Loncor Gold and Chengtun Mining Group, through its fully owned subsidiary Chengtun Gold Ontario, have entered into an arrangement agreement under which Chengtun Mining will acquire all the outstanding common shares of Loncor.
Chengtun Gold Ontario will buy all the outstanding shares of Loncor for C$1.38 per share.
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The consideration reflects a total equity value of around C$261m on a fully diluted basis.
This acquisition marks a significant investment by Chengtun in the Democratic Republic of Congo (DRC).
The offer reflects a 33% premium over Loncor’s 30-day volume-weighted average price and a 16% premium compared to its closing price on the Toronto Stock Exchange (TSX) as of 10 October.
The arrangement agreement also includes a mutual reciprocal termination fee of C$10m, payable under certain circumstances.
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By GlobalDataLoncor executive chairman Arnold Kondrat said: “I am pleased to announce that we have entered into an agreement for the sale of the company, marking a significant achievement for all stakeholders. This transaction crystallises the inherent value we have built over 15 years and eliminates future dilution while mitigating commodity, political and execution risks. The sale delivers a strong outcome for shareholders.”
The acquisition marks the conclusion of Loncor’s 15-year tenure as a Toronto-listed exploration company dedicated to exploring the Ngayu greenstone belt in the north-east of the DRC.
The company’s Imbo project, featuring the Adumbi deposit, has been central to its exploration initiatives.
It boasts an indicated resource of 1.88 million ounces (moz) of gold and an inferred resource of 2.09moz, with nearly 85% of this attributed to Loncor.
The board of Loncor, along with its special committee of independent directors, has unanimously concluded that the agreement is fair and serves the best interests of the shareholders.
Shareholders of Loncor, who collectively hold approximately 38% of the company’s issued and outstanding shares, have agreed to support the deal through voting support agreements.
This group includes Resolute Mining, which holds an 18% stake, and Kondrat with a 17% stake.
The transaction is subject to customary conditions including shareholder, court and regulatory approvals.
Loncor shareholders are set to cast their votes on the deal during a special meeting.
For the deal to be approved, it must receive backing from two-thirds of the votes cast, as well as a majority of the minority shareholders, in accordance with Canadian securities regulations.
If the transaction receives approval, it is due to be finalised by the first quarter of 2026.
Following this, Loncor will be removed from the TSX listings and will no longer be a reporting issuer in Canada and the US.
