A new privately-held mineral exploration company focused on West Africa has been created through the asset combination of Avant Minerals and Orca Gold.
The new company, Montage Gold Corp., will hold one of the best-placed land packages in Côte d’Ivoire as well as a significant land position in Burkina Faso. CEO HUGH STUART spoke to CHANTELLE KOTZE about the rationale behind the creation of the new company.
The creation of Montage Gold Corp, will initially be owned 60% by Orca and 40% by Avant, provides Orca shareholders with opportunities to benefit from the strategic portfolio of permits and applications assembled by Orca, the portfolio and strong backing of Avant.
With its primary project, the Block 14 gold project in Sudan, Orca entered West Africa as a way of diversifying its asset base in light of the political instability currently plaguing the North African country.
Despite Block 14 being a solid project with a successful feasibility study in the bag, the company’s share price is being largely controlled by the political instability in the country, which made the deal in Côte d’Ivoire a sensible one, Stuart explains.
Holding the Côte d’Ivoire and Burkina Faso assets in a new vehicle allows for them to be valued independently as a means to create value for shareholders and also to enable these projects to be funded separately to that of Orca’s Block 14 project.
Backed by the right people
One of the key success factors for junior mining companies looking to develop projects is being able to raise money.
Part of the creation of Montage has not only been to bring new assets into the portfolio but to bring in additional cash to the business, Stuart explains, adding that the company is undertaking a private placement financing of C$7 million by third-party investors as part of the asset merger.
In addition to Orca’s solid shareholder base, which comprises Resolute Mining as a major shareholder, Avant also brings with it a strong and supportive shareholder base, including Canadian gold royalty and streaming company Sandstorm Gold Royalties.
“When creating a new junior exploration company in a difficult market, having a strong shareholder base across the two companies was a critical aspect in Montage Gold Corp.’s creation and gives us a strong base on which to raise money, not only now but into the future,” says Stuart.
In addition to Montage’s strong financial backing, the company has a management team to match, which includes Adam Spencer as president, and Glenn Kondo as CFO, while the board will be comprised of four Orca representatives and two Avant representatives, with the chairman being an Orca appointee.
As a well-financed junior, Montage can now explore more aggressively and effectively in West Africa, with a strong focus on Côte d’Ivoire.
Montage asset portfolio
Upon closing of the combination and financing the assets, the Montage project portfolio will include:
- Four permits and nine permit applications in Côte d’Ivoire totalling 4 243 km2;
- Nine permits and two permit applications under earn-in in Burkina Faso totalling 1 128 km2; and
- A cash balance of at least C$11 million ($4million from Avant and $7 million from the private placement)
In Côte d’Ivoire, Montage controls the Morondo licence, which currently hosts a 1.2 Moz inferred resource and is strategically centered between Roxgold’s Seguela project 80 km to the south and Barrick/Endeavour Mining’s Mankono joint venture, which lies adjacent in the north.
In Burkina Faso, the company will hold a dominant land position on the Sirba Greenstone Belt between the Golden Rim Resources’ Kouri project and the Samira Hill/Libiri deposit previously mined by Semafo. Avant currently owns 51% in this collection of properties and is increasing its earn-in to 70% from ASX-listed Predictive Discovery.
For the foreseeable future, the company will focus its efforts in Côte d’Ivoire, while the Bira and Bonsiega projects in Burkina Faso, which lie on the Sirba Greenstone Belt on the border of Niger, will provide the company with longer term upside once the security situation in Burkina Faso, which is currently suffering mounting insurgent attacks and social unrest, is under control.
For the remainder of 2019, Montage’s exploration programme will focus on advancing and building the resource at the Koné prospect in the Morondo permit where the resource shows potential for expansion. Morondo, which was first pegged about 10 years ago by Red Back Mining, has only undergone 18 000 m of drilling to date with little to no drilling undertaken outside of the resource.
The exploration at Morondo will therefore include resource extension drilling and air core drilling to assess resource extensions as well as further metallurgical test work.
“This permit, which has not received a great deal of exploration, with its distinct mineralisation has a true width of over 150 m and is about 600 m in length, making it ideal for open cast mining,” says Stuart.
“The district in Côte d’Ivoire that hosts the Morondo permit is becoming quite prospective, not only for us but for our surrounding neighbours as well and we believe that as more exploration is undertaken at Morondo that more discoveries will be made,” says Stuart.
Montage will also undertake infill sampling on the Badenou soil anomaly in the Korokaha North permit and Korokaha South application which lie adjacent to Barrick’s Tongon mining lease. The permit and the application, both pegged in 2008, have not been subject to much exploration. Wide spaced reconnaissance soil sampling undertaken in late 2018 identified soil anomalism, which the company will follow up on.
The other main part of the portfolio is the Bobosso project, which comprises two permits and one application totalling about 1 200 km2 within the southern extension of the prolific Houndé Greenstone Belt, where Avant have identified a number of drill targets within areas of strong soil anomalism.
“Having undergone a reasonable amount of exploration in the past, we will spend the next few months assimilating the historic data and firm up a work plan to execute early in the new year,” says Stuart.
While Montage is currently privately owned by its shareholders, the company would like to become publicly-listed within the next 12 to 18 months. Before doing so, the goal is to have at least a +2 Moz resource with a few additional discoveries within the portfolio, Stuart concludes.