African Gold (ASX:A1G) has entered a partnership with Montage Gold, the company said in a Tuesday Australian bourse filing.
Under the deal, Montage Gold and its affiliates will acquire a 19.9% stake in African Gold through a share swap of 2 million Montage shares, valued at about AU$6.5 million for 92.4 million of company's shares at a deemed issue price of AU$0.07 per share and a placement to Montage and its affiliates of 12.4 million company's shares at AU$0.07 per share raising AU$866,000, before costs.
The company said it will also conduct a non-brokered private placement to add new investors independent of Montage who will acquire up to a 5% stake in the company priced at AU$0.07 per share, representing a total before costs investment of AU$1.8 million, the filing added.
The company will assign to Montage its pre-emptive rights for certain minority interests in its Didivei project in Ivory Coast, including a right to acquire the 20% project-level shareholding owned by minority shareholders, the filing said.
Montage will oversee exploration at the project, with costs covered by African Gold. A joint technical committee -comprising three company representatives and two from Montage-will determine exploration strategy and expenditures.
African Gold's shares rose 2% in recent trade.
