Lake Victoria Gold: Transfer of Imwelo Mining License Close to the Finish Line

The formal transfer of the Imwelo Mining License to Lake Victoria Gold (TSX-V:LVG; FRA: E1K) is fast approaching. In today’s update on the status of developments, the company reminds that the approval of the Fair Competition Commission (“FCC”) for the acquisition of the Imwelo mining license has already been received. The Tanzanian tax authorities are currently reviewing the capital gains tax due on this transaction and a decision is expected shortly. This tax assessment and payment is of crucial importance as it is the last hurdle before the official transfer of the mining license.

Once the tax assessment is received, Lake Victoria anticipates a maximum of two to four weeks until the final transfer of the license. The completion of final planning and the transfer of the mining license will trigger the second tranche of investment by the Tanzanian TAIFA Group. In addition, Lake Victoria Gold is in negotiations with a number of other debt and equity groups to fully fund the development of Imwelo.

The project has made significant progress since the start of final detailed engineering in November 2023. With the start of preparatory earthworks and infrastructure development, the project is progressing as planned. The clearing and backfilling of topsoil at the overburden storage site and at the site of the opencast mine are important preparatory steps for the upcoming construction. The ball mill (the longest-needed component) has been ordered, a down payment has been made and repairs are underway. Landowner compensation, an important aspect of community relations, is almost complete for the second open pit area. The completion of a water tank with a capacity of 300,000 liters is an important milestone that will ensure the construction water requirements for the project are met. There is a clear timeline for the construction and commissioning phase, which is expected to take around 12 months once the acquisition and financing have been completed.

The company has also submitted an application to the Tanzanian Mining Commission to extend the Imwelo mining license by ten years to ensure the long-term viability of the project. Overall, these developments reflect a project that is progressing well and heading towards its operational phase.

Halfway through the four-year earn-in for Tembo licenses by Barrick

Two years after Barrick’s earn-in began, April 24 of this year marked the halfway point for the Lake Victoria Tembo project. Barrick now has two years left to complete the earn-in of the licenses. As a reminder, the Tembo project originally comprised seven mining licenses adjacent to Barrick Gold’s Bulyanhulu mine in the Lake Victoria goldfield in Tanzania. On December 7, 2021, the Company and Barrick Gold Corporation and Bulyanhulu Gold Mine Limited (“Barrick”) entered into an agreement whereby the Company agreed to sell six of its non-core prospecting licenses at the Tembo Project to Barrick. Barrick also agreed to carry out exploration work on the non-core licenses for a period of four years for a minimum total expenditure of US$9,000,000. Barrick has also agreed to make contingent payments to the Company of up to US$45,000,000 related to the Inferred, Indicated and Measured gold mineral resources identified on the Non-Core Licenses (see April 2022 press release).

Barrick’s recent activities have included a wide-spaced aircore drilling program (50m drill hole interval along 400m long lines) along paleo-valleys filled with dark clay-rich sediments known in Tanzania as “Mbuga”. The short drill holes are designed to determine the geochemical and geological structure beneath the surface cover. By the end of Q4 2023, 382 drill holes with a total length of 5607 meters have been completed. Drilling will resume as soon as the rainy season ends in Q2 2024. Buly’s expenditure to date to April 21, 2024 (2nd anniversary of the agreement) is approximately US$1,650,000, which represents approximately 18% of the required expenditure over the four year commitment period. Buly expects to spend approximately US$2,000,000 by April 2025 (US$500,000 for additional aircore drilling, US$750,000 for 6,000 meters of targeted reverse circulation drilling and US$750,000 for 2,500 meters of structural and geological diamond drilling).

Marc Cernovitch, President & CEO, commented, “Buly’s expenditures reflect a commitment to in-depth exploration, with a significant budget for various drilling techniques targeting different depths and geologic targets, focusing on both broad-based exploration and targeted drilling to refine the understanding of the geologic framework. This phased approach will enable data-driven decision making for future drilling and potential resource development,” said.

Simon Benstead, Executive Chairman & CFO of the Company, commented: “The process of completing the acquisition of Imwelo 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 guided us through this process in Canada and Tanzania. We will soon be perfectly positioned to execute our aggressive growth strategy and capitalize on an environment that is proving increasingly bullish for the gold market.”

Conclusion: For around two years, the shares of Lake Victoria, formerly Tembo Gold, have been trading in a stable sideways movement in a price band that is capped at CAD 0.25 and capped at CAD 0.15 on the downside. Shortly before the transformative transfer of the Imwelo mining license, the share price is currently quoted at CAD 0.17. However, even the slightest turnover leads to price movements – upwards and downwards. More important than the snapshot of the share price is probably a look at the future ownership structure, which LVG anticipates in its latest presentation. (see Figure 1) Retail investors will only account for 16% of shareholders. All other shares belong to “stakeholders”, including management 23%, Taifa 26%, the Imwelo sellers 16% and Barrick 3%. As many as 16% of the shares will be held by institutional investors. This institutional share is likely to grow through placements and play a significant role in future share price performance.