(Adds background, details on Lundin Gold's placement, Fruta del Norte, spending commitment)
Feb 26 (Reuters) - Newcrest Mining Ltd NCM.AX said on Monday it had invested $250 million to buy a 27.1 percent stake in Canadian miner Lundin Gold Inc LUG.TO .
The total $400 million to be raised by Lundin Gold would be used to develop Lundin's Fruta del Norte gold mine in Ecuador, Newcrest said in a statement to the exchange. The mine is expected to start production by end-2019.
Newcrest said it would pay C$5.50 ($4.35) per Lundin Gold share and would be entitled to appoint two directors to Lundin's board.
Newcrest also said it signed a joint venture with Lundin to earn up to 50 percent direct interest in eight Ecuadorean exploration concessions by spending up to $20 million over five years.
It would manage the joint venture company upon its formation, Newcrest said in the statement, and has committed to spend at least $4 million over the next two years. ($1 = 1.2643 Canadian dollars)