Excellent news from Lake Victoria Gold (TSXV LVG / Frankfurt E1K)! The company has almost cleared another crucial hurdle on the path to gold production in Tanzania!
As just announced, Lake Victoria’s subsidiary in the East African country, Tembo Gold, has reached an agreement in principle with the Government of Tanzania regarding its legally mandated participation in the Imwelo Gold Project!
A Lake Victoria team led by CEO Mark Cernovitch already met on September 10 with a negotiating delegation from Tanzania’s Ministry of Minerals, reaching an agreement in principle on key points, including the company’s participation in the mining project, as stipulated by Tanzanian law.
Lake Victoria Gold and Tanzania Agree on Joint Venture
This stipulates that the state receives a non-dilutable interest of at least 16% in all gold mining projects. This is to ensure that the population directly participates in the exploitation of the country’s raw materials. In addition to this stake, the following are stipulated:
• A 6% royalty on gold production and a 1% export duty;
• a reduction of the royalty to 4% if further processing of minerals takes place in Tanzania; and
• the requirement that 20% of the production be processed and sold within the country, with the Bank of Tanzania acquiring this share at market prices.
The goal is to maximize local benefits, strengthen national gold reserves, and ensure that Tanzanians fairly share in the benefits of mining.
As part of this process, Lake Victoria Gold and the Government of Tanzania will create a new joint venture company that will hold and operate the Imwelo mining license. The structure of this joint venture, according to the company, provides a transparent and lasting basis for cooperation between the company and the government.
The achievement of this agreement in principle can rightly be considered a milestone for Lake Victoria Gold. As CEO Cernovitch explained: “The government’s participation ensures that the Imwelo project is developed in line with national priorities, including responsible mining, in-country refining, and long-term value creation for all stakeholders.” Although the final permits and details still need to be completed, these initial steps lay the foundation for a constructive partnership.
Just yesterday, Lake Victoria announced the completion of a $6 million LIFE financing and the increase of a parallel private placement to $2 million. With this agreement, the company is now well on its way to advancing the Imwelo project towards construction and production. One of the biggest regulatory hurdles on that path has now been virtually overcome, the path to production and thus cash flow is now even clearer, and the project’s risk has been further reduced. The details of the agreement will follow once a definitive agreement is signed.
