African Gold Limited has entered into a binding agreement for acquisition by Montage Gold Corp. in an all-scrip deal valuing African Gold at a significant premium. The transaction aims to combine key Côte d’Ivoire gold assets under one larger entity.
- Montage to acquire African Gold via all-scrip scheme of arrangement
- African Gold shareholders to receive 0.0628 Montage shares per share
- Offer implies ~54-59% premium over recent African Gold share prices
- Independent African Gold Directors unanimously recommend the scheme
- Transaction subject to shareholder, optionholder, court, and regulatory approvals
Deal Overview
African Gold Limited (ASX, A1G) and Montage Gold Corp. (TSX, MAU) have formalised a Scheme Implementation Deed under which Montage will acquire 100% of African Gold’s shares it does not already own. The acquisition is structured as an all-scrip transaction, with African Gold shareholders receiving 0.0628 Montage shares for each African Gold share held. This exchange ratio translates to an implied value of approximately $0.50 per African Gold share, representing a substantial premium of around 54% to 59% over recent trading prices.
The deal also addresses African Gold optionholders, who will receive Montage options on a like-for-like basis or have their options exercised or cancelled prior to implementation. The combined transaction is designed to consolidate two significant gold projects in Côte d’Ivoire, African Gold’s Didievi Gold Project and Montage’s Koné Gold Project.
Strategic Rationale and Board Support
African Gold’s CEO, Adam Oehlman, highlighted the transaction as a validation of the Didievi project’s scale and quality, emphasizing the benefits of joining a larger, well-capitalised gold producer focused on Côte d’Ivoire. The merger is expected to bring enhanced development expertise, balance sheet strength, and de-risking of the Didievi project’s pathway to production.
Montage’s CEO, Martino De Ciccio, underscored the accretive nature of the deal, noting that recent drilling and metallurgical testwork have increased confidence in Didievi’s standalone potential. The acquisition aligns with Montage’s strategy to build a premier African gold producer with a robust development pipeline.
The Independent African Gold Directors, who collectively hold a meaningful stake in the company, unanimously recommend the scheme, contingent on no superior proposal emerging and a positive conclusion from an Independent Expert. Montage is already the largest shareholder in African Gold, holding 17.3% of shares, which further aligns interests.
Conditions and Timetable
The transaction is subject to several key conditions precedent, including approval by at least 75% of votes cast by African Gold shareholders and optionholders, court approval, and receipt of all necessary regulatory clearances. The parties have agreed to exclusivity provisions to prevent competing bids during the negotiation period.
Shareholder and optionholder meetings are scheduled for early April 2026, with court hearings and final approvals expected shortly thereafter. Implementation of the scheme is targeted for late April 2026, pending all conditions being met.
Financial and Legal Safeguards
Both parties have agreed to break fees to compensate for costs if the deal does not proceed under certain circumstances, reflecting the seriousness and commitment to the transaction. Detailed warranties and indemnities have been exchanged to protect both sides, covering representations about assets, liabilities, and compliance with laws.
The transaction also contemplates tax considerations, including potential capital gains rollover relief for shareholders, and mechanisms to handle foreign shareholders who may be ineligible to receive Montage shares directly.
Looking Ahead
If successful, this acquisition will create a more substantial gold producer with a diversified asset base in a geopolitically stable and resource-rich region. The combined entity will benefit from increased scale, operational synergies, and enhanced financial flexibility to advance development projects.
Bottom Line?
As African Gold shareholders prepare to vote, the market will watch closely for any competing bids or shifts in director recommendations that could reshape Côte d’Ivoire’s gold mining landscape.
Questions in the middle?
- Will any superior competing proposals emerge before the scheme meetings?
- How will the Independent Expert assess the transaction’s benefits for optionholders?
- What are the potential regulatory hurdles, particularly regarding foreign investment approvals?