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company also negotiated the terms of an
Exploitation Agreement (EA) in January
2015 and most recently an Investment
Protection Agreement (IPA). The EA sets
out the fiscal and operating regime for the
mining of the Fruta del Norte deposit. The
IPA guaranteed, among other benefits, an
income tax rate fixed at 22%, exemption
from the capital outflow tax of 5% on pay-
ments of principal and interest to financial
institutions outside of Ecuador, and no
restrictions to produce and sell minerals.
Hochstein stated, "The successful
conclusion of negotiations on the IPA is
another significant milestone in the devel-
opment of the Fruta del Norte Project. The
legal stability and economic certainty con-
templated by this agreement are critical to
the company's ability to embark on project
financing and to realize its goal of building
a high-grade gold mine in Ecuador. Lundin
Gold continues to enjoy the support and
cooperation of the Government of Ecuador
and local governments and communities."
The Fruta del Norte Project is becom-
ing a major employer in Ecuador with
peak employment during construction
expected to top 2,000 workers with some
900 employees estimated to be needed for
mine operations. Training will be offered
for both semi-skilled and skilled jobs. In
addition, the mine will create many indi-
rect jobs for suppliers and services. Lundin
Gold is also committed to community
investment, small business development as
well as cultural support.
Project construction is expected to start
in mid-2017 with first production sched-
uled for Q1 2020. On August 9, 2016,
Lundin Gold reported closing the second
tranche of a $94.9 million bought-deal
equity financing. Proceeds are being used
to fund the Early Works program that
includes basic engineering, field programs
and optimization of capital costs estimates.
The Fruta del Norte Project is road-
accessible from Loja, the fourth largest city
in Ecuador, by paved and gravel roads.
n
Lundin gold's Fruta del Norte gold project
in southeast ecuador. photo courtesy Lundin
gold Inc.
