LunR Royalties acquires silver stream for $670 million

LunR Royalties Corp. [LUNR-TSXV] has entered into a binding term sheet with Lundin Gold Inc. [LUG-TSX, Nasdaq Stockholm] to acquire a life-of-mine silver stream on the Fruta Del Norte gold mine in Ecuador. The mine is owned and operated by Ludin Gold.

The stream will initially encompass 100% of FDN’s payable silver production with staged reductions, once certain delivery thresholds have been met. In return, LunR will issue approximately 50.5 million shares to Lundin Gold, with a value of $670 million based on the 20-day volume-weighted average price of the company’s shares on the TSX Venture Exchange of $18.18 as of February 20, 2026. Upon closing of the transaction, Ludin Gold intends to distribute the shares to its shareholders as a dividend in kind and will not hold any common shares in LunR once the distribution is complete.

Upon closing, LunR will welcome Newmont Corp. [NEM-NYSE, ASX, PNGX], one of the world’s leading gold miners, as a new major shareholder. Concurrently, LunR intends to appoint a representative from Newmont to its board of directors. Newmont holds an approximate 32% interest in Lundin Gold and is expected to have a greater than 10%-ownership in LunR following Lundin Gold’s distribution of the shares.

LunR shares rallied on the announcement, rising 10.75% or $2.00 to $20.60. The shares trade in a 52-week range of $20.63 and $11.22.

Fruta del Norte is one of the highest-grade operating gold mines in the world. It is forecasted to produce 475,000 to 525,000 ounces of gold and 500,000 to 600,000 ounces of payable silver in 2026.

As a result, the deal establishes LunR as an intermediate precious metals royalty and streaming company. The stream will transform LunR into a precious metals weighted company, while the added scale and cash flow of the pro-forma company will increase LunR’s competitiveness as it pursues future growth.

Lundin acquired Fruta del Norte from Kinross Gold Corp. (K-TSX, KGC-NYSE) in 2014 for $240 million.

The Fruta del Norte deposit is a north-south trending intermediate-sulphidation epithermal gold-silver deposit measuring approximately 1,300 metres along strike and 400 metres down dip.

Lundin was able to acquire Fruta Del Norte for a fraction of the $1.2 billion that Kinross paid for the asset after Kinross was hit with a 70% revenue-based windfall profits tax and halted development after spending US$225 million on drilling.

LunR will purchase 100% of the payable silver production until 12.2 million ounces have been delivered. LunR will then purchase 50% of FDN’s payable silver until an additional 7.8 million ounces have been delivered. Thereafter LunR will purchase 7.5% of the payable silver for the remaining life of mine.

The stream will be effective as of March 1, 2026, with the first delivery of silver to be made following the closing of the transaction.