Montage Gold Corp. has agreed to acquire all the issued share capital of Australia’s African Gold that it does not already own, a deal that is set to expand the company’s presence in Côte d’Ivoire.
Under an Australian-approved scheme of arrangement, Montage, which already owns a 17.3 per cent stake in African Gold, will acquire the remaining shares for 0.0628 of its own common shares. This share exchange ratio represents an implied offer price of 50 Australian cents per African Gold share and an implied transaction value of US$170 million.
Following the completion of the deal, African Gold shareholders will own approximately 7.1 per cent of the issued shares of Montage Gold and 7.8 per cent on a fully diluted in-the-money basis.
Montage Gold said the acquisition will strengthen its presence in Côte d’Ivoire and builds a project pipeline with the addition of African Gold’s Didievi project, which already hosts an inferred resource of 12.4 million tonnes at 2.5 grams of gold per tonne (g/t Au) containing 989,000 ounces of gold.
Montage Gold became the operator of the Didievi project following its strategic partnership with African Gold. Since making the initial investment in African Gold, the Didievi project has been further advanced with a 40,000-metre drilling programme underway and metallurgical tests performed.
Martino De Ciccio, CEO of Montage Gold, said the acquisition is accretive to its Koné project and will advance the company’s strategy of creating a premier African gold producer.
“We have seen the potential for the Didievi project to become a high-quality standalone operation and we look forward to leveraging our highly experienced team to rapidly unlock its full potential.”
Adam Oehlman, CEO of African Gold, said: “This transaction positions our shareholders to benefit from Montage’s exploration and construction expertise while gaining exposure to the near-term production of the Koné project.”
