On July 16, Montage Gold Corp., a Canadian-listed company, announced a brokered private placement of up to 97,142,857 common shares at a price of CAD 1.75 per share, raising total funds of up to CAD 170 million. This includes a strategic investment of CAD 57.3 million (approximately 300 million yuan) from Zijin Mining Group Co., Ltd., giving it a 9.9% stake. The Lundin Family Trust is also increasing its holdings.
Montage Gold, headquartered in Vancouver, Canada, has its flagship Koné Gold Project located in northwest Côte d'Ivoire.
The project includes two deposits, Koné and Gbongogo, 35 km apart, situated within the Birimian Baoule-Mossi domain of the West African Craton. According to a January 2024 estimate, the Koné deposit has an ore reserve of 174 million tons with an average grade of 0.72 g/t, containing 4.01 million ounces (125 tons) of gold. At the end of 2023, resources for both deposits were estimated, with Koné at a cut-off grade of 0.20 g/t containing 4.74 million ounces (147 tons) and Gbongogo at a cut-off grade of 0.50 g/t containing 520,000 ounces (16 tons).
A feasibility study published this year identifies the Koné project as one of Africa's top-quality gold projects, with a mine life of 16 years and an all-in sustaining cost (AISC) of USD 998 per ounce. The average annual production for the first 8 years exceeds 300,000 ounces (9.3 tons).
In this fundraising round, Zijin plans to purchase 32,714,829 common shares, resulting in a 9.9% stake in Montage post-issuance. The Lundin Family Trust plans to buy 24,588,865 common shares, increasing its stake from 17.7% to 19.9%. Company insiders also intend to participate in the issuance. Net proceeds from the fundraising will be used for the development of the Koné project, exploration, working capital, and general corporate purposes. Subject to all necessary regulatory and other approvals, the fundraising is expected to complete during the week of August 12, 2024.
Martino De Ciccio, CEO of Montage Gold, stated:
"Following Zijin Mining's thorough due diligence and site visit, as well as the Lundin family's increased investment in Montage, we are pleased to welcome Zijin Mining as a major shareholder. These investments enhance our ability to achieve our strategy of becoming a top multi-asset gold producer in Africa and validate the potential of our Koné Gold Project in Côte d'Ivoire. With a strengthened balance sheet, we will be able to swiftly unlock value for our stakeholders, advance the Koné project with construction anticipated to commence in Q1 2025, and continue our exploration strategy to delineate high-grade targets that can be incorporated into the mine plan at the start of operations."
Source: montagegold.com
