Tietto Minerals secures $49.3m placement to fast-track heap leach studies

West African explorer Tietto Minerals (ASX: TIE) has entered into a share placement deal with a Chinese gold company to raise almost $50 million to fast-track studies and expanded exploration at its flagship Abujar gold project in Côte d’Ivoire.

Under a binding placement agreement, Tietto will issue 85 million new shares at $0.58 per ordinary share to Chijin International (HK) Limited, a subsidiary of Shanghai-listed Chifeng Jilong Gold Mining Co Ltd (Chifeng Gold).

The funds will be used to accelerate studies of the potential heap leach project at Abujar and expanded exploration drilling with a growing fleet of eight diamond rigs.

Tietto managing director Dr Caigen Wang welcomed Chifeng Gold’s substantial investment in a statement on Monday.

“This placement means Tietto is secure in its pathway to first gold production at the Abujar gold project as we look forward to delivering the updated life-of-mine production plan in Q3 CY22,” he said.

Abujar is expected to become one of the largest gold mines in Côte d’Ivoire, with an estimated production rate of 260,000 ounces gold in the first year and 1.2Moz over the first six years.

In recent months, Tietto has been reporting a steady stream of high-grade gold results from ongoing infill drilling at the AG Core prospect within the project. This area is expected to be one of the first to be mined during the initial stages of gold production later this year.

Chifeng Gold views West Africa as a strategic region

Chifeng Gold is principally engaged in gold production and sales with its main gold product deriving from mines in China, Laos and Ghana.

Chifeng Gold president and chairman Jianhua Wang said West Africa is a strategic region for the company as it aims to “grow responsibly” into a globally accepted and recognised sustainable major gold producer.

“The strategic investment into Tietto is in line with and driven by Chifeng Gold’s investment thesis. We look to further strengthening our relationship with Tietto in the future, working hand in hand to thrive in the gold industry in West Africa and beyond,” he said.

Deal includes Chifeng Gold’s right to appoint a director to Tietto’s board

The placement price of $0.58 per share represents an approximate 15% premium to the 20-day volume weighted average price (VWAP) of Tietto’s shares as at 7 September.

Upon completion of the placement, Chifeng Gold will, together with its associates, hold a 7.87% interest in Tietto.

The placement is expected to be completed in one tranche on 16 September, conditional upon Chifeng Gold obtaining any regulatory approvals necessary to carry out the placement.

Tietto has also granted Chifeng Gold the right to appoint a non-executive director to its board within 90 days of completion of the placement.