Leading gold miner Newmont has finalised the sale of a stream credit facility and offtake agreement for the Fruta del Norte gold mine, in Ecuador, to Lundin Gold for $330-million.

The agreement, unveiled on Thursday, forms part of Newmont’s ongoing efforts to monetise noncore assets following its acquisition of Newcrest in 2023.

Newmont said the transaction underscored its commitment to delivering at least $2-billion in near-term cash improvements through portfolio optimisation within the first two years of buying Newcrest. The early repayment of the facilities is a step in delivering on the commitment.

Meanwhile, in a separate news release, Lundin CEO Ron Hochstein said that the company had successfully cleared all project finance debt, achieving debt-free status just four years after commencing commercial production at Fruta del Norte.

“Upon closing, the company will be debt-free and have increased exposure to rising gold prices, resulting in increased amounts of free cash flow to support capital allocation initiatives, including further growth and shareholder returns,” said Hochstein.

The stream facility and offtake were established in 2017 as part of a project financing package to fund the development and construction of Fruta del Norte. The stream facility was repayable in variable monthly instalments equivalent to the value of 7.75% of gold production less $408/oz and 100% of the silver production less $4.08/oz up to a maximum of 350 000 oz of gold and six-million ounces of silver.

The offtake provided Newmont the option to purchase 50% of Fruta del Norte's gold production up to 2.5-million ounces at a price based on a defined quotational period.

The negotiated purchase price for the stream facility and the offtake of $330-million is payable in cash, with the first tranche of $180-million owing on closing of the transaction which is targeted for June 28, 2024.

In retaining an equity interest in Lundin, Newmont has continued exposure to the Fruta del Norte operation while unlocking value from its noncore assets.

Newmont has identified six assets and one project as noncore, putting them up for sale.