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African Gold (ASX:A1G) has jumped +65% on Tuesday as news that it’s being acquired by TSX-listed Montage Gold at a ~50% premium was received with enthusiasm, news which was apparently delayed by yesterday’s ASX announcements outage – the release only hit the market at 3.41PM AEDT yesterday.
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Montage already owned a considerable stake on African Gold and, for its part, is also focused on West African gold projects, particularly in Côte d’Ivoire, which is why Montage has targeted African Gold – whose namesake belies the obvious.
Under the deal, A1G shareholders will receive Montage shares; options are also cared for and perhaps because of that, all directors have thrown support behind the deal. The news has also pushed up Montage’s share price on the TSX.
“This transaction represents a compelling outcome for African Gold shareholders at this stage of the Company’s evolution,” A1G CEO Adam Oehlman said.
“It validates the scale, quality and strategic positioning of the Didievi Gold Project and provides our shareholders with continued exposure to the upside through ownership in a larger, well-capitalised Côte d’Ivoire-focused gold company.”
Montage Gold CEO Martino De Ciccio further outlined the financial logistics behind the deal. “As operator of the Didievi project since our initial investment, we have been able to derisk this transaction by conducting further drilling, which has resulted in an increase in the Blaffo Guetto deposit resource.”
A1G last traded at 52cps.
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