Loncor Gold Inc. (TSX:LN, OTCQX:LONCF) shares rallied more than 15% on news that it has agreed to sell its non-core Makapela gold property in the Democratic Republic of Congo (DRC) for C$13.5 million in cash.
The sale provides it with significant non-dilutive capital to advance its flagship Adumbi gold deposit, also in the DRC, Loncor said in a statement.
Under the agreement, Loncor will receive a series of progress payments beginning with a deposit of C$2 million. The balance will be paid upon completion of the transfer of title to Makapela, which is expected to occur before the end of February 2024.
"Loncor has conducted a number of discussions with potential strategic partners over the last 18 months, many of which involved proposals that would have resulted in significant equity dilution," Loncor CEO John Barker said in a statement.
"We believe the sale of the non-core Makapela property provides Loncor with an opportunistic route to raise significant non-dilutive financing, and represents a major step towards further development of our world-class Adumbi gold deposit and the numerous other targets along structure from Adumbi."
The Adumbi deposit in the DRC's Ngayu Greenstone Belt holds an indicated mineral resource of 1.88 million ounces of gold and the Adumbi deposit and two neighbouring deposits hold an inferred mineral resource of 2.090 million ounces of gold, with 84.68% of these resources being attributable to Loncor. A mining permit has already been granted for the development of Adumbi and the DRC government holds a direct 10% free carry holding in the project.
Loncor's shares closed 20.3% higher at C$0.39 on Wednesday afternoon.
~updated with share price movement~