Aim-listed Katoro Gold has agreed a term sheet with Lake Victoria Gold (LVG) for the proposed disposal of 100% of Katoro’s wholly-owned subsidiary Reef Miners to LVG for $1-million and a 1.5% net smelter royalty (NSR).
Reef Miners owns the Imweru and Lubando gold projects in northern Tanzania.
Katoro executive chairperson Louis Coetzee said the company believes LVG is well-positioned to develop the projects so that their potential is fully realised.
To this end, the optionality within the term sheet enables Katoro to have the ability to retrieve equity in the projects by retaining the option to, at Katoro’s sole discretion, accept LVG shares in lieu of cash for payments subsequent to an initial $50 000 payment, as well as retaining a 1.5% NSR.
The proposed disposal also releases Katoro’s resources so that it can focus on its Haneti project, as well as exploring other value-driving opportunities.
The proposed disposal is reflective of Katoro's strategy to develop a portfolio of assets focused on the battery metals sector.
The recent acquisition of the Haneti nickel project has attracted significant interest from investors and the company has been involved in the evaluation of further opportunities as it looks to capitalise on the battery metal demand fundamentals and deliver value for its shareholders, Katoro said on Thursday.