Good Indicators for Potential Gold Mineralization
Already in 2022, Lake Victoria Gold (TSXV LVG / WKN A3E4WC) had transferred part of its Tembo license areas in Tanzania to Bulyanhulu Gold Mine Limited (“Buly”), a partnership between Barrick Gold and the government of the East African country. In addition to payments potentially in the double-digit millions, the world’s second-largest gold producer has also committed to investing millions of dollars in exploring the properties, which is now bearing its first fruits.
Although field work was delayed in the first quarter of 2024 due to the exceptionally strong rainy season, Buly / Barrick at least received the analysis results from initial drilling conducted in the fourth quarter of 2023. These have already been partially reviewed and evaluated, and the preliminary results showed promising, anomalous gold values along linear, geophysical structures believed to be geological contacts. Particularly interesting: Related smoky quartz veins suggest a similar geological environment to that found at the Bulyanhulu mine. According to Lake Victoria Gold, this in turn indicates possible gold mineralization.
In any case, field work resumed in the second quarter, with two drill rigs being moved to the northwestern part of the licenses. The focus was on the Kalemero target area, where possible extensions of the Bulyanhulu mineralization system under transported regolith were targeted.
Notable discoveries included moderate to strong shearing, quartz veins, and minor pyrite-sulfide mineralization that align with interpreted geological linear features. Further insights are eagerly anticipated, as according to Lake Victoria Gold, this is a crucial drilling phase for validating geological conditions and discovering targets for potential satellite ore bodies!
Now, in the third quarter, further drilling continues in the Ngula target area, where potential mineralization will be investigated and evaluated.
Good Indicators for Potential Gold Mineralization
David Scott, Managing Director Tanzania and geological advisor at Lake Victoria Gold, considers the geological structures encountered in Buly’s current drilling phase as promising, as they show similarities to those observed in productive areas of the Bulyanhulu mine. Mr. Scott further explained that the occurrence of strong shearing and quartz veins within these structures is “particularly encouraging” as these are good indicators for potential gold mineralization.
Now, Scott continues, Lake Victoria’s technical team is eagerly awaiting the results expected in the coming quarter. According to the expert, this will allow them to further define the potential scope and extent of mineralization within these licenses.
Marc Cernovitch, CEO Director, points out that while the bad weather in the first quarter and Barrick’s investments, which have been slower than expected so far, led to a slow start of exploration activities, these are now beginning to make progress. Not only do the promising results of the recent drilling campaign suggest potential continuity of the mineralization zones, but they also strengthen the confidence of Lake Victoria Gold’s management, according to Mr. Cernovitch. They will also use this information to strengthen the company’s position in the region. He sees good chances that Buly will discover new, significant deposits now that exploration activities are gaining momentum.
Analysts Reaffirm Price Target
In light of this news, analysts at Atrium Research reaffirm their buy recommendation for the Lake Victoria Gold stock and maintain their price target of 0.45 CAD. From the current price on the TSXV, this represents an upside potential of around 165%.
The experts remind that Barrick committed to investing $9 million in exploration activities on the areas acquired from Lake Victoria Gold. Furthermore, Atrium notes that a sliding scale of payments to Lake Victoria was agreed upon, dependent on achieving certain milestones in resource definition. In the most positive scenario, Lake Victoria Gold could receive up to $45 million.
