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TICKERS: MAU

Gold Co. Raises $180M, Receives Final Permits
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Exploration at this project in Cote d'Ivoire continues and a construction decision is expected in H2/24, noted a Beacon Securities report.

Montage Gold Corp. (MAU:TSX.V) is "cashed up, permitted, and ready to roll" at its Koné gold project in Côte d'Ivoire, reported Beacon Securities analyst Bereket Berhe in an Aug. 15 research note. Beacon raised its target price on the Canadian precious metals explorer-developer to CA$2.75 per share from CA$2.50.

Currently, Montage was trading at the time of the report at about CA$1.90 per share, noted Berhe. Return to the new target from there is 45%. The company remains a Buy.

"We believe this still represents a good entry point," wrote the analyst.

CA$180 Million Raised

Montage raised CA$180 million (CA$180M) in a now-closed private placement, by issuing about 103 million shares at CA$1.75 apiece, wrote Berhe.

Notably, the The Lundin Group increased its interest in Montage to 19.9% from 17.7%. Zijin Mining Group Co. Ltd. also invested and now owns a 9.9% stake.

Last Approvals Received

Berhe reported that Montage received mining permits in July for the Koné and Gbongogo deposits at its Koné project, valid for 20 and eight years, respectively. Plus, the permits may be extended if years are added to the project's life of mine (LOM). The permits are the last approvals the company needs before it may start construction, noted the analyst.

"With all permits in hand now, we will be keeping an eye on project financing, especially on the debt/streaming/equity proportions," wrote Berhe. "We believe Montage will likely prefer heavier weighting toward debt to minimize share dilution."

Update on Exploration Work

The work Montage has carried out so far at the Koné project highlights its "focus and potential to unlock value through exploration," Berhe wrote. "Overall, the results provide confidence and confirm the prospectivity of the Koné area."

Montage has nearly completed the US$6M, 30,000 meters (30,000m) program of mixed diamond, reverse circulation, air core, and auger drilling in progress at the Koné project, the plan for which is to drill test 15 targets out of the 35 identified in seven mineralized trends. The aim is to delineate more higher-grade deposits to increase potential production at the project to more than 300,000 ounces per year (300 Koz/year), particularly early in the LOM, and to stabilize the grade later in the LOM.

One target, Diouma North, noted Berhe, has potential given its strong mineralization, cohesive nature, and nearness to the haul road. A standout intercept from diamond drilling this deposit is 14.1m of 8.04 grams per tonne gold 8.04 g/t Au), including 17.45m of 2.74 g/t Au and 22.45m of 1.52 g/t Au.

"Even a small but higher-grade deposit here would likely result in disproportionate positive impact on the project net present value," commented Berhe.

Plans call for a second drill campaign to test more top-priority targets over 60,000m.

Further, Berhe reported, Montage management noted it is "making exceptional progress towards advanced detailed engineering" and wants to finish it before starting construction to further derisk the development phase.

The 2024 definitive feasibility study of the Koné project outlines an 11,000,000 tons per annum operation producing a total of 3,500,000 ounces of gold, or 223 Koz/year on average. Initial capex is estimated at US$712M.

Using a US$1,850 per ounce gold price, the project should return "very strong project economics," reported Berhe. They include an after-tax NPV discounted at 5% of US$1.09 billion and an internal rate of return of 31%.

What To Watch For

Upcoming catalysts include additional drill results on an ongoing basis throughout the rest of 2024, project financing, and, in H2/24, a construction decision, Berhe indicated.

Also, Montage could transact some type of mergers and acquisitions activity at any time, which could boost its stock price.

Changes to the Model

The model on Montage was updated, Berhe wrote, to reflect its new share count and the investment bank's revised gold price deck. Its new and previous gold price estimates are:

  • For 2024, US$2,250/oz, up from US$2,150/oz
  • For 2025, US$2,100/oz, up from US$2,000/oz
  • For 2026, US$2,000/oz, up from US$1,900/oz
  • For 2027, US$1,900/oz, up from US$1,700/oz
  • For 2028, US$1,800/oz, up from US$1,700/oz


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Important Disclosures:

  1. Doresa Banning wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor.
  2.  This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company. 

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Disclosures for Beacon, Montage Gold Corp., August 15, 2024

Disclosure Requirements Does Beacon, or its affiliates or analysts collectively, beneficially own 1% or more of any class of the issuer's equity securities? ☐ Yes ☒ No

Does the analyst who prepared this research report have a position, either long or short, in any of the issuer’s securities? ☐ Yes ☒ No

Has any director, partner, or officer of Beacon Securities, or the analyst involved in the preparation of the research report, received remuneration for any services provided to the securities issuer during the preceding 12 months? ☐ Yes ☒ No

Has Beacon Securities performed investment banking services in the past 12 months and received compensation for investment banking services for this issuer in the past 12 months? ☒ Yes ☐ No

Was the analyst who prepared this research report compensated from revenues generated solely by the Beacon Securities Investment Banking Department? ☐ Yes ☒ No

Does any director, officer, or employee of Beacon Securities serve as a director, officer, or in any advisory capacity to the issuer? ☐ Yes ☒ No

Are there any material conflicts of interest with Beacon Securities or the analyst who prepared the report and the issuer? ☐ Yes ☒ No

Is Beacon Securities a market maker in the equity of the issuer? ☐ Yes ☒ No

Has the analyst visited the issuer's material operation(s)? ☐ Yes ☒ No

Did the issuer pay for or reimburse the analyst for the travel expenses? ☐ Yes ☒ No

All information contained herein has been collected and compiled by Beacon Securities Limited, an independently owned and operated member of the Canadian Investment Regulatory Organization (CIRO). All facts and statistical data have been obtained or ascertained from sources, which we believe to be reliable, but are not warranted as accurate or complete. All projections and estimates are the expressed opinion of Beacon Securities Limited, and are subject to change without notice. Beacon Securities Limited takes no responsibility for any errors or omissions contained herein, and accepts no legal responsibility from any losses resulting from investment decisions based on the content of this report. This report is provided for informational purposes only and does not constitute an offer or solicitation to buy or sell securities discussed herein. Based on their volatility, income structure, or eligibility for sale, the securities mentioned herein may not be suitable or available for all investors in all countries. 

Dissemination Beacon Securities distributes its research products simultaneously, via email, to its authorized client base. All research is then available on www.beaconsecurities.ca via login and password.

Analyst Certification The Beacon Securities Analyst named on the report hereby certifies that the recommendations and/or opinions expressed herein accurately reflect such research analyst’s personal views about the company and securities that are the subject of the report; or any other companies mentioned in the report that are also covered by the named analyst. In addition, no part of the research analyst’s compensation is, or will be, directly or indirectly, related to the specific recommendations or views expressed by such research analyst in this report.





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