Lundin Gold Inc. said Feb. 25 that it plans to raise US$400 million in a private placement to fund the development of its Fruta del Norte gold project in Ecuador, which is expected to achieve first production by the end of 2019.

Newcrest Mining Ltd., Orion Mine Finance Group and Zebra Holdings and Investments Sarl and Lorito Holdings Sarl, or the Lundin Family Trusts, are taking part in the offering, which will comprise 93,497,140 shares at an average subscription price of C$5.44 apiece.

Under the terms, Newcrest and the Lundin Family Trusts will invest US$250 million and US$50 million, respectively, while Orion will invest US$100 million. Newcrest will own 27.1% of Lundin upon closing, while the Lundin Family Trusts and Orion will each hold stakes of 22.3% and 11.4%, respectively.

Newcrest will be given the right to appoint two members to Lundin's board while Orion will have the right to name one member.

The placement is expected to close by March 31. It follows a US$300 million finance facility for Fruta del Norte that was announced in January.

In addition, Lundin and Newcrest agreed to form a joint venture to explore eight concessions surrounding the property. Newcrest can earn up to a 50% stake in the venture by spending US$20 million over five years.