Second investment tranche triggered
Lake Victoria Gold (TSX-V:LVG; FRA: E1K) has overcome a formally crucial hurdle in acquiring the advanced Imwelo Gold Project in Tanzania. The company reports that the Tanzanian Revenue Authority (“TRA”) has finally issued the due tax assessment for the acquisition of the Imwelo Mining License (“ML”). The amount owed is within the expected range and is financially rather insignificant.
Lake Victoria intends to pay the tax liability immediately to obtain the tax clearance certificate necessary for the final transfer of the Imwelo License. This certificate, together with the already existing positive vote from the Fair Competition Commission (“FCC”), forms the prerequisite for the Mining Commission to transfer the title of the Imwelo Mining License to LVG. This transfer is considered a formality, as LVG has now fulfilled all requirements. The Imwelo project is production-ready and, together with the neighboring Dora project, has the potential for significant growth.
Marc Cernovitch, CEO and Director, commented: “We are very pleased to have reached this important milestone in the acquisition of the Imwelo project. With this, we have reached the final step in completing the acquisition. The transfer of the ML triggers the second tranche of investment from the TAIFA Group. The company continues to negotiate with several other debt and equity groups to fully finance the development of Imwelo and expects to make such an announcement in conjunction with the completion of the acquisition.”
Simon Benstead, Executive Chairman CFO of the company, stated: “The TRA tax assessment is a catalytic moment for the company as it allows us to complete the acquisition of Imwelo, proceed with the transfer of the mining license, and set our plans in motion. Although the process has taken longer than expected, we are now well-positioned to implement our aggressive growth and consolidation strategy in Tanzania. We are grateful for the support and patience of our shareholders, partners, and stakeholders throughout this process.”
Lake Victoria Gold stands out among the multitude of junior mining companies in many ways. The management has succeeded in working in Tanzania for more than ten years under sometimes extremely difficult conditions and building value, while almost all other explorers have left the country. Despite the long lead time, the company’s share structure remains intact. Management, directors, and close partners hold more than 60% of the shares. In addition, Barrick Gold owns a strategic capital stake in LVG. And through its wholly-owned subsidiary Taifa Mining, the largest private mining service provider in Tanzania, the powerful private Taifa Group now also has a stake in LVG. They will now increase their stake even further. The Tanzania-based Taifa Group is active in many industries in the country. Taifa Mining is the preferred contractor for most mines in Tanzania and maintains long-standing and successful relationships with companies such as Petra, De Beers, Barrick, and AngloGold Ashanti. Furthermore, Taifa owns the largest fleet of mining equipment in Tanzania. As a company, Taifa is committed to adhering to the latest internationally recognized standards. Taifa Mining will carry out all contract mining and construction work for the Imwelo project in the future.
Conclusion: Good things come to those who wait. About a year ago, LVG initiated what was probably the decisive strategic shift when it became apparent that the large Tembo exploration project, with which the company had started more than 13 years ago, would still consume a lot of money before a significant resource could be defined there. The change in focus was publicly documented by the name change from Tembo Gold to Lake Victoria Gold. With the acquisition of the production-ready Imwelo project, Lake Victoria Gold now aims to rise to the rank of a junior gold producer as quickly as possible. From this position and with the aforementioned partners behind it, LVG can play a significant role in the future consolidation of “stranded” gold assets in Tanzania. Goldinvest.de will accompany the company on its journey.
