Dundee Precious Metals Inc. agreed to acquire a 19.5% stake in INV Metals Inc. through a C$10 million investment in a C$15.6 million private placement by the latter priced at 40 Canadian cents per share.

INV Metals said Oct. 21 that it will issue 25.0 million shares to Dundee, which is expected to help INV Metals advance the Loma Larga gold project in Ecuador. INV Metals' shares rose by nearly 9% in Toronto morning trade after the news.

INV Metals noted that Dundee owns the Chelopech gold-copper mine in Bulgaria, which has similar characteristics to the Loma Larga deposit, and the Tsumeb smelter in Namibia, which may process the copper-gold concentrate from Loma Larga. Dundee also recently completed the permitting, construction and ramp-up of the Ada Tepe gold mine in Bulgaria.

IAMGOLD Corp. also agreed to participate in the placement, committing to buy 13,889,880 shares for C$5.6 million to maintain its pro rata share ownership of about 35.6%.

INV Metals said it will use the proceeds to start permitting work for Loma Larga, launch an initial 2,000-meter drill program at the Tierras Coloradas gold project in Ecuador, and for general corporate purposes.

In September, the company said it would start advancing Loma Larga after Ecuador's Constitutional Court threw out an application for a referendum to ban mining in the country's Azuay province and the Camilo Ponce Enriquez canton.

Earlier in the year, INV Metals said it would relocate the project's processing and tailings facilities as a referendum in the Girón Canton subdivision of Azuay resulted in a vote against mining in the region.