Commodities and the stocks of producers and project developers are slowly awakening from their slumber. Because so much money is currently flowing into the sector, more than has been seen in a long time, many companies are seizing the opportunity to conduct capital increases. Lake Victoria Gold (TSX.V: LVG, FSE: E1K, WKN: A3E4WC) is also taking advantage of this by launching a private placement.
New shares of the company are to be issued at a price of 0.175 Canadian Dollars (CAD). If the issue is fully subscribed, the company will receive gross proceeds of up to six million CAD. For the placement to proceed, offers worth at least three million CAD must be submitted.
For each share issued, investors will also receive half a warrant. Two of these warrants entitle the holder to acquire an additional Lake Victoria Gold common share at an exercise price of 0.27 CAD within the next three years. The units issued as part of a life placement are not subject to any holding period.
In addition to the life private placement, Lake Victoria Gold is simultaneously issuing up to 8,571,428 shares at a price of 0.175 CAD in a non-brokered private placement. This measure will bring in an additional 1.5 million CAD in new capital for the company. All shares issued under this private placement are subject to the statutory holding period of four months and one day.
Insider Participation in Capital Increase Expected
The company currently expects the capital increases to be completed around August 29. It is anticipated that company insiders, who hold more than 60% of the shares, will subscribe for a portion of the issued shares to avoid diluting their stake in the company. This is also a positive sign for all other shareholders, as it clearly indicates that the leading employees and their associates firmly believe in the company’s success and are willing to support it with their own money.
The newly raised capital will primarily be used for the exploration and maintenance of the Tembo and Imwelo gold projects in the Lake Victoria Goldfield in Tanzania. At Tembo, which is 100% owned by Lake Victoria Gold, over 50,000 meters of drilling have been completed in the past. Barrick’s Bulyanhulu mine is located not far from this project.
The Imwelo project is located west of AngloGold Ashanti’s Geita gold mine and is also 100% owned by Lake Victoria Gold. It is not only fully permitted for exploration but also has a historical resource, a preliminary feasibility study from 2021, and all necessary permits for mine construction. This offers a very short-term opportunity for successful development.
