Canada-based Montage Gold has launched an equity raise of up to C$170 million, which includes a significant investment from China’s Zijin Mining Group. Additionally, the Lundin Family Trusts will invest C$43 million, thereby increasing their shareholding in Montage Gold.

Funds to Propel Koné Gold Project Development

The capital raised will be allocated to the development of Montage Gold’s Koné gold project in Côte d’Ivoire, which recently received a mining permit from the Council of Ministers of Côte d’Ivoire. The funds will also support exploration activities and general corporate requirements.

Share Acquisition Details and Ownership Stakes

Priced at C$1.75 per share, the offering will see Zijin Mining Group acquiring 32,714,829 common shares in Montage Gold, resulting in a 9.9% ownership post-transaction. The Lundin Family Trusts will purchase 24,588,865 shares, increasing their stake from 17.7% to 19.9%. Company insiders are also expected to participate in the offering.

Syndicate of Agents and Commission Details

Stifel and SCP Resource Finance are co-leading the syndicate of agents, which includes 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.

Montage Gold

Anticipated Closure and Regulatory Approvals

The offering is expected to close during the week of 12 August 2024, subject to regulatory approvals, including acceptance from the TSX Venture Exchange.

CEO’s Statement on Strategic Investments

Montage CEO Martino De Ciccio stated: “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 bolster our ability to achieve our goal of becoming a leading multi-asset African gold producer and underscore the potential of our Koné gold project in Côte d’Ivoire. With a fortified balance sheet, we can swiftly unlock value for our stakeholders by advancing the Koné project towards an anticipated construction start in Q1 2025 and continuing our exploration strategy to identify higher-grade targets that can be integrated into the mine plan from the outset of operations.”

Context of Chinese Investments in Canadian Mining Sector

This development occurs amidst heightened scrutiny of Chinese critical mineral investments in Canada. Earlier this year, Solaris Resources in Canada abandoned its plan to sell a minority stake to Zijin Mining Group after failing to secure Canadian regulatory approval following a four-month review.

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