Gold and nickel exploration and development company Katoro Gold will sell its Tanzanian Imweru gold project to Australia-based gold and mineral exploration company Lake Victoria Gold (LVG) for $1-million in cash or shares and a 1.5% net smelter royalty (NSR) on all future gold production from Imweru.
Prior to the disposal, Katoro’s wholly owned subsidiary, Reef Miners, held the Imweru Gold project.
The disposal of Imweru was originally structured to include the disposal of both the Imweru and Lubando projects (which sit within Reef Miners). This will now, though, only involve the disposal of the Imweru project, with Lubando now being retained by Katoro.
LVG is an unlisted public company operating multiple exploration licences including its key project – the Imwelo gold project, which is adjacent to Imweru.
Both Imweru and Imwelo are located in the Lake Victoria Goldfields region of northern Tanzania, a proven mineral district that currently hosts both AngloGold Ashanti’s Geita gold mine and Barrick Gold's Bulyanhulu gold mine.
Katoro says the disposal of Imweru will enable the two projects to be combined, thereby creating a project with a larger footprint and in-situ gold resource, enabling a faster route to gold production for Imweru.
“By combining Imwelo and Imweru, the board believes that Imweru has a greater chance of being brought into production, potentially in the near term, thereby providing a revenue generative opportunity for Katoro through the NSR,” says Katoro chairperson Louis Coetzee.
He adds that freeing up Katoro’s financial and managerial resources will enable the company to concentrate on the Blyvoor joint venture (JV) project, in South Africa, which is focused on the reprocessing of an existing 1.34-million-ounce gold tailings resource.
Katoro also owns an interest in the Haneti nickel, platinum-group elements, gold and lithium project, which the Katoro board believes has substantial exploration upside potential.