Canada-based Kinross Gold has signed a deal with Fortress Minerals, a division of the Lundin Group, to sell its 100% stake in Aurelian Resources and the Fruta del Norte (FDN) project in Ecuador for $240m.
Of the total amount, Fortress will pay $100m to $190m in cash and the balance in equity.
Kinross CEO J Paul Rollinson said: “We are pleased to have reached this agreement and would like to express our appreciation to the Government of Ecuador for their support during the FDN transition process.
“We believe that Fortress Minerals, as part of the Lundin Group of companies, is very well-positioned to take FDN to the next stage in its development.”
Kinross acquired the project in 2008 during its $1.2bn takeover of Aurelian Resources. However, work was suspended at the mine in 2013 when the government refused to relax a 70% windfall tax, forcing the company to sell the project, reported Reuters.
In June this year, an Ecuador cabinet minister noted that the country plans to change its mining law and provide tax incentives to persuade international investors to the industry.
Meanwhile, the Ecuador Government has assured to provide its full support for the transaction.
The transaction is subject to certain conditions, including Fortress shareholder and stock exchange approval, and is expected to be completed by mid-December.