Zijin Mining Acquires Strategic Stake in Montage Gold
Montage Gold announced on Tuesday that Zijin Mining Group, a Chinese mining firm, will acquire a 9.9% strategic stake in the company through a brokered private placement.
Zijin Mining will purchase 32.7 million shares of the Vancouver-based company at C$1.75 per share, totaling nearly C$57.3 million. The offering is expected to be completed by August 12.
This deal comes amid Canada’s efforts to tighten its Investment Canada Act, which reviews foreign investments to safeguard national security.
However, Montage believes the investment does not require Canadian government approval because Zijin will own less than 10% of Montage, gold is not classified as a critical mineral, and Montage’s assets are located outside of Canada.
In 2022, Canada ordered three Chinese companies to divest their investments in Canadian critical minerals, citing national security concerns.
Earlier this year, copper miner Solaris Resources reported that Zijin Mining planned to acquire a 15% stake but abandoned the deal, fearing it wouldn’t meet foreign investment standards.
Canada has informed the mining industry that significant deals involving the country’s critical mineral producers would only be approved under “the most exceptional circumstances.” Notably, gold is not on Canada’s critical minerals list.
As part of the current deal, the Lundin Family Trust will increase its stake in Montage from 17.7% to 19.9%.
Proceeds from the offering will fund development and exploration at Montage’s Kone project in Ivory Coast. Montage stated that the investment will assist in raising additional capital, with plans to secure further financing before the first quarter of 2025, when construction of the Kone mine is set to begin.
