VANCOUVER, July 9, 2018 /CNW/ - Lundin Gold Inc. ("Lundin Gold" or the "Company") (TSX: LUG, Nasdaq Stockholm: LUG) is pleased to announce that it has closed its previously announced senior secured project finance debt facility of $350 million (the "Facility") with a syndicate of seven senior lenders to fund the development and construction of the Fruta del Norte gold project in Ecuador ("Fruta del Norte" or the "Project"). The Company has also executed a gold concentrate offtake agreement (the "Offtake"). All amounts in this release are in U.S. dollars unless otherwise indicated.

"Fruta del Norte's development continues to be a catalyst for Ecuador's emerging mining sector," said Ron Hochstein, Lundin Gold's President and CEO. "The Facility and the Offtake are the first deals of their kind in the country and have also considerably de-risked the Project from a financial standpoint. Going forward we are pursuing our goal of first gold in the fourth quarter of next year."

Facility Highlights

Tranche A: $250 million senior commercial facility.
Tranche B: $100 million senior covered facility under a raw material guarantee provided by Finnvera plc.
Term: eight years with a maturity date not exceeding June 2026 based on a scheduled amortization, starting at the end of 2020.
Annual interest: three or six-month LIBOR plus an average margin of approximately 5.05% (Tranche A) and 2.50% (Tranche B) over the term. Tranche A and Tranche B are subject to risk mitigation and guarantee fees of 2.00% and 3.15%, respectively.
No mandatory requirements for gold or other forms of hedging are associated with the Facility.

The lenders are ING Capital LLC, Societe Generale, Caterpillar Financial Services Limited (Cat Financial), The Bank of Nova Scotia, Natixis, KfW IPEX-Bank GmbH and Bank of Montreal. The borrower is Aurelian Ecuador SA, the holder of the Project and a wholly-owned subsidiary of Lundin Gold.

The initial draw down of the Facility is not expected to occur until the first quarter of 2019 and is subject to customary conditions precedent and establishing a cost overrun facility. Discussions for the provision of this facility are underway with selected potential parties.

Offtake Agreement
Under the Offtake, the Company will sell approximately half of its gold concentrate production over its first eight years of operations to Boliden, a high-tech metal company with a network of mines and smelters across Europe.

Advisors

Lundin Gold was advised by Endeavour Financial on this transaction. Norton Rose Fulbright Canada LLP acted as legal counsel to the Company with support from the Lexim Abogados law firm in Ecuador.

About Lundin Gold

Lundin Gold, headquartered in Vancouver, Canada, is developing its wholly-owned Fruta del Norte gold project in southeast Ecuador. Fruta del Norte is one of the world's largest, highest-grade gold projects currently under construction. The Company's board and management team have extensive expertise in mine construction and operations, and are dedicated to advancing this project through to first gold production in the fourth quarter of next year.

The Company operates with transparency and in accordance with international best practices. Lundin Gold is committed to delivering value to its shareholders, while simultaneously providing economic and social benefits to impacted communities, fostering a healthy and safe workplace and minimizing the environmental impact. The Company believes that the value created through the development of Fruta del Norte will benefit its shareholders, the Government and the people of Ecuador.

Additional Information

The information in this release is subject to the disclosure requirements of Lundin Gold under the EU Market Abuse Regulation. This information was submitted for publication July 9, 2018 at 5:00 a.m. PT through the contact persons set out below.

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Caution Regarding Forward-Looking Information and Statements
Certain of the information and statements in this press release are considered "forward-looking information" or "forward-looking statements" as those terms are defined under Canadian securities laws (collectively referred to as "forward-looking statements"). Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, identified by words or phrases such as "believes", "anticipates", "expects", "is expected", "scheduled", "estimates", "pending", "intends", "plans", "forecasts", "targets", or "hopes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "will", "should" "might", "will be taken", or "occur" and similar expressions) are not statements of historical fact and may be forward-looking statements. etc. etc.

SOURCE Lundin Gold Inc.