Can you introduce the company?

Montage Gold was established in August 2019 as a spin-off from Orca Gold, a Canadian explorer/developer operating in Sudan. We acquired Orca’s assets in Ivory Coast and merged with Avant Minerals, a junior company with projects in both Ivory Coast and Burkina Faso.

What were your initial objectives regarding the Koné deposit in Ivory Coast?

During the first two years, our focus was on understanding the potential of the Koné deposit in Ivory Coast. We conducted background engineering, resource calculations, and extensive step-out drilling, reaching a vertical depth of 400 meters. As our understanding of the project improved, we decided to list on the TSXV. Our initial public offering (IPO) was well supported, raising US$35 million, which allowed us to accelerate our work. By January 2021, we increased the inferred resource from 1.5 million ounces to 4.0 million ounces. Through infill drilling, we further upgraded it to a 4.3 million ounce indicated resource for the Feasibility Study, which we published in February.

What are some unique characteristics of the Koné deposit in Ivory Coast?

The Koné deposit is, in many ways, a classic shear zone hosted gold deposit. However, it stands out due to its uncommon width for the region, exceeding 200 meters over the main part of the ore body compared to the average width of 10-50 meters in the area. While the grade is relatively low at 0.65 g/t Au, the width and the 45-degree dip of the deposit make it suitable for a large-scale, low-cost operation. The ore body is easily mineable and processable.

We opted for an 11 million tonnes processing plant, enabling us to realize economies of scale and lower the cut-off grade to 0.2-0.3 g/t, with a strip ratio of less than 1. Another advantage is the relatively soft rock hosting the mineralization, which requires less energy for grinding, reducing costs.

Moreover, the project is located in open country with minimal habitation, yet it is close to villages. This means that resettlement is not a major requirement, and local workers can commute to the site without the need for purpose-built accommodation. These factors demonstrate that grade is not the sole determinant of a project’s potential.

What is your district exploration strategy?

Once we have a large-scale, low-cost operation in place, our focus shifts to the value of smaller, higher-grade satellite deposits. For example, the Petit Yao Central target, located just 8 kilometers east of Koné, has higher grades in the range of 2 g/t. While it may not constitute a sizable deposit on its own, it has the potential to become the first satellite deposit for Koné. Adding 50,000-100,000 ounces at higher grades can have a significant positive impact on the project’s economics. Given the geological ease of finding smaller deposits, we aim to expand our exploration permits to cover up to 1,400 km2 and discover more satellite deposits. This district exploration approach has the potential to transform Koné from a solid operation into something remarkable.

What led Montage Gold to opt for an LNG-solar hybrid power plant?

The energy landscape in West Africa has undergone significant changes, with the discovery of natural gas offshore Ghana and Ivory Coast. Many mines in the region, such as Perseus’ Edikan and Orezone’s Bomboré, are transitioning to LNG. For us, choosing LNG has two main advantages. Firstly, an LNG-solar hybrid power plant is a greener and more cost-effective alternative compared to heavy fuel oil (HFO) or diesel. Secondly, unlike most miners in Ivory Coast, we are not connected to the main grid. However, LNG pipelines are being planned from Ghana into Burkina Faso and Ivory Coast, making LNG a popular energy choice in the region.

How do you perceive the investment appetite for greenfield gold projects?

As a relatively small company, securing large capital expenditure (CAPEX) can be challenging. However, there is a market appetite for gold projects. Koné is a robust project capable of withstanding significant debt, and it offers a quick payback period of under three years, supported by a production target of 300,000 ounces per year in years two and three.

Although the equity part of financing can be challenging due to low market valuations, considering the project’s scale, potential for further improvement, and the possibility of alternative financing solutions like streaming, we believe it is not insurmountable. While the equity market may have been disappointing, we are trading at a discounted value compared to the IPO price. Nonetheless, we have sufficient funds for our work programs, and we view this as an opportunity rather than a setback.

How do you envision Ivory Coast’s growth as a mining jurisdiction?

Ivory Coast is a sought-after destination and offers a favorable operating environment. The mining sector has significant potential for expansion since much of the country’s land remains underexplored. While Ivory Coast has experienced political turmoil in the past, the recent stable elections in 2020 and continued economic growth have enhanced its attractiveness. Moreover, Ivory Coast enjoys relative security compared to neighboring countries. In comparison to other West African nations, Ivory Coast’s mining sector has ample room for growth, fueled by several new gold projects reaching the feasibility and development phases.