Canada-based Montage Gold has initiated an equity raise of up to C$170m, which includes an investment from China’s Zijin Mining Group.
Lundin Family Trusts will also invest C$43m, increasing its shareholding in Montage Gold.
The funds raised will be earmarked for the development of Montage Gold’s Koné gold project in Côte d’Ivoire, which received a mining permit from the Council of Ministers of Côte d’Ivoire last week.
Montage Gold will also channel the capital towards exploration activities and general corporate requirements.
This offering, priced at C$1.75 per share, will see Zijin Mining Group acquire 32,714,829 common shares in Montage Gold, resulting in a 9.9% ownership post-transaction.
Lundin Family Trusts will purchase 24,588,865 shares, boosting its stake in the Canadian gold producer from 17.7% to 19.9%.
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Company insiders also plan to participate in the offering.
Stifel and SCP Resource Finance are co-leading the syndicate of agents, including Cormark Securities, Raymond James, and Beacon Securities, to facilitate the placement.
The agents will receive a 5% commission on the gross proceeds, excluding certain specified investments.
This offering’s closure is anticipated in the week of 12 August 2024, subject to regulatory approvals, including the TSX Venture Exchange’s acceptance.
Montage CEO Martino De Ciccio said: “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. 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 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.”
The latest news comes amid heightened scrutiny of Chinese critical mineral investments in Canada.
In May this year, Canada’s Solaris Resources abandoned its plan to sell a minority stake to Zijin Mining Group after failing to get Canadian regulatory approval following four months of review.
