Lundin Gold Inc. signed an exploitation agreement for its flagship Fruta del Norte gold property in Ecuador, giving it the right to develop and produce gold from the site for 25 years.

The agreement includes advance royalty payments totaling US$65 million to the government of Ecuador, with a US$25 million payment to be paid shortly and the balance due in two equal installments of US$20 million on the first and second anniversary of signing.

In addition, Fruta del Norte will be subject to a royalty equal to 5% of net smelter revenues from production, according to the company's Dec. 14 statement. The advance royalty payment is deductible against future royalties payable.

In August, Lundin Gold closed a C$94.9 million bought-deal offering to fund development of Fruta del Norte, to repay debt and for general corporate purposes.