As reported earlier (here), billionaire Swede Lukas Lundin has been in talks with Kinross and the Ecuadorian government for a potential deal on the infamous high-grade gold deposit known as Fruta del Norte.
After 5,200 shares traded today, the Lundin Group shell, Fortress Minerals (FST.H:TSXV) was halted pending news.
As we speculated earlier, this would be the most likely vehicle used to vend in Fruta del Norte.
In October 2007 before Kinross acquired it for $1.2 billion in 2008 (subsequently wrote it down to the tune of $720 million in 2013), Fruta del Norte had 13.7 million ounces of gold at 7.23 g/t.
Rumours have the potential price-tag for the asset of between $100 and $300 million. At $300 million, that would be approximately $22 per in situ gold ounce. A relatively low price and one that reflects the political risk in Ecuador.
This would be the first gold company in the Lundin Group of Companies since they sold Red Back Mining in 2010 for $9.2 billion to Kinross Gold (written down in February 2013 for $2.5 billion).
Because the mining world is so small, it looks like another potential deal between the Lundin’s and Kinross may occur only this time with their roles reversed.
Fortress’ management and Board includes: Ron Hochstein as Chairman (current President of Denison Mines), Lukas Lundin as President and CEO and Mr. Lundin’s son Adam, an institutional salesmen at Nordic brokerage powerhouse Pareto Securities, is on the Board.
We will watch this closely and the breaking news will be covered here. Stay tuned.
Visit the Lundin Group of Companies website: www.thelundingroup.com