Lake Victoria Gold Ltd. has shared an update on its Imwelo and Tembo properties, showcasing the company's continued progress on both projects, according to a note from Atrium Research.
Lake Victoria Gold Ltd. provided an update on its Imwelo and Tembo properties on May 8, 2024, highlighting the continued progress of both projects.
Atrium Research analysts Ben Pirie and Nicholas Cortellucci, in a research flash released the same day, maintained their Buy rating and C$0.45 per share price target on the company, representing 150% upside potential.
“Progress on the Imwelo project continues with the final stage before the official transfer of the mining license underway, and further preparatory works at the site are underway,” the analysts noted. “Barrick Gold Corp. (ABX:TSX; OR:NYSE) continues to invest substantial capital in the surrounding Tembo permits, which we are excited about as LVG will share in Barrick's exploration success.
On the Imwelo property, the Tanzania Fair Competition Commission (FCC) has approved the acquisition of ML538/2015 from Tanzoz Minerals Limited. The Tanzania Revenue Authority is currently assessing the capital gains tax due on the transaction, and a decision is expected shortly. This contribution and tax payment constitutes the last step before the official transfer of the mining permit and triggers the second tranche of investment by the TAIFA Group.
“LVG said it is at an advanced stage with a number of debt and equity groups that will finance the construction and development of Imwelo,” the analysts pointed out. The company has made significant progress in the development of Imwelo, including preparatory earthworks, infrastructure development and securing the project's water supply. The construction schedule remains on schedule, with completion expected approximately 12 months after acquisition and financing close.
Concerning the Tembo property, Lake Victoria Gold does not plan to carry out major exploration activities for two reasons.
“Firstly, because the company needs to conserve capital for the development of Imwelo, and secondly, Barrick Gold is exploring the lands surrounding the Tembo property, which essentially provides LVG with valuable exploration data on the surrounding area, at no cost for society,” Pirie said. and Cortellucci explained.
The partnership with Barrick could result in cash payments of up to US$45 million for Lake Victoria Gold, subject to exploration success.
Analysts have identified several key catalysts for Lake Victoria Gold, including the first resource from the Tembo Gold project in the first quarter of 2024, ongoing M&A and 2024 drilling results, as well as key development milestones for the Imwelo project all throughout the year.
Pirie and Cortellucci highlighted the company's path to profitability with production from Imwelo expected in the first half of 2025, strategic partnerships with Barrick and Taifa providing liquidity, exploration prospects on all projects and direction motivated with significant internal participation as the main reasons for their positive view of Lake Victoria Gold. .
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Disclosures for Atrium Research, Lake Victoria Gold, May 8, 2024
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