Montage Gold (TSXV: MAU; US-OTC: MAUTF) has secured a financing package worth US$825 million to fund the construction of its flagship Koné project in Côte d’Ivoire.
The funding is comprised of streaming agreements and loans from Wheaton Precious Metals (TSX: WPN; NYSE: WPN; LSE: WPN) and strategic shareholder Zijin Mining.
Wheaton will pay US$625 million in cash to acquire 19.5% of payable gold production from the Koné mine, up to 400,000 ounces. Wheaton will then reduce the amount of gold to be purchased to 10.8% until another 130,000 oz. has been delivered, then 5.4% for the mine’s life. The sum will be paid in four equal instalments during construction.
Additionally, the company is providing Montage a US$75-million secured debt facility for project costs.
Chinese miner Zijin is providing Montage with US$125 million in funding, comprised of a US$50-million loan facility with a nine-year tenure and a US$75-million fully redeemable subordinated gold stream.
The financing increases Montage’s available liquidity to around US$968 million, including US$143 million in cash reserves.
“With the financing milestone now achieved, we look forward to soon launching the construction of our Koné project, which is set to become West-Africa’s next sizable, long-life, low production-cost gold mine, and poised to unlock value for all stakeholders,” De Ciccio noted.
This is Montage’s third successful financing of 2024, following an upsized private placement of $180 million in August and a $35 million placement in March. The junior is part of the Lundin Group of companies.
The Koné mine is expected to produce 300,000 oz. of gold annually in the first eight years, with production starting in early 2027. The estimated mine life of Koné has been pegged at 16 years.
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