Lundin Gold Monetizes Silver Byproduct in $670 Million Stream Deal with LunR
February 22, 2026 · by Fintool Agent
Lundin Gold announced a $670 million silver stream transaction with LunR Royalties, converting a minor byproduct from its world-class Fruta del Norte mine into immediate shareholder value.
The deal showcases a sophisticated capital allocation strategy: rather than diluting shareholders with equity or taking on debt, Lundin Gold is monetizing a revenue stream that represents just 1-2% of its total output—unlocking hundreds of millions in value from what amounts to a rounding error in its operations.
The Transaction
Under the binding term sheet, Lundin Gold will sell a life-of-mine silver stream on Fruta del Norte to LunR Royalties in exchange for approximately 50.5 million newly issued LunR shares, valued at $670 million based on LunR's 20-day volume-weighted average price as of February 20, 2026.
The stream covers 100% of Fruta del Norte's payable silver production until 12.2 million ounces have been delivered. After that threshold, coverage drops to 67% until a second milestone is reached, then falls to 34% for the remainder of the mine's life—a structure that rewards LunR with higher initial exposure while giving Lundin Gold back more silver optionality as the mine matures.
Lundin Gold will not retain any LunR shares after closing. Instead, it plans to distribute all 50.5 million shares to its shareholders as a dividend-in-kind—a tax-efficient mechanism that puts the streaming company's equity directly into shareholder hands.
Ask Fintool AI AgentNewmont Enters the Picture
The most intriguing angle is what this means for Newmont Corporation. The world's largest gold miner owns approximately 32% of Lundin Gold. After the share distribution, Newmont will automatically become a greater-than-10% shareholder in LunR Royalties—and will gain a board seat as part of the transaction.
For Newmont, this represents an elegant backdoor entry into the royalty and streaming sector. The company generates massive cash flows—$9.5 billion in levered free cash flow over the past four quarters—and has been deleveraging its balance sheet while maintaining its position in high-quality assets like Fruta del Norte.
| Metric | Q1 2025 | Q2 2025 | Q3 2025 | Q4 2025 |
|---|---|---|---|---|
| Revenue ($B) | $5.0 | $5.3 | $5.5 | $6.8 |
| Net Income ($B) | $1.9 | $2.1 | $1.8 | $1.3 |
| Cash Position ($B) | $4.7 | $6.2 | $5.6 | $7.6 |
Royalty and streaming companies like Franco-Nevada trade at premium multiples because of their capital-light models and exposure to metal prices without operating risk. Franco-Nevada's adjusted EBITDA margin regularly exceeds 80%, compared to the 35-45% margins typical of operating miners. Having Newmont as a cornerstone shareholder could accelerate LunR's growth ambitions.
The Asset: Fruta del Norte
The silver stream is anchored by one of the world's premier gold mines. Fruta del Norte, located in southeast Ecuador, boasts Proven and Probable Mineral Reserves of 5.8 million ounces of gold at 7.09 grams per tonne—among the highest grades of any operating gold mine globally.
The silver component, while small relative to gold, is substantial in absolute terms: 8.9 million ounces in reserves at 10.77 g/t, with significant additional resources that could extend the mine's life through exploration success. Lundin Gold has committed $56 million to near-mine exploration in 2026, targeting 100,000 meters of drilling—suggesting confidence in expanding the resource base.
The mine uses an underground longhole open stoping method with a processing capacity of 5,500 tonnes per day. Its gravity-flotation-cyanidation circuit produces gold and silver in both doré and concentrate form.
Ask Fintool AI AgentWhy Now?
The timing reflects several converging factors:
Record gold prices: With gold trading above $2,800 per ounce, precious metals assets command premium valuations. Streaming deals that might have seemed expensive a year ago now look more palatable for acquirers.
Royalty sector consolidation: Franco-Nevada spent over $1.3 billion on acquisitions in 2024 alone, including streams and royalties on assets across the Americas and Africa. Smaller royalty companies need scale to compete for deals and attract institutional capital.
Capital efficiency focus: Mining companies are under pressure to return capital to shareholders without sacrificing growth. Monetizing byproduct streams—rather than diluting equity or leveraging the balance sheet—threads that needle.
What to Watch
Q2 2026 closing: The transaction requires a definitive silver purchase agreement, shareholder approval from LunR, regulatory clearances, and issuance of a prospectus qualifying the share distribution. Any delays could push closing into Q3.
LunR's acquisition pipeline: With Newmont as a cornerstone shareholder and a flagship asset on its books, LunR will likely pursue additional streaming opportunities. Watch for announcements targeting other Latin American gold and silver operations.
Silver price sensitivity: While silver represents a small percentage of Fruta del Norte's economics, any meaningful move in silver prices directly impacts LunR's returns on the stream. Silver has traded between $28 and $35 per ounce over the past year.
Exploration upside: Lundin Gold's aggressive 2026 drilling program could expand Fruta del Norte's reserves and resources, enhancing the stream's long-term value.
Ask Fintool AI AgentRelated Companies: Newmont Corporation · Franco-nevada