July 16 (Reuters) - Canadian miner Montage Gold ( MAUTF )

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 would purchase 32.7 million shares out of

nearly 97.1 million common shares of the Vancouver, Canada-based

company at C$1.75 per share, coming to nearly C$57.3 million

($41.90 million) upon completion of the offering by Aug. 12.

This comes as Canada seeks to tighten its Investment Canada

Act, under which deals involving a foreign company are reviewed

to safeguard national security.

In 2022, three Chinese companies were ordered to divest

their investments in Canadian critical minerals, citing national

security.

Earlier this year, Solaris Resources ( SLSR ) reported 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 also 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".

However, gold doesn't feature in the country's critical

minerals list.

As part of the deal, the Lundin Family Trust also agreed

increase its stake in the company from 17.7% to 19.9%.

Proceeds from the offering would be used for development

expenditures and exploration at the Montage's Kone Project in

Cote d'Ivoire.

($1 = 1.3676 Canadian dollars)