Montage Gold (TSXV: MAU; OTC: MAUTF) has entered into an agreement with Barrick Gold (TSX: ABX; NYSE: ABX) and Endeavour Mining (TSX: EDV; LSE: EDV) to acquire a 100% interest in the Mankono-Siss?(C)dougou joint venture project in C??te d'Ivoire.
The JV project consists of three properties - Siss?(C)dougou, Gbongogo and Siss?(C)pl?(C) - that lie within the perimeter of the company's Kon?(C) gold project (KGP). Taken together with Montage's existing land holdings, they would form a contiguous block of 1,295 sq. km. in exploration permits, and a further 964 sq. km. in exploration permit applications, for a total of 2,259 sq. kilometres.
"This is an important step for Montage, with the addition of Mankono, our consolidated land position at the Kon?(C) gold project will increase to over 2,250 sq. km in one of the most prolific gold belts in West Africa," Montage CEO Hugh Stuart commented.
As consideration, Montage will pay the JV partners $30 million, consisting of $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 9.9% and 4.3% 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 70 ? each to raise gross proceeds of $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 been explored by Randgold (Barrick) since 2013. The Siss?(C)dougou and Siss?(C)pl?(C) (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 US$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 Kon?(C) 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 feasibility study on project released earlier this year outlined a 15-year operation producing 3.1 million oz. of gold with average annual production of 207,000 oz. and peak production of 320,000 ounces.