China's Zijin Mining is to buy a 9.9% stake in African gold developer Montage Gold for C$57.3 million as part of a $170 million raise priced at $1.75 per share. The Lundin family, a major shareholder in Montage, will also increase its ownership from 17.7% to 19.9% by investing another $43 million into the company.

Zijin has made several investments in gold projects in recent years, including buying Guyana Goldfields and its Aurora mine in Guyana, Continental Gold and its Buritica mine in Colombia and IAMGOLD's Rosebel mine in Suriname.

"We are pleased to welcome Zijin as a major shareholder, following their in-depth due diligence and site visit, along with an increased investment in Montage by the Lundin family. These investments strengthen our ability to deliver on our strategy to become a premier multi-asset African gold producer and validate the potential of our Koné gold project in Côte d'Ivoire," said Montage Gold CEO Martino De Ciccio.

Montage aims to begin construction of Koné during the March quarter of 2025. Funds will also help it progress its exploration strategy of delineating higher-grade targets that can be included in the mine plan.

Montage Gold published an updated feasibility study for Koné in February using a US$1850/oz gold price, incorporating the Gbongogo Main satellite deposit.

Following a $712 million initial capital investment, the project will produce 223,000 ozpa for 16 years at an all-in-sustaining cost of $998/oz, with a peak production of 378,000oz in year three. The project will yield an after-tax net present value (NPV) of $1.1 billion at a 5% discount rate and an internal rate of return (IRR) of 31%, with a 1.5-year payback.

Shares in Montage Gold are trading at C$1.77, giving it a valuation of C$423 million.