Montage Gold is set to purchase a 100% interest in the Mankono-Sissédougou joint venture project in Côte d’Ivoire.
The firm entered cash-stock deal, worth $23.9m (C$30m), to buy the project from Barrick Gold and Endeavour Mining. This acquisition is expected to expand the Canadian precious metals explorer and developer’s Koné gold project in the West African country.
The JV project consists of three properties – Sissédougou, Gbongogo and Sisséplé – that lie within the perimeter of the company’s Koné gold project (KGP). Taken together with Montage’s existing land holdings, they would form a contiguous block of 1,295 km2 in exploration permits, and a further 964 km2 in exploration permit applications, for a total of 2,259 km2.
“This is an important step for Montage, with the addition of Mankono, our consolidated land position at the Koné gold project will increase to over 2,250 km2 in one of the most prolific gold belts in West Africa,” Montage CEO Hugh Stuart said.
As consideration, Montage will pay the JV partners C$30 million, consisting of C$14.5 million cash and approximately 22.1 million of its shares (about a fifth of those outstanding), plus a a 2% net smelter return royalty. The payment will be allocated 70% to Barrick and 30% to Endeavour, based on their relative ownership interest in the project. Post-closing, Barrick and Endeavour will each own 9.93% and 4.26% of Montage, respectively.
To finance the cash portion of the consideration, Montage has arranged a bought deal private placement of 28.6 million subscription receipts priced at C$0.70 each to raise gross proceeds of C$20 million, which would bring the total number of shares issued related to the transaction to 50.7 million and its total share count to 156 million.
Closing of the project acquisition is subject to the award of the Gbongogo exploration permit, covering an area that had been explored by Randgold (Barrick) since 2013. The Sissédougou and Sisséplé (also in permit application) areas have been explored by Endeavour and previously La Mancha Resources since 2010.
The Mankono joint venture was as formed in 2017, and exploration has been managed by Barrick since that time. Historic exploration spending on the combined land package by all parties is approximately $20 million.
“Previous exploration at Mankono has identified a number of target areas, and Montage intends to explore these targets aggressively with the objective of adding high-grade satellite feed into the KGP,” Stuart added.
The company’s flagship Koné project currently hosts a probable mineral reserve of 161.1 million tonnes grading 0.66 g/t for 3.42 million oz. of gold. A definitive feasibility study (DFS) on project released earlier this year outlined a 15-year operation producing 3.06 million oz. of gold with average annual production of 207,000 oz. and peak production of 320,000 oz.