What's Happening?
Loncor Gold, a Canadian gold explorer, has agreed to be acquired by China's Chengtun Mining Group in an all-cash transaction valued at C$261 million. The acquisition marks a significant investment by Chengtun in the
Democratic Republic of Congo (DRC). Chengtun Gold Ontario, a subsidiary of Chengtun, will acquire all outstanding shares of Loncor at C$1.38 each, representing a 33% premium to Loncor's 30-day volume weighted average price. The transaction is a milestone for Loncor's shareholders, crystallizing the value built over 15 years and mitigating risks. Loncor's flagship Imbo project in the DRC, with significant gold resources, has been central to its exploration efforts.
Why It's Important?
The acquisition of Loncor Gold by Chengtun Mining Group is significant as it represents a major investment in the DRC's mining sector, potentially boosting economic activity and development in the region. For Loncor, the deal provides a strong outcome for shareholders, eliminating future dilution and mitigating various risks. The transaction highlights the strategic interest of Chinese companies in African resources, which could influence global mining dynamics and investment patterns. The deal also supports Resolute Mining's strategic growth initiatives, reinforcing its balance sheet and advancing projects in Africa.
What's Next?
The transaction is subject to customary conditions, including shareholder approval, court approval, and regulatory clearance. Loncor shareholders will vote on the deal at a special meeting, requiring support from two-thirds of votes cast and a majority of minority shareholders. If approved, the transaction is expected to close by the first quarter of 2026, after which Loncor will be de-listed from the TSX and cease to be a reporting issuer in Canada and the US. The acquisition could lead to increased investment and development in the DRC's mining sector, with potential implications for local communities and the broader economy.
