Lundin Gold Inc. (TSE: LUG) will sell a silver stream on its Fruta del Norte mine in Ecuador for newly issued shares of LunR Royalties Ltd. (CVE: LUNR) valued at about CAD$670 million, or roughly USD$490 million.
The deal converts a small silver byproduct into a large equity stake in a growing royalty company. Additionally, it ties Lundin Gold more closely to the broader Lundin group’s royalty platform.
LunR Royalties emerged last year as a spin-out of NGEx Minerals Ltd. (TSE: NGEX). The new company holds net smelter royalty interests across Latin America. Meanwhile, NGEx continues to advance the Lunahuasi copper project in Argentina. It also operates the Los Helados joint venture in Chile with Japan’s JX Advanced Metals.
Adam Lundin, who chairs Lundin Mining, leads LunR as president and chief executive officer. He has positioned the company as a consolidator of mining royalties in the region.
Trading in LunR began on Dec. 19, 2025. Since then, the stock has nearly doubled as copper prices climbed to record highs. The shares recently traded near CAD$21.50, giving the company a market value of about CAD$1.5 billion, or USD$1.1 billion.
Under the agreement, LunR will purchase all payable silver from Fruta del Norte until 12.2 million ounces have been delivered. Subsequently, it will buy half of payable silver until another 7.8 million ounces are delivered. Thereafter, LunR will purchase 7.5 per cent of payable silver for the remainder of the mine’s life.
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Fruta Del Norte ranks among highest-grade gold mines
The mine currently has an estimated 12-year life. The silver stream is expected to take effect on March 1.
In exchange, Lundin Gold will receive about 50.5 million LunR shares. The companies priced those shares at LunR’s 20-day volume-weighted average price as of Feb. 20, 2026. Consequently, the total value of the consideration reaches approximately CAD$670 million.
Lundin Gold said silver accounts for only 1 to 2 per cent of its total revenue. The company expects to produce between 500,000 and 600,000 ounces of payable silver in 2026.
Executives described the transaction as a way to turn a minor byproduct into a meaningful ownership stake. Furthermore, they said the structure allows shareholders to gain exposure to a dedicated royalty company without selling the core gold asset.
Company representatives said the move captures immediate value while preserving long-term upside. They added that LunR gains confidence in Fruta del Norte’s quality and exploration potential through the stream.
Fruta del Norte sits in southeast Ecuador and ranks among the highest-grade gold mines globally. Lundin Gold acquired the asset in late 2014. It brought the mine into commercial production in February 2020, ahead of schedule.
The company now runs a near-mine expansion program. Additionally, it plans to invest about USD$100 million this year to expand reserves and extend mine life.
Current reserves stand at about 5.8 million ounces of gold and 8.9 million ounces of silver. Consequently, management believes further drilling could support additional production over time.
For LunR, the deal shifts its profile toward precious metals. Additionally, it adds scale and expected cash flow to the royalty portfolio.
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Silver has been volatile in 2026
Adam Lundin said long-life, uncapped streams on high-quality mines rarely become available. He added that the transaction positions LunR as a stronger competitor among global royalty and streaming companies.
Based on current metal prices, he said LunR would rank as the sixth-largest precious metals royalty and streaming company worldwide after closing.
Silver in 2026 has followed a volatile but upward-leaning trajectory. Prices surged sharply early in the year, driven by strong investment inflows and tight physical supply, before pulling back on profit-taking. Even with corrections, silver remains well above its long-term average, reflecting sustained demand momentum.
Geopolitical instability has played a major role. Ongoing trade tensions, shifting tariff policies, and regional conflicts have increased safe-haven buying. Investors often turn to precious metals during uncertainty, and silver has benefited alongside gold. Additionally, concerns about sovereign debt levels and persistent inflation pressures have supported hard-asset demand.
Industrial demand also strengthens the outlook. Silver remains critical for solar panels, electric vehicles, and advanced electronics. However, elevated prices have encouraged substitution efforts and efficiency gains. Meanwhile, central bank policy expectations continue to influence short-term swings, especially around interest rate signals and U.S. dollar strength.
The companies expect to complete the transaction in the second quarter of 2026.
