Guess which 10-bagger ASX gold stock is surging 65% today on takeover news

ASX gold stock African Gold Limited (ASX: A1G) is on fire today.

African Gold shares closed yesterday trading for 31.5 cents. In late morning trade on Tuesday, shares are changing hands for 52 cents apiece, up 65.1%.

For some context, the All Ordinaries Index (ASX: XAO) is up 0.1% at this same time.

Today’s outperformance is par for the course for African Gold shares, which are now up a blistering 940% since this time last year.

And investors who bought the ASX gold stock in June 2024, when it was trading for a mere 2 cents per share, will now be sitting on 10-bagger plus gains of 2,525%.

Yep, that’s no typo.

Atop the soaring gold price (at US$4,225 per ounce, the yellow metal is up 60% in 12 months), here’s what’s grabbing ASX investor interest today.

ASX gold stock rips higher on takeover news

The African Gold share price is rocketing after the company announced it has entered into a binding scheme implementation deed with Canadian-based gold miner, Montage Gold Corp (TSE: MAU).

Under the agreement, Montage will acquire 100% of the shares in the ASX gold stock that it does not already hold. In exchange, African Gold shareholders will receive 0.0628 new Montage shares for every African Gold share held on the record date of the share scheme.

The scheme has an implied value of approximately 50 cents per African Gold share. With shares having risen to 52 cents apiece today, investors may be thinking that an even sweeter deal could be on the horizon.

Montage is currently the largest shareholder of the ASX gold stock, holding 17.3% of all shares.

African Gold’s independent directors unanimously support the scheme and recommend that African Gold shareholders and African Gold option holders vote in favour.

Under the deal, African Gold option holders will receive 0.0628 Montage options for every African Gold option they hold.

What is management saying?

Commenting on the takeover bid for the ASX gold stock, African Gold CEO Adam Oehlman said: “This transaction represents a compelling outcome for African Gold shareholders at this stage of the company’s evolution.”

Oehlman continued:

It validates the scale, quality and strategic positioning of the Didievi Gold Project and provides our shareholders with continued exposure to the upside through ownership in a larger, well-capitalised Côte d’Ivoire-focused gold company.

The board believes this proposed combination delivers scale, balance sheet strength and development expertise that materially de-risks Didievi and enhances its path toward production.

Montage CEO Martino De Ciccio added:

This significantly accretive transaction builds on the momentum generated thus far to advance our strategy of creating a premier African gold producer and delivering value for both Montage and African Gold stakeholders.

The post Guess which 10-bagger ASX gold stock is surging 65% today on takeover news appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.