TSX-V-listed LunR Royalties has struck a binding agreement with Lundin Gold to acquire a life-of-mine silver stream on the Fruta del Norte (FDN) gold mine in Ecuador for about $670-million.

As upfront consideration, LunR will issue about 50.5-million shares to Lundin Gold, valued at $670-million based on the 20-day volume-weighted average price of LunR shares on the TSX-V as of February 20.

Lundin Gold will distribute the shares to its own shareholders as a dividend in kind and will not retain an equity stake in LunR following completion of the distribution.

Based on current share prices, LunR is poised to become the sixth-largest precious metals royalty and streaming company globally upon closing, said president, CEO and chairperson Adam Lundin, describing the deal as "transformational".

"Life-of-mine (LoM), uncapped streams on premier operations are rare and this transaction establishes LunR as a leading competitor in the space. FDN has significant exploration upside, and the stream structure will allow LunR to surface value from Lundin Gold's continued success for years to come."

The stream will initially cover 100% of FDN’s payable silver production until 12.2-million ounces have been delivered. Thereafter, LunR will purchase 50% of payable silver until a further 7.8-million ounces are delivered, and 7.5% of payable silver for the remaining LoM.

Ongoing payments will be set at 10% of the spot silver price for deliveries up to the first threshold, rising to 20% up to the second threshold and 30% for the balance of the LoM stream.

The stream will apply to all mining concessions related to FDN’s operations, covering about 5 566 ha and including all defined mineral reserves and resources, as well as five early-stage copper/gold/silver porphyry discoveries within the broader project area.

The transaction is expected to close in the second quarter of 2026, subject to due diligence, execution of definitive agreements, shareholder approval, TSX-V approval and other customary conditions.

FDN is widely regarded as one of the highest-grade, lowest-cost operating gold mines globally. The underground mine, which achieved commercial production in February 2020, uses longhole open stoping and drift-and-fill methods with paste backfill. The processing plant has been expanded to a current throughput of 5 500 t/d.

Proven and probable reserves total 25.7-million tonnes grading 7.09 g/t gold and 10.77 g/t silver, containing 5.8-million ounces of gold and 8.9-million ounces of silver. Measured and indicated resources, inclusive of reserves, total 32.6-million tonnes at 7.13 g/t gold and 11.18 g/t silver.

For 2026, Lundin Gold has forecast production of 475 000 oz to 525 000 oz of gold and 500 000 oz to 600 000 oz of payable silver. The company is also evaluating a potential mill expansion beyond 5 500 t/d, with a decision expected in the second half of the year.

A 100 000 m drilling programme, budgeted at $56-million, is planned for 2026, targeting both extensions to the epithermal system and newly identified copper/gold/silver porphyry systems surrounding the main deposit.