Canadian miner Montage Gold on Tuesday said Chinese mining firm Zijin Mining Group would take a 9.9% strategic stake in the company through its brokered private placement.
Zijin Mining would purchase 32.7 million shares out of nearly 97.1 million common shares of the Vancouver, Canada-based company at C$1.75 per share, coming to nearly C$57.3 million ($41.90 million) upon completion of the offering by Aug. 12.
This comes as Canada seeks to tighten its Investment Canada Act, under which deals involving a foreign company are reviewed to safeguard national security.
In 2022, three Chinese companies were ordered to divest their investments in Canadian critical minerals, citing national security.
Earlier this year, Solaris Resources reported Zijin Mining was planning to acquire a 15% stake in the Canadian miner, but scrapped the plans as it feared the deal was unlikely to meet the foreign investment standards.
Canada has also told the mining industry that any major deals targeting the country’s producers of critical minerals would only be approved under “the most exceptional circumstances”.
However, gold doesn’t feature in the country’s critical minerals list.
As part of the deal, the Lundin Family Trust also agreed increase its stake in the company from 17.7% to 19.9%.
Proceeds from the offering would be used for development expenditures and exploration at the Montage’s Kone project in Cote d’Ivoire.
($1 = 1.3676 Canadian dollars)
(By Seher Dareen; Editing by Vijay Kishore)
