(Reuters) - Canadian firms Franco-Nevada and Osisko Gold Royalties will invest $750 million in SolGold's under-development Cascabel gold and copper project in Ecuador in exchange for a portion of the gold produced from the mine, the companies said on Monday.
The funding will be provided in two phases, with the first $100 million allowing SolGold to conduct feasibility studies and secure the necessary permits to make a final investment decision on the project, which is expected to cost $1.55 billion to build.
The remaining $650 million will fund the construction of the project, located in the northern Ecuadorean province of Imbabura, which is considered a major deposit of gold, copper and silver.
Franco-Nevada and Osisko would provide 70% and 30% of the total investment, respectively.
The companies will receive a combined 20% of the recovered gold until SolGold has provided 750,000 ounces of gold.
Following this milestone, the percentage will reduce to 12% for the life of the mine, SolGold said.
In June, Ecuador signed a contract with SolGold for the development of the project, which is expected to generate an investment of over $4.2 billion during its 28 years of operation, according to Ecuador's energy ministry.
Australia's BHP Group, Gold miner Newmont through Newcrest and China's Jiangxi Copper own stakes in SolGold, according to LSEG data.
(Reporting by Sourasis Bose in Bengaluru; Editing by Tasim Zahid)
