MONTAGE GOLD SECURES US$825 MILLION FINANCING PACKAGE FOR THE CONSTRUCTION OF ITS KONÉ PROJECT IN CÔTE D'IVOIRE
Montage Gold has secured a US$825 million financing package from Wheaton Precious Metals and Zijin Mining for its Koné gold project in Côte d'Ivoire. The package includes a US$625m gold stream and US$75m loan facility from Wheaton, plus a US$75m redeemable subordinated gold stream and US$50m loan facility from Zijin. Combined with existing cash, this brings Montage's total liquidity to US$968m. The financing maintains significant exploration upside as the stream is to specific deposits, and Montage can reduce stream deliveries through production from outside areas. The company retains gold price upside through a sliding scale payment mechanism for the first 5 years.
Montage Gold ha ottenuto un pacchetto di finanziamento di 825 milioni di dollari USA da Wheaton Precious Metals e Zijin Mining per il suo progetto di oro Koné in Costa d'Avorio. Il pacchetto include uno streaming di oro da 625 milioni di dollari USA e una struttura di prestito di 75 milioni di dollari USA da Wheaton, oltre a uno streaming di oro subordinato rimborsabile di 75 milioni di dollari USA e una struttura di prestito di 50 milioni di dollari USA da Zijin. Combinato con la liquidità esistente, questo porta la liquidità totale di Montage a 968 milioni di dollari USA. Il finanziamento mantiene un significativo potenziale esplorativo poiché lo streaming è legato a specifici giacimenti, e Montage può ridurre le consegne dello streaming grazie alla produzione da aree esterne. L'azienda mantiene un potenziale rialzo del prezzo dell'oro attraverso un meccanismo di pagamento a scala mobile per i primi 5 anni.
Montage Gold ha asegurado un paquete de financiamiento de 825 millones de dólares estadounidenses de Wheaton Precious Metals y Zijin Mining para su proyecto de oro Koné en Costa de Marfil. El paquete incluye un streaming de oro de 625 millones de dólares y una línea de crédito de 75 millones de dólares de Wheaton, además de un streaming de oro subordinado reembolsable de 75 millones de dólares y una línea de crédito de 50 millones de dólares de Zijin. Combinado con el efectivo existente, esto lleva la liquidez total de Montage a 968 millones de dólares. El financiamiento mantiene un significativo potencial exploratorio, ya que el streaming está ligado a depósitos específicos, y Montage puede reducir las entregas del streaming a través de la producción de áreas externas. La compañía retiene el potencial de aumento del precio del oro a través de un mecanismo de pago de escala móvil durante los primeros 5 años.
Montage Gold는 Côte d'Ivoire의 Koné 금 프로젝트를 위해 Wheaton Precious Metals와 Zijin Mining으로부터 8억 2천5백만 달러의 자금 조달 패키지를 확보했습니다. 이 패키지는 Wheaton으로부터 6억 2천5백만 달러의 금 스트림과 7천5백만 달러의 대출 시설을 포함하며, Zijin으로부터는 7천5백만 달러의 상환 가능한 종속 금 스트림과 5천만 달러의 대출 시설을 포함합니다. 기존 현금과 결합하여 Montage의 총 유동성은 9억 6천8백만 달러에 이릅니다. 이 자금 조달은 특정 매장량에 연계된 스트림으로 인해 상당한 탐사 가능성을 유지하며, Montage는 외부 지역의 생산을 통해 스트림 납품을 줄일 수 있습니다. 이 회사는 초기 5년 동안 슬라이딩 스케일 결제 메커니즘을 통해 금 가격 상승의 혜택을 유지합니다.
Montage Gold a sécurisé un paquet de financement de 825 millions de dollars US de Wheaton Precious Metals et Zijin Mining pour son projet aurifère Koné en Côte d'Ivoire. Le paquet comprend un flux de métal précieux de 625 millions de dollars et une facilité de prêt de 75 millions de dollars de Wheaton, ainsi qu'un flux de métal précieux remboursable subordonné de 75 millions de dollars et une facilité de prêt de 50 millions de dollars de Zijin. En combinant cela avec la liquidité existante, la liquidité totale de Montage atteint 968 millions de dollars. Le financement maintient un potentiel d'exploration significatif, car le flux est lié à des dépôts spécifiques, et Montage peut réduire les livraisons de flux grâce à la production provenante de zones externes. L'entreprise conserve un potentiel d'augmentation du prix de l'or grâce à un mécanisme de paiement à échelle flexible pour les cinq premières années.
Montage Gold hat ein Finanzierungsangebot über 825 Millionen US-Dollar von Wheaton Precious Metals und Zijin Mining für sein Koné-Goldprojekt in Côte d'Ivoire gesichert. Das Paket umfasst einen Goldstream über 625 Millionen US-Dollar und eine Darlehensfazilität über 75 Millionen US-Dollar von Wheaton sowie einen rückzahlbaren nachrangigen Goldstream über 75 Millionen US-Dollar und eine Darlehensfazilität über 50 Millionen US-Dollar von Zijin. Zusammen mit den bestehenden Barmitteln erhöht sich die gesamte Liquidität von Montage auf 968 Millionen US-Dollar. Die Finanzierung bietet erhebliches Explorationspotenzial, da der Stream an spezifische Lagerstätten gekoppelt ist, und Montage kann die Lieferungen des Streams durch die Produktion aus externen Bereichen reduzieren. Das Unternehmen behält sich durch einen gleitenden Zahlungsschema für die ersten 5 Jahre Potenziale im Goldpreis vor.
- Secured substantial US$825M financing package for project construction
- Total liquidity increased to US$968M including cash on hand
- Flexible terms allowing stream delivery reduction and early repayment options
- Retains significant exploration upside with stream area
- Maintains gold price upside through sliding scale payment mechanism
- Long-term gold delivery commitments through streaming agreements
- Significant debt burden with multiple loan facilities
- Complex financing structure with multiple parties and terms
HIGHLIGHTS:
US financing package secured from strategic partners Wheaton Precious Metals and Zijin Mining to fund the build of the Koné project in Côte d'Ivoire, increasing Montage's liquidity sources to$825m US inclusive of cash on hand$968m - Wheaton Precious Metals to provide a U
S gold stream and a$625m US loan facility$75m - Montage retains significant exploration upside as the stream is limited to the Koné and Gbongogo deposits plus a 500-meter boundary and an expanded area of interest until certain dropdown thresholds are met
- Montage can reduce the stream deliveries to nil by supplementing scheduled deliveries with ounces produced from outside of the Koné and Gbongogo deposits, following the delivery of an agreed minimum number of ounces
- Montage can accelerate its deleveraging with flexibility to deliver in excess of its minimum required commitments
- Montage participates in the upside in the gold price as the production payment is based on a gold price sliding scale for the first 5 years, with a minimum transfer price of
20% at a gold price aboveUS /oz$2,100
- Strategic shareholder, Zijin Mining, demonstrates further support for the advancement of the Koné project by providing Montage with
US of funding sources comprised of:$125m US loan facility with a 9-year tenure with an annual interest rate of SOFR +$50m 4% , a 3-year drawdown availability period, and no upfront fees nor commitment feesUS fully redeemable subordinated gold stream, with the first and second buyback option dates anticipated to occur at the end of 2029 and 2030, respectively$75m
The financing package is well aligned with Montage's goal of obtaining significant financial and strategic flexibility while minimizing equity dilution. The financing package increases Montage's liquidity sources to
US gold stream provided by Wheaton (the "Wheaton Stream")$625 million US senior secured loan facility provided by Wheaton (the "Wheaton Loan Facility")$75 million US fully redeemable subordinated gold stream provided by Zijin (the "Zijin Stream" and together with the Wheaton Stream, the "Streams")$75 million US senior secured loan facility provided by Zijin (the "Zijin Loan Facility", and together with the Wheaton Loan Facility, the "Loan Facilities")$50 million
Martino De Ciccio, CEO of Montage, commented: "Today's announced
This funding package is well aligned with our goal of pursuing the optimal financing solution which maximizes key valuation per share metrics, by considering both the cost of capital and equity dilution, alongside other important considerations such as retaining exploration upside and maintaining significant strategic, financial, and operating flexibility.
Furthermore, we are extremely pleased to have concluded our financing through the formation of strategic partnerships with both Wheaton and Zijin who share our vision of creating a premier African gold producer. With the financing milestone now achieved, we look forward to soon launching the construction of our Koné project, which is set to become
Randy Smallwood, President and CEO of Wheaton Precious Metals Corp. commented: "With essential permits in place coupled with its impressive scale, we believe the Koné Project stands out as one of the premier gold assets in
FINANCING PACKAGE DETAILS
Upfront Consideration: Wheaton will pay Montage a total upfront cash consideration of
Streamed Metal Percentage: Under the agreement, Wheaton will purchase
Core Area of Interest: The Koné and Gbongogo deposits, based on a
Ore from within a 100km expanded area of interest will be subject to the stream if that ore is processed at the Koné mineral processing facility, until such time following the Second Dropdown Threshold that ounces received under the stream from the expanded area of interest is equal to the remaining ounces from the Core Area of Interest, at which point the stream percentage will be reduced to nil. If at any point after that the remaining ounces from the Core Area of Interest exceed the ounces received from the Expanded Area of Interest, Wheaton will continue receiving
Production Payments: In order for Montage to participate in the gold price upside, there will be a price adjustment mechanism in place, for the first five years after the signing of the precious metals purchase agreement, as described below, and afterwards Wheaton will make ongoing payments for the gold ounces delivered equal to
- <
,800:$1 20% of less$2,100 25% of the difference between and$2,100 , less$1,800 30% of the difference between and the spot price of gold;$1,800 ,100:$1,800 -$2 20% of , less$2,100 25% of the difference between and spot price of gold;$2,100 ,700:$2,100 -$2 20% of the spot price of gold; ,000:$2,700 -$3 20% of , plus$2,700 25% of the difference between the actual spot price of gold and ; or$2,700 - >
,000:$3 20% of , plus$2,700 25% of the difference between and$3,000 , plus$2,700 30% of the difference between the actual spot price of gold and .$3,000
Other Considerations:
- Montage is expected to comply in all material respects with the International Finance Corporation's Performance Standards on Environmental and Social Sustainability, the Global Industry Standard on Tailings Management, and WPMI's Partner/Supplier Code of Conduct, which outlines Wheaton's expectations in regard to environmental, social and governance ("ESG") matters.
- The Wheaton Stream will include a customary completion test based on expected gold production and expected mining rates.
- In the event of a change of control prior to the earlier of completion and December 31, 2026, Montage will have an option to buyback one third of the Wheaton Stream.
- Wheaton has also obtained a right of first refusal on any future precious metals streams, royalty, prepay or similar transactions on the Koné Project for a 5-year period, which will be limited to the Area of Interest thereafter.
- No obligations for Montage to enter into a hedging programme.
Upfront Consideration: Upfront cash consideration of
Area of Interest: The Koné and Gbongogo deposits, based on a
Streamed Metal Percentage: Zijin will receive
The Zijin Stream is fully redeemable under the following buy back options:
First Buy Back Option: at the later of (i) December 31, 2029, (ii) 30 months from steady state production, and (iii) delivery of an aggregate amount of 31,750 ounces of gold, Montage may pay to Zijin a cash consideration of a minimum of
- The stream percentage is reduced by
50% (from3.1% to1.55% and from1.3% to0.65% , respectively); and - The Drop Down Threshold is reduced to 42,750 ounces of gold.
Second Buy Back Option: at the later of (i) December 31, 2030, (ii) 42 months from steady state production, and (iii) delivery of an aggregate amount of 36,500 ounces of gold (or an aggregate amount of 40,700 ounces of gold if the first buy back is not exercised prior to the second buy back), Montage may pay to Zijin a cash consideration of a minimum of
Production Payments: Zijin will make ongoing payments for the gold ounces delivered equal to
The security granted to Zijin for the Zijin Stream shall be second ranking and fully subordinated to any senior facilities and certain security will terminate once the uncredited deposit under the Zijin Stream has been reduced to nil.
Wheaton will provide Montage with a secured Wheaton Loan Facility on the following terms:
- Draw sequence: Expected to be drawn last and if required
- Facility amount: US
$75 million , available following receipt of the 4th installment of the Wheaton Stream and for 3-years from closing - Use of loan: Proceeds to be allocated to project costs, including any costs overruns
- Commitment fees:
1.5% per annum standby fee applicable from receipt of the 1st installment of the Wheaton Stream - Interest rate: 3-month CME Term Secured Overnight Financing Rate ("CME Term SOFR") plus
7.75% per annum - Maturity and repayment: Bullet repayment at maturity falling 6 years from first drawdown. Montage may, without penalty and at any time, prepay the Wheaton Loan Facility in whole or in part
Zijin will provide Montage with a secured Zijin Loan Facility on the following terms:
- Facility amount: US
$50 million , available for 3-years from closing - Use of loan: Proceeds to be allocated to project costs, working capital requirements and financing fees for the development, construction and operation of the Koné project, plus general and administrative, exploration and corporate costs
- Upfront and commitment fees: none
- Interest rate: CME Term Secured Overnight Financing Rate ("CME Term SOFR") floored at
2.50% plus4.00% per annum - Maturity and repayment: Repaid through (i)
70% amortisation repayments across 24 equal quarterly instalments commencing after expiry of the availability period and (ii)30% balloon repayment at maturity falling 9 years from closing. A cash sweep of10% of the excess cashflows shall be applied, following the first repayment date, to repayment of the instalments. Montage may, without penalty and at any time, prepay the Zijin Loan Facility in whole or in part
Closing of the Loan Facilities and the Streams are subject to closing conditions as set forth in the definitive agreements and are expected to be satisfied in the coming weeks.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
ADVISORS
HCF International Advisors Ltd served as financial advisors to Montage Gold Corp. Norton Rose Fulbright is acting as legal advisor.
ABOUT MONTAGE GOLD CORP.
Montage Gold Corp. (TSXV: MAU) is a Canadian-listed company focused on becoming a premier multi-asset African gold producer, with its flagship Koné project, located in Côte d'Ivoire, at the forefront. Based on the Feasibility Study published in 2024, the Koné project has an estimated 16-year mine life and sizeable annual production of +300koz of gold over the first 8 years. Over the course of 2024, the Montage management team will be leveraging their extensive track record in developing projects in
TECHNICAL DISCLOSURE
The Koné and Gbongogo Main Mineral Resource Estimates were carried out by Mr. Jonathon Abbott of Matrix Resource Consultants of
The Mineral Reserve Estimate was carried out by Ms. Joeline McGrath of Carci Mining Consultants Ltd., who is considered to be independent of Montage Gold. Ms. McGrath is a member in good standing of the Australian Institute of Mining and Metallurgy and has sufficient experience which is relevant to the work which she is undertaking to qualify as a Qualified Person under NI 43–101.
For further details of the data verification undertaken, exploration undertaken and associated QA/QC programs, and the interpretation thereof, and the assumptions, parameters and methods used to develop the Mineral Reserve Estimate for the Koné Gold Project, please see the UFS, entitled "Koné Gold Project, Côte d'Ivoire Updated Feasibility Study National Instrument 43-101 Technical Report" and filed on SEDAR+ at www.sedarplus.ca. Readers are encouraged to read the UFS in its entirety, including all qualifications, assumptions and exclusions that relate to the details summarized in this news release. The UFS is intended to be read as a whole, and sections should not be read or relied upon out of context.
QUALIFIED PERSONS STATEMENT
The scientific and technical contents of this press release have been verified and approved by Silvia Bottero, BSc, MSc, a Qualified Person pursuant to NI 43-101. Mrs. Bottero, EVP Exploration of Montage, is a registered Professional Natural Scientist with the South African Council for Natural Scientific Professions (SACNASP), a member of the Geological Society of
FORWARD LOOKING STATEMENTS
This press release contains certain forward-looking information and forward-looking statements within the meaning of Canadian securities legislation (collectively, "Forward-looking Statements"). All statements, other than statements of historical fact, constitute Forward-looking Statements. Words such as "will", "intends", "proposed" and "expects" or similar expressions are intended to identify Forward-looking Statements. Forward-looking Statements in this press release include statements related to closing of the Loan Facilities and the Stream transactions; use of proceeds of the Loan Facilities and the Streams; timing and order of draws on each of the Loan Facilities and the Streams; redemption of the Zijin Stream; the Company's compliance with certain ESG matters; the Company's mineral reserve and resource estimates; the timing and amount of future production and the anticipated production costs from the Koné Gold Project; anticipated mining and processing methods of the Koné Gold Project; anticipated mine life of the Koné Gold Project; targeted improvements in the production profile; expected timing of commencement and completion of our stated drill programs in 2024; results of the drill programs including targeted additions to the estimated mineral resources at the Koné Gold Project, and the timing thereof; the establishment of satellite deposits and the development of these deposits; expected recoveries and grades of the Koné Gold Project; timing in respect of the commencement of construction, and the length of construction, of the mining operations at the Koné Gold Project; timing and amount of necessary financing related to the mining operations at the Koné Gold Project; and timing for permits and concessions, including that the Company will receive all approvals necessary to build the project and exploration plans for 2024.
Forward-looking Statements involve various risks and uncertainties and are based on certain factors and assumptions. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company's expectations include uncertainties inherent in the preparation of mineral reserve and resource estimates and definitive feasibility studies such as the Mineral Reserve Estimate and the UFS, and in delineating new mineral reserve and resource estimates, including but not limited to, assumptions underlying the production estimates not being realized, incorrect cost assumptions, unexpected variations in quantity of mineralized material, grade or recovery rates being lower than expected, unexpected adverse changes to geotechnical or hydrogeological considerations, or expectations in that regard not being met, unexpected failures of plant, equipment or processes, unexpected changes to availability of power or the power rates, failure to maintain permits and licenses, higher than expected interest or tax rates, adverse changes in project parameters, unanticipated delays and costs of consulting and accommodating rights of local communities, environmental risks inherent in the Côte d'Ivoire, title risks, including failure to renew concessions, unanticipated commodity price and exchange rate fluctuations, delays in or failure to receive access agreements or amended permits, and other risk factors set forth in the Company's 2023 Annual Information Form available at www.sedarplus.ca, under the heading "Risk Factors". The Company undertakes no obligation to update or revise any Forward-looking Statements, whether as a result of new information, future events or otherwise, except as may be required by law. New factors emerge from time to time, and it is not possible for Montage to predict all of them, or assess the impact of each such factor or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any Forward-looking Statement. Any Forward-looking Statements contained in this press release are expressly qualified in their entirety by this cautionary statement.
NON-GAAP MEASURES
This press release includes certain terms or performance measures commonly used in the mining industry that are not defined under International Financial Reporting Standards ("IFRS"), including AISC or "all-in sustaining costs" per payable ounce of gold sold and per tonne processed and mining, processing and operating costs reported on a unit basis. Non-GAAP measures do not have any standardized meaning prescribed under IFRS and, therefore, they may not be comparable to similar measures employed by other companies. The Company discloses "all-in sustaining costs" and other unit costs because it understands that certain investors use this information to determine the Company's ability to generate earnings and cash flows for use in investing and other activities. The Company believes that conventional measures of performance prepared in accordance with IFRS, do not fully illustrate the ability of mines to generate cash flows. The measures, as determined under IFRS, are not necessarily indicative of operating profit or cash flows from operating activities. The measures cash costs and all-in sustaining costs and unit costs are considered to be key indicators of a project's ability to generate operating earnings and cash flows. Non-GAAP financial measures should not be considered in isolation as a substitute for measures of performance prepared in accordance with IFRS and are not necessarily indicative of operating costs, operating profit or cash flows presented under IFRS. Readers should also refer to our management's discussion and analysis, available under our corporate profile at www.sedarplus.ca for a more detailed discussion of how we calculate such measures.
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SOURCE Montage Gold Corp.
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