Montage Gold to acquire African Gold in $170m deal
TSX-listed Montage Gold on Friday announced a binding scheme implementation deed to acquire all shares in ASX-listed African Gold that it did not already own, in a transaction that strengthened the company’s project pipeline in Côte d’Ivoire with the addition of the advanced-stage Didievi gold project to its portfolio.
Montage, which already holds a 17.3% stake in African Gold and operates the Didievi project, will acquire the remaining shares through an Australian court-approved scheme of arrangement. The deal implies a fully diluted equity value of about $170-million for the African Gold shares being purchased.
Under the agreement, African Gold shareholders will receive 0.0628 of a Montage common share for each African Gold share held, which is equivalent to an implied offer price of A$0.50 a share. The offer represents a 54% premium to African Gold’s 10-day volume-weighted average price on the ASX to November 27.
The Didievi project hosts an inferred resource of 12.4-million tonnes at 2.5 g/t gold for 989 000 oz, nearly doubling from 452 000 oz following recent drilling and metallurgical testwork undertaken during Montage’s operatorship. Montage said the project has clear potential to evolve into a standalone gold operation.
“With the build of our Koné project tracking on budget and well on schedule, we are pleased to further enhance our portfolio through the addition of the high-quality Didievi project, thereby strengthening our presence in Côte d’Ivoire," said Montage CEO Martino De Ciccio.
"As operator of the Didievi project, we have been able to derisk this transaction by conducting further drilling which has resulted in an increase in the Blaffo Guetto deposit resource while confirming mineralisation at new targets, in parallel to conducting metallurgical testwork. 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."
African Gold CEO Adam Oehlman added that, through the partnership with Montage announced earlier this year, the company had the opportunity to work closely with the Montage team and that it had strong confidence in their ability to unlock value at the Didievi project. "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."
