Lake Victoria Gold asks Katoro for extension to Imweru acquisition due date
Tanzania-focussed exploration and development company Katoro Gold updated the market on the proposed acquisition of the Imweru gold project by Lake Victoria Gold (LVG) on Friday, reporting that it had been “working closely” with the LVG team to finalise the proposed acquisition.
The AIM-traded firm said the proposed acquisition, on completion, would combine two strategic gold assets in LVG, increasing the project footprint and in-situ gold resource, which the board of Katoro said it believed would allow a “considerably faster route” to gold production.
It said that, as the deadline for completion of the proposed acquisition was 31 October, LVG had requested an extension to finalise the transaction and for the payment of the first tranche of cash due to Katoro under the term sheet of $50,000, with the board saying it was considering the request.
Notwithstanding that request, the board said it believed that seeking to complete the disposal of Imweru to LVG was still in the company's best interests.
Katoro Gold also noted that there had recently been interest expressed in Katoro's Lake Victoria gold interests by other third parties.
It said that, while its focus for now remained on working with LVG, the board would consider other proposals should they be appropriate.
“The operating environment for gold companies in Tanzania is experiencing some recovery and investor sentiment toward the gold sector in-country is improving,” said executive chairman Louis Coetzee.
“We note that Barrick Gold recently announced its return to operations in Tanzania following an amicable settlement of its dispute with the Tanzanian Government.
“This improved sentiment is evident through the level of interest shown by other gold mining companies in Katoro's Tanzanian gold projects.”
Coetzee said the company was “encouraged” by the emerging optionality that the increasing interest in its gold interests provided.
“So, whilst we would like to see the LVG acquisition complete, and we expect that to occur, there are possible alternative value generative routes available.
“In addition, the current gold price has moved in the company's favour, at $1,495 per ounce - the gold price is up 17% year-to-date, its best performance since 2010.
“I look forward to providing further updates on the LVG acquisition at the appropriate time in due course.”