Positive signal: Analysts reiterate “buy” rating and price target for Lake Victoria Gold

Analysts at Atrium Research have looked at the latest news from gold company Lake Victoria Gold (TSXV LVG / WKN A3E4WC) and believe that this is an “important milestone”. In view of this, they are reiterating their price target of CAD 0.45 and their “buy” rating for the stock.

Lake Victoria Gold, which we have been following on Goldinvest.de for a long time, announced a few days ago that the Tanzanian Revenue Authority (“TRA”) had finally issued the tax assessment notice due for the acquisition of the Imwelo mining license. According to Atrium, it is important to note that the tax payment is within the range expected by the company. Accordingly, Lake Victoria Gold will make the payment shortly and the TRA will then issue a certificate to the company. This certificate, together with the recently received approval from the Fair Competition Commission, is necessary for the Tanzanian Mining Commission to transfer the mining license for Imwelo to Lake Victoria.

Work is already underway to fully finance Imwelo

The process has taken longer than expected, says Atrium Research, but this latest announcement represents an “important milestone” in the acquisition of the Imwelo project, with Lake Victoria Gold now close to completion of the deal. The experts point out that the completion of the license transfer will trigger the second tranche of the investment agreed with Tanzanian TAIFA Group. In addition, Lake Victoria is advancing negotiations with several other potential financiers to fully fund the development of Imwelo. The company expects to be able to announce completion in this regard once the acquisition is finalized.

The Tembo project

The analysts point out that Lake Victoria Gold is currently prioritizing its capital for the development of Imwelo and is therefore leaving it to its partner and shareholder Barrick Gold to advance exploration on the areas adjacent to the Tembo project – and thus obtain important data. Apart from this, the industry giant’s work could trigger up to USD 45 million in payments to Lake Victoria, according to Atrium, should Barrick be successful with its exploration there.

Valuation

Atrium values Lake Victoria’s interest in the Imwelo gold project at $0.12/share, the Tembo gold project at $0.11/share, the Dora project at $0.09/share, the agreement with Barrick at $0.14/share and the PF cash balance at $0.04/share. A conservative 0.3x NAV multiple and an 8% discount rate are used for the Imwelo project as the company has yet to complete construction and produce gold, says Atrium.

The analysts therefore see the price target for Lake Victoria Gold shares at CAD 0.45, which means an upside potential of 125% from the current price of CAD 0.20.

The analysts like the company as it is on the way to production with Imwelo (first half of 2025), has cash available through strategic partnerships (Barrick and TAIFA) and has great exploration potential at both Imwelo and Tembo. The management is also “motivated” in view of its significant stake in the company, explains Atrium.

Atrium sees the completion of the Imwelo acquisition and the subsequent financing by TAIFA (Q3/24), merger and acquisition activity and ongoing drill results from this year’s program as triggers for possible share price increases. The experts also believe that the next milestones in Imwelo’s development could bring renewed momentum to the stock.