Canadian miner Montage Gold on Tuesday said Chinese mining firm Zijin Mining Group would take a 9.9% strategic stake in the company through its brokered private placement.

Zijin Mining will purchase 32.7-million shares out of nearly 97.1-million common shares of the Vancouver, Canada-based company at C$1.75 a share, coming to nearly C$57.3-million upon completion of the offering by August 12.

The deal comes as Canada seeks to tighten its Investment Canada Act, under which deals involving a foreign company are reviewed to safeguard national security.

Montage said it believes the investment does not require approval from the Canadian government because Zijin will own less than 10% of Montage upon closing of the transaction, gold is not listed as a critical mineral by the Canadian government, and Montage's assets are outside of Canada.

In 2022, Canada ordered three Chinese companies to divest their investments in Canadian critical minerals, citing national security.

Earlier this year, copper miner Solaris Resources reported that Chinese state-owned Zijin Mining was planning to acquire a 15% stake in the Canadian miner, but scrapped the plans as it feared the deal was unlikely to meet the foreign investment standards.

Canada has told the mining industry that any major deals targeting the country's producers of critical minerals would only be approved under "the most exceptional circumstances."

Gold does not feature in the country's critical minerals list.

As part of the deal, the Lundin Family Trust also agreed to increase its stake in Montage from 17.7% to 19.9%.

Proceeds from the offering will be used for development expenditures and exploration at Montage's Kone project in Ivory Coast.

Montage said the investment will help it raise additional capital. It plans to have its additional financing in place before the 2025 first quarter when it will start construction of the Kone mine.