- Montage Gold (TSXV:MAU) is announcing an upsized C$180 million brokered private placement with participation from the Lundin Family Trusts and China’s Zijin Mining Group
- The proceeds will go towards advancing Montage’s flagship 4-million-ounce Koné gold project in Côte d’Ivoire, with construction slated to begin in Q1 2025
- Montage is focused on becoming a premier multi-asset African gold producer
- Montage Gold stock has added 185.71 per cent year-over-year and 57.89 per cent since inception in October 2020
Montage Gold (TSXV:MAU) is announcing an upsized C$180 million brokered private placement with participation from the Lundin Family Trusts and China’s Zijin Mining Group.
Key investors
Zijin is a global mining group exploring and extracting copper, gold, zinc, lithium, silver and molybdenum. The company produced more than 1 million tons of copper, 2 million ounces of gold, 467,000 tonnes of zinc and lead, and 13.25 million ounces of silver in 2023, and sits on resources and reserves that will keep it in business for decades to come.
The Lundin Group includes individually managed public companies active in the minerals, metals, renewables and energy sectors from exploration to development and production. The group produced more than 300,000 tonnes of copper and more than 480,000 ounces of gold in 2023, in addition to approximately 50,000 barrels of oil equivalent per day. Notable Lundin companies include Lundin Mining (TSX:LUN), Lundin Gold (TSX:LUG) and International Petroleum (TSX:IPCO).
Montage’s flagship Koné gold project
Montage will allocate proceeds from the financing to working capital, general corporate purposes, as well as exploration and development expenditures at its Koné gold project in Côte d’Ivoire.
The project’s 2024 definitive feasibility study details more than 4 million ounces of probable gold reserves to be extracted over a 16-year mine life at all-in sustaining costs of only US$998 per ounce. This translates into a US$1.1 billion after-tax net present value (5 per cent) calculated at US$1,850 per ounce of gold, offering investors a healthy 25.3 per cent discount to Wednesday’s price of about US$2,479 per ounce.
Management believes Koné’s underexplored more than 2,200-square-kilometre land package, which is prospective for multiple gold deposits, could become the centerpiece of a new West African gold district.
Financing breakdown
Montage will issue up to 102,857,143 common shares priced at C$1.75 under the upsized offering.
Under the initial C$170 million offering, Zijin agreed to purchase 32,714,829 shares for C$57.3 million, resulting in a 9.9 per cent ownership interest, while Lundin Family Trusts agreed to purchase 24,588,865 shares for C$43 million, increasing its stake from 17.7 to 19.9 per cent. Montage insiders also expressed their intent to invest in the financing.
Under the upsized offering, Lundin and Zijin have agreed to subscribe for enough shares to maintain their ownership interests in Montage of 19.9 per cent and 9.9 per cent, respectively.
Stifel and SCP Resource Finance LP are serving as co-lead agents and joint bookrunners on behalf of a syndicate of agents, who will receive 5 per cent of the financing’s gross proceeds for services rendered, excluding amounts raised from Zijin, Lundin Family Trusts and Montage president’s list.
Montage expects the financing to close during the week of Aug. 12, 2024.
All shares issued are subject to a four-month hold period under applicable Canadian securities laws.
Leadership insights
“We are pleased to welcome Zijin as a major shareholder, following their in-depth due diligence and site visit, along with an increased investment in Montage by the Lundin family,” Martino De Ciccio, Montage Gold’s chief executive officer, said in a statement. “These investments strengthen our ability to deliver on our strategy to become a premier multi-asset African gold producer and validate the potential of our Koné gold project in Côte d’Ivoire.”
“With a strengthened balance sheet, we will be well-positioned to rapidly continue unlocking value for our stakeholders by progressing the Koné project towards an anticipated construction launch by Q1 2025,” De Ciccio said, “while continuing to progress our exploration strategy of delineating higher-grade targets that can be slotted into the mine plan from the commencement of the operation.”
About Montage Gold
Montage is focused on becoming a premier multi-asset African gold producer.
Montage Gold stock (TSXV:MAU) last traded at C$1.80 per share. The stock has added 185.71 per cent year-over-year and 57.89 per cent since inception in October 2020.
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(Top photo of Montage Gold’s Koné project in Côte d’Ivoire: Montage Gold)