Chinese mining company Zijin Mining has agreed to acquire a 9.9% ownership interest in Canada-based mineral explorer Montage Gold through an investment of C$57.3m ($41.9m).
The investment is part of Montage Gold’s equity raise of up to C$170m ($124.3m), aimed at advancing its Koné gold project in Côte d’Ivoire.
It will see a private placement of up to 97.14 million common shares of Montage Gold at a price of C$1.75 ($1.28) per share.
According to the terms of the offering, Zijin Mining will purchase nearly 32.7 million common shares of Montage Gold.
Besides, trusts controlled by the Lundin family have agreed to purchase about 24.5 million common shares of the Canadian company. This will enable Lundin Trusts to increase their ownership stake in Montage Gold to 19.9% from 17.7%.
Subject to certain conditions including, receipt of all required regulatory and other approvals such as acceptance of the TSX Venture Exchange, the offering is anticipated to close during the week of 12 August 2024.
Montage Gold aims to utilise the net proceeds from the offering for the development expenditures at the Koné project, exploration, as well as for working capital and general corporate purposes.
Located 350km northwest of Yamoussoukro, the Koné gold project entails an initial project capital cost of $712.1m, including a contingency allowance of $65.3m.
According to the updated feasibility study released earlier this year, the gold project has an after-tax net present value (NPV) of $1.1bn. It also estimates a post-tax internal rate of return (IRR) of 31% with a payback period of 2.6 years.
Earlier this month, Montage Gold secured the mining permit from Côte d’Ivoire’s council of ministers for the Koné project.
