Update on Barrick Gold’s Exploration Work on Tembo
The formal transfer of the Imwelo mining license to
This tax assessment and payment is crucial as it represents the final hurdle before the official handover of the mining license. After receiving the tax notice, Lake Victoria expects a maximum of two to four weeks until the final transfer of the license. The completion of the final planning and the transfer of the mining license will trigger the second investment tranche from the Tanzanian TAIFA Group. Additionally, Lake Victoria Gold is conducting negotiations with a number of other debt and equity groups to fully finance the development of Imwelo.
The project has made significant progress since the start of final detailed planning in November 2023. With the commencement of preparatory earthworks and infrastructure development, the project is advancing as planned. The clearing and stockpiling of topsoil at the tailings storage facility and open pit site are important preparatory steps for the upcoming construction. The ball mill (the longest lead-time component) has been ordered, a down payment made, and refurbishment is underway. Compensation for landowners, a crucial aspect of community relations, is nearly complete for the second open pit area. The completion of a 300,000-liter capacity water tank is a significant milestone, ensuring the construction water needs for the project. There is a clear timeline for the construction and commissioning phase, which is expected to take approximately 12 months after the completion of the acquisition and financing.
The company has also submitted an application to extend the Imwelo mining license by ten years to the Tanzanian Mining Commission to secure the project’s long-term operational viability. Overall, these developments reflect a project that is progressing well and heading towards its operational phase.
Halfway Point in Barrick’s Four-Year Earn-In for Tembo Licenses
Two years after the start of Barrick’s earn-in, April 24 of this year marked the halfway point for Lake Victoria’s Tembo Project. Barrick now has two years remaining to complete the earn-in of the licenses. As a reminder: The Tembo project originally comprised seven prospecting licenses adjacent to Barrick Gold’s Bulyanhulu mine in the Lake Victoria goldfield in Tanzania. On December 7, 2021, the company and Barrick Gold and Bulyanhulu Gold Mine Limited (“Barrick”) entered into an agreement in which the company agreed to sell six of its non-core prospecting licenses in the Tembo project to Barrick. Barrick also agreed to conduct exploration work with minimum expenditures totaling $9,000,000 on the non-core licenses over a period of four years. Barrick has also agreed to make contingent payments to the company of up to $45,000,000 related to the inferred, indicated, and measured gold mineral resources identified on the non-core licenses (see press release from April 2022).
Recent activities by Barrick included an extensive aircore drilling program (50 m hole spacing along 400 m long lines) along paleo-valleys filled with dark clay-rich sediments known as “Mbuga” in Tanzania. The short drillings are intended to determine the geochemical and geological structure below the superficial cover. By the end of Q4 2023, 382 holes had been completed with a total length of 5607 m. Drilling will resume once the rainy season ends in Q2 2024. Buly’s expenditures to date amount to approximately $1,650,000 as of April 21, 2024 (2nd anniversary of the agreement), which represents about 18% of the required expenditures over the four-year commitment period. Buly is expected to spend approximately $2,000,000 by April 2025 ($500,000 for further aircore drilling, $750,000 for 6,000 m targeted reverse circulation drilling, and $750,000 for 2,500 m structural and geological diamond drilling).
Marc Cernovitch, President CEO, commented: “Buly’s expenditures reflect the commitment to thorough exploration, with a substantial budget for various drilling techniques targeting different depths and geological objectives, focusing on both broad-scale exploration and targeted drilling to refine the understanding of the geological framework. This phased approach allows for data-driven decision-making for future drilling and potential resource development.”
Simon Benstead, Executive Chairman CFO of the company, stated: “The process of completing the Imwelo acquisition has taken longer than expected, but we are very close to the finish line. We are grateful for the support of our shareholders, partners, and stakeholders who have accompanied us in this process in Canada and Tanzania. We will soon be perfectly positioned to implement our aggressive growth strategy and benefit from an environment that is proving increasingly bullish for the gold market.”
Conclusion: For about two years, the stock of Lake Victoria, formerly Tembo Gold, has been trading in a stable sideways movement within a price band limited to 0.25 CAD at the top and 0.15 CAD at the bottom. Just before the transformative transfer of the Imwelo mining license, the price is currently at 0.17 CAD. However, even the slightest trading volumes lead to price movements – both up and down. More important than the snapshot of the stock price is likely to be the view of future ownership structures, which LVG anticipates in its recent presentation. (see Figure 1) According to this, retail investors now make up only 16% of shareholders. All other shares belong to “stakeholders”, including 23% to management, 26% to Taifa, 16% to the Imwelo sellers, and 3% to Barrick. At least 16% of the shares will be held by institutional investors. This institutional share is likely to grow through placements and will play a significant role in future price development.
