Montage Gold raises $170M from Zijin, Lundin for Koné in Africa

China’s Zijin Mining Group and the Lundin family are part of a $170 million capital raising to increase their stakes in Montage Gold (TSXV: MAU; US-OTC: MAUTF) and advance its fully permitted Koné gold project in Côte d'Ivoire to construction early next year.

Zijin is investing $57.3 million for a 9.9% stake while the Lundin trust is increasing its holding to 19.9% from 17.7% with a $43 million purchase of shares, Vancouver-based Montage said on Tuesday. They are priced at $1.75 apiece, a 1.1% discount to Monday’s close in an offering expected to end around Aug. 12. Management and other insiders are investing about $20 million, the company said.

“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,” Montage CEO Martino De Ciccio said in a release.

“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 first quarter 2025.”

The West African country granted the final mining permit last week for Koné, which is about 600 km north of the capital, Abidjan. Montage has said it’s aiming the US$712-million capital cost project to be among the largest and least expensive mines in the region. It’s slated to produce 300,000 oz. of gold annually over the first half of a 16-year mine life with all-in sustaining costs of US$998 per oz., according to an updated feasibility study released in January.

Foreign investment