Kinross Gold Corp., the third-largest Canada-based miner by market value, said it reached a non-binding agreement with Ecuador’s government to develop its Fruta del Norte gold and silver mine in the South American nation.
Kinross said Ecuador agreed “in principle” to a sliding scale of gold royalty fees between 5 percent and 8 percent depending on sale prices, as well as a payment of $65 million toward future royalties, the company said today in a statement published by Marketwire. Kinross didn’t say when a final accord may be reached.
Kinross is the first international mining company to announce a contract accord with Ecuador’s government since a new mining law was passed in 2009 establishing greater state control over the country’s mineral resources. Kinross Chief Executive Officer Tye Burt said in July the Ecuador mine is an “important part” of the company’s growth profile.
“This agreement represents an important milestone in the development of FDN,” Burt said today in the statement.