Montage Gold raises $35 million for Koné project in Africa

What began as an effort to raise $20 million by Montage Gold (TSXV: MAU; OTCQX: MAUTF) had by closing on March 12 ballooned to $35.2 million. The company sold 50.3 million shares at a price of $0.70 per share.

Net proceeds of the private placement will be used to advance the 100%-owned Koné gold project which is nearing a construction decision in Côte d’Ivoire. A portion of the proceeds will be used to explore nearby targets and for working capital and general corporate purposes.

"We are very pleased with the strong investor demand received for our upsized non-brokered private placement, led by a significant investment from the Lundin family along with notable investments from directors and officers of Montage,” said Montage CEO Martino De Ciccio. “We look forward to progressing our strategy of building a premier multi-asset African gold producer, with our Koné project at the forefront."

The nearest major centre to the  Koné project is Séguéla 80 km to the south. A feasibility study was released earlier this year that outlines a mine with a 16-year life producing 378,000 oz. annually during the first three years. The all-in sustaining cost during those years will be US$899/oz., rising to US$998/oz. over the life of the mine. The project has an after-tax net present value at a 5% discount of $1.09 billion and a 31% internal rate of return using a gold price of US$1,850 per ounce.

Pre-production capital costs will be $712.1 million, with after-tax payback achieved in 2.6 years.

The project has total probable reserves of 11.3 million oxide tonnes grading 0.63 g/t gold, 7.9 million transition tonnes at 0.63 g/t gold, and 155.1 million fresh tonnes at 0.73 g/t gold.

Including the probable reserves, the Koné deposit has an indicated resource, using a cut-off of 0.20 g/t gold, of 229 million tonnes grading 0.59 g/t gold and containing 4.4 million ounces. The indicated resource for the Gbongogo Main deposit, using a cut-off of 0.5 g/t gold, is 11 million tonnes grading 1.5 g/t and containing 520,000 ounces. Together, the indicated resource contains almost 4.9 million oz. of gold.

There is also an inferred resource for Koné of 25 million tonnes grading 0.5 g/t and containing 400,000 oz. of gold.

Ore will be mined from three pits for the Koné and Gbongogo Main deposits. The processing plant will have an annual throughput of 11 million tonnes and feature two parallel high-pressure grinding rolls followed by ball mills. The slurry will be thickened and pass through a carbon-in-pulp circuit, followed by elution, electrowinning and gold smelting.

Additional information about the Koné gold project are available on www.MontageGoldCorp.com.