Loncor Gold to be acquired by Chengtun for $1.38/share

The most recent news (2025-10-14) announces that Loncor Gold Inc. is to be acquired by Chengtun Gold Ontario Inc., a subsidiary of Chengtun Mining Group Co. Ltd., for C$1.38 per share in an all-cash transaction. The total equity value of the acquisition is approximately C$261 million on a fully diluted basis. This offer represents a 33% premium over Loncor's 30-day volume-weighted average trading price (VWAP) and a 16% premium over its closing price on October 10, 2025 (C$1.19).

Key details of the acquisition include: * Transaction Mechanism: Court-approved plan of arrangement under the Business Corporations Act (Ontario). * Stakeholder Support: Approximately 38% of Loncor's shares are under voting support agreements, including significant commitments from Resolute Mining Ltd. (approx. 18%) and Arnold Kondrat (Executive Chairman, approx. 17%). * Deal Protection: Customary non-solicitation covenant with a "fiduciary out" provision allowing Loncor to consider superior proposals, subject to Chengtun Mining's right to match. * Termination Fee: A mutual reciprocal termination fee of C$10 million is stipulated. * Warrants and Options: Outstanding stock options and warrants will be exchanged for a cash payment equal to the consideration minus their exercise price. * Purchaser Advances: Chengtun will provide a US$3 million refundable advance within 60 days of the agreement date to fund Loncor's ongoing exploration program at the Adumbi deposit and general corporate purposes. * Conditions to Completion: Includes approval from Loncor shareholders (66.67% of votes cast, plus a majority excluding minority shareholders), Toronto Stock Exchange acceptance, and Ontario Superior Court approval, among other standard conditions. * Timeline: Expected to close no later than Q1 2026. Post-completion, Loncor shares will be delisted, and the company will cease to be a reporting issuer. * Board Recommendation: Loncor's Board of Directors, following a unanimous recommendation from a special committee of independent directors, unanimously determined the transaction is fair and in the best interest of shareholders and recommends voting in favour.

Earlier news releases indicate the progression leading to this acquisition: * 2025-07-14: Loncor Gold struck a special committee to consider an unsolicited, confidential non-binding takeover bid. * Throughout 2024-2025: Loncor was engaged in an 11,000-meter deep drilling program at its Adumbi deposit, aiming to delineate a significant underground resource below the existing open pit. This program faced initial challenges with "metreage drilled... not met expectations" (2025-08-06) and "logistical problems, including breakdowns" (2025-01-17), leading to the addition of a third rig (2025-08-06). Drill results from LADD029 (2025-04-25, 2025-05-06), LADD030 (2025-07-29), LADD028 (2025-03-10), and LADD027 (2025-02-26) consistently reported significant gold intersections and evidence of the Banded Ironstone Formation (BIF) thickening at depth, supporting the underground potential. * 2025-05-23: Loncor closed a C$9.4 million private placement (17,090,910 units at C$0.55/unit) for exploration and general corporate purposes, significantly improving its cash position from C$141,804 in March 2025 to C$4.59 million in June 2025. * 2023-12-13: Loncor sold its non-core Makapela property for C$13.5 million to fund the development of the Adumbi deposit, explicitly seeking non-dilutive financing.

The acquisition of Loncor Gold by Chengtun Mining for C$1.38 per share is a Material - Game Changer. This is a definitive event that fundamentally alters the investment landscape for Loncor's shareholders.

1. Crystallization of Value: The all-cash offer provides immediate, certain value for shareholders, effectively crystallizing the inherent value of the Adumbi gold deposit that Loncor had been working to de-risk and develop for years.
2. Significant Premium: The 16% premium over the last closing price and 33% over the 30-day VWAP is substantial, especially for a junior exploration company operating in a challenging jurisdiction. This indicates that Chengtun Mining sees significant value in Loncor's assets, particularly the Adumbi deposit's resource potential and permitted status.
3. Risk Mitigation: The transaction eliminates all future financial, operational, commodity price, political, and execution risks associated with developing a gold mine in the Democratic Republic of Congo. Loncor's history reflects these challenges, including the need for frequent financings, logistical hurdles in drilling, and the inherent uncertainties of exploration. Shareholders are now assured a fixed cash payout, rather than being exposed to these ongoing risks.
4. Strong Support and Recommendation: The unanimous recommendation from Loncor's Board and a special committee of independent directors, supported by a fairness opinion, signals that the deal is considered to be in the best interest of shareholders. Furthermore, the commitment from key shareholders (Resolute Mining and Arnold Kondrat), representing 38% of outstanding shares, significantly de-risks the shareholder approval process.
5. Funding Certainty: The US$3 million refundable advance from Chengtun for ongoing exploration and corporate purposes ensures that Loncor can continue its operations until the transaction closes without needing further dilutive financings. This bridges the gap and maintains project momentum during the transition period.
6. Strategic Shift: Loncor Gold, from an independent entity focused on discovery and development, will transition into a part of a larger, established mining group. For existing shareholders, this is an immediate liquidity event rather than a long-term growth investment.

The deal concludes Loncor's trajectory as a standalone explorer, offering a clear and favorable exit for its investors.

Loncor Gold Inc. is a gold exploration company with its primary focus on the Ngayu greenstone gold belt in the Democratic Republic of the Congo (DRC). The company holds an 84.68% attributable interest in its flagship Adumbi deposit, which has an existing mining permit. The DRC government holds a 10% free-carry interest in the project.

Adumbi Deposit Highlights: * Mineral Resources (within a US$1,600/oz open pit shell, as per Dec 2021 PEA): * Indicated: 1.88 million ounces of gold (28.185 million tonnes at 2.08 g/t Au). * Inferred: 1.78 million ounces of gold (20.83 million tonnes at 2.65 g/t Au). * Total (Indicated + Inferred): 3.66 million ounces. * Underground Exploration Target: Below the current open-pit resource, there is a conceptual underground exploration target of 8.9 to 9.6 million tonnes grading 4.7 to 4.9 g/t Au, extending up to 800 meters below surface. This target, if delineated, could significantly increase the overall resource. * Geology: Gold mineralization is primarily hosted within the Banded Ironstone Formation (BIF), which has shown increasing thickness with depth. * Location: The project is strategically located approximately 220 kilometers from the Kibali Gold Mine, one of Africa's largest gold mines, which is operated by Barrick Gold and AngloGold Ashanti. This proximity suggests potential access to regional infrastructure and a skilled workforce.

Prior to the acquisition, Loncor's strategy revolved around aggressively drilling the Adumbi deposit to expand the resource, particularly the underground potential, with the ultimate goal of advancing it towards "Tier 1 status" and potentially developing a combined open pit and underground operation.

Additionally, Loncor had a leasing agreement with Ding Sheng Services S.A.R.L. for alluvial potential south of Adumbi, which provided some revenue (though declining to nil by Q2 2025). The company also sold its non-core Makapela project for C$13.5 million in late 2023 to provide non-dilutive funding for Adumbi's development.