Montage raising $180 million with Lundin family, Zijin support
Montage Gold Corp. [MAU-TSXV, MAUTF-OTCQX] said Wednesday it is raising $180 million from an upsized private placement financing with proceeds earmarked for the company’s flagship Kone gold project in northwest Cote d’Ivoire. That’s up from the previous $170 million target.
The financing includes a strategic investment of $57.3 million by Zijin Mining Group Co Ltd., allowing the Chinese mining company to obtain a 9.9% stake in Montage as part of the equity raise. Trusts controlled by the Lundin family have pledged to invest $43 million, increasing their interest to 19.9% from 17.7%.
Zijin had previously owned 782,000 Montage shares, representing an 0.3% interest.
The company said the private placement previously announced on July 16, 2024, has been increased to 102.8 million common shares priced at $1.75 per share.
The offering is expected to close during the week of August 12, 2024.
Montage Gold shares advanced on the news, rising 1.11% or $0.02 to $1.82. The shares are currently trading in a 52-week range of $1.87 and 51 cents.
Montage is a Canadian precious metal exploration and development company with a focus on the Cote d’Ivoire. Kone is the company’s flagship property and is located in northwest Cote d’Ivoire. The project is estimated to host a probable reserve of 174.3 million tonnes of grade 0.72 g/t or 4.01 million ounces.
Back in January 16, 2024, the company released the results of an updated feasibility study at Kone, outlining a 16-year gold project, producing 3.57 million ounces of gold at an all-in-sustaining cost of US$998 per ounce over the life of the mine. Average production is forecast at over 300,000 ounces over the first eight years, reaching a peak of 378,000 ounces.
Montage recently expanded its leadership team. Martino De Ciccio was named CEO. Peder Olsen was appointed as Chief Development Officer. Ron Hochstein joined the company’s board of directors.
Both Martino and Peder have more than 15 years of experience in the mining industry with a strong value creation track record and a profound understanding of the African mining landscape. Both played key roles in building Endeavour Mining Corp. (EDV-TSX-LSE, EDVMF-OTCQX,) into a top 10 global gold producer and the largest in West Africa.
Montage is aiming to become a premier multi-asset African gold producer with the flagship Kone asset at the forefront. Based on the feasibility study published in 2024, Kone ranks as one of the highest quality gold projects in Africa.
“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,’’ said De Ciccio. “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 Kone Gold project in Cote d’Ivoire.’’