opportunity to increase our exposure to Fruta del Norte, a Tier 1 asset, which is expected to commence commercial production in the June 2020 quarter,” Biswas said.
Lundin Gold’s Fruta del Norte is a high-grade underground gold-silver mine in south-eastern Ecuador.