Lake Victoria Gold Ltd. (TSX-V: LVG; FRA: E1K) has received final approval from the Toronto Stock Exchange for the acquisition of the Imwelo Gold Project in Tanzania. This concludes a complex transaction that the company had announced in August 2023. Through the purchase of Imwelo, the seller, Tanzoz Mineral Limited, becomes a new >10% shareholder of Lake Victoria Gold. Similarly, Rostam Aziz, one of Tanzania’s wealthiest entrepreneurs, will now hold more than 10% of Lake Victoria. The stock exchange has also approved this. The underlying mining license of Imwelo, ML 538/2015, irrevocably transfers to the possession of Lake Victoria Gold’s wholly-owned subsidiary, Tembo Gold Tanzania Limited. According to the terms of the license purchase agreement, the seller, Tanzoz Mineral Limited, receives a payment of CAD 5,500,000 in the form of 24,064,723 common shares of Lake Victoria Gold, corresponding to an assumed issue price of CAD 0.22 per share. Additionally, a one-time cash payment of USD 148,148 is due. With the takeover, Seth Dickinson, the seller’s managing director, has been appointed as Chief Operating Officer and director of the company.

The Lake Victoria shares issued to the seller are subject to an escrow agreement under the conditions listed below:

• 1/3 of the shares will be released from escrow once commercial production is achieved at the Imwelo Project;
• 1/3 of the shares (1/2 of the remaining shares) will be released 6 months after achieving commercial production at the Imwelo Project; and
• 1/3 of the shares (all remaining shares) will be released 12 months after achieving commercial production at the Imwelo Project.

If commercial production at the Imwelo Project is not achieved within three years of completing the acquisition, the remaining escrowed shares will be released to the seller. During the escrow period, the company retains voting rights over the escrowed shares according to the terms of a voting agreement concluded with the seller.

Taifa Acquires >10 Percent of Lake Victoria – Share Placement at CAD 0.22 Raises CAD 3.5 Million

Concurrently with the completion of the acquisition, the company has closed a private placement of 16,000,000 shares also at a price of CAD 0.22 with an affiliated company of the Tanzanian Taifa Mining and Civils Limited. Taifa now owns 10.86% of the company. The placement provides Lake Victoria with proceeds of CAD 3,520,000. Accompanying this, the company concluded a mining services agreement with Taifa. This stipulates that Taifa will provide mining services on the company’s properties. The company also concluded an investor rights agreement with the subscriber, granting them the right to participate in subsequent financings of the company to maintain their ownership position. Additionally, Rostam Aziz, the owner of Taifa, receives the right to nominate a member to the company’s board of directors as long as he owns or controls more than 10% of the outstanding shares.

Taifa, a company controlled by Rostam Aziz, had already signed a binding letter of intent with Lake Victoria in August 2023, in which Taifa agreed to a financing commitment totaling CAD 11,520,000, to be completed in three phases. The current private placement represents only the first phase. Rostam Aziz intends to acquire additional securities of the company under the financing commitment.

Simon Benstead, Executive Chairman CFO, said: “This milestone represents a pivotal moment for Lake Victoria Gold and its shareholders. The completion of the Imwelo mining license acquisition and the solidification of our strategic partnership with the Taifa Group reflect the unwavering commitment and perseverance of our team and partners. We thank our shareholders for their patience and support and are focused on advancing the project to deliver meaningful results and value for all stakeholders.”

Conclusion: Lake Victoria Gold has taken almost a year and a half to overcome all government hurdles and meet all stock exchange requirements for the Imwelo acquisition. This has been a tough test for shareholders. But who wants to look back now? With the stock exchange’s approval, the last uncertainty has been eliminated and the company can finally look forward. All parties involved, the seller as well as the future mining partner, Taifa, have adhered to the original agreement despite the duration of the transaction and accepted the agreed 0.22 CAD per share as the basis for the transaction – even though the price is lower today. In other respects, the delay has not been entirely disadvantageous for Lake Victoria. The gold price is almost 1,000 USD higher today than in August 2023! This creates much better conditions for financing the turnkey Imwelo mine today. For the targeted gold loan of 6,000 ounces with Monetary Metals, Lake Victoria will now receive significantly more capital. The quality of Lake Victoria is reflected not least in its shareholders: Barrick and one of Tanzania’s richest men, Rostam Aziz, are among them, with the latter already indicating his further financing participation. Looking at Lake Victoria’s current shareholder structure, it resembles more a private company predominantly owned by stakeholders. The large distribution to stock market investors – shareholders – is yet to come.