• London
  • Vancouver
  • Camana Bay

US$750mTransaction amount

Fruta Del Norte / Lundin Gold

Structure and arrangement of project financing for the construction of the Fruta del Norte Project in Ecuador.

Background

Endeavour advised Lundin Gold on the financing of the US$750 million Fruta Del Norte Gold Project in Ecuador. It is among the largest and highest grade undeveloped gold projects in the world.

Comprehensive role advising the project sponsor including:

  • Developing financing plan, contractual structure and technical assistance
  • Managing independent consultants
  • Negotiations with offtakers / smelters, in conjunction with financing solution
  • Negotiations with third party finance providers
  • ECA (Finnvera) arrangement and negotiation
  • Financial modelling, term sheets and document negotiations

Key Contacts

David Rhodes

Managing Director


Daniel Hill

Director


Challenges

  • Long development and ramp-up period
  • Intercreditor relations and multiple sources of funding
  • Country risk

Solutions

  • Early engagement to negotiate mining and stability agreements with Government to ensure fully bankable
  • Employed a multi-tranche and phased financing approach as the project de-risked through the engineering and development
  • Initial US$300m stream loan and gold prepay facility (+ US$100m equity commitment) was structured to allow the senior debt to be brought in at a later date
  • Used offtake to underpin Finnish Government support through the Finnvera Raw Materials Guarantee scheme
  • Senior debt facility consisted of a seven bank + Finnvera club for US$350m which was signed in July 2018

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