Lake Victoria Gold Ltd. (LVG:TSXV) 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 published the same day, maintained their Buy rating and target price of CA$0.45 per share on the company, representing a potential upside of 150%.
"Progress at the Imwelo Project is continuing with the final step before the official transfer of the mining license underway, and other preparatory work at the site is proceeding," the analysts noted. "Barrick Gold Corp. (ABX:TSX; GOLD:NYSE) continues to invest substantial capital into the surrounding Tembo licenses, which excites us as LVG will share in Barrick's exploration success."
At the Imwelo property, the Tanzanian Fair Competition Commission (FCC) has approved the acquisition of the ML538/2015 from Tanzoz Minerals Limited. The Tanzania Revenue Authority is currently assessing the capital gain tax due on the transaction, with a decision expected shortly. This tax assessment and payment is the final step before the official transfer of the mining license and triggers the second tranche of investment from TAIFA Group.
"LVG stated that it is in advanced stages with a number of debt and equity groups that will fund the construction and development of Imwelo," the analysts highlighted. The company has made significant progress in developing Imwelo, including preparatory earthworks, infrastructure development, and securing the project's water supply. The construction timeline remains on track, with completion expected approximately 12 months following the closing of the acquisition and financing.
Regarding the Tembo property, Lake Victoria Gold does not plan to perform any major exploration activities for two reasons.
"First, because the Company needs to conserve capital for Imwelo development, and second, Barrick Gold is exploring the grounds surrounding the Tembo property, which is essentially providing LVG with valuable exploration data on the surrounding area at no cost to the company," Pirie and Cortellucci explained.
The partnership with Barrick could see cash payments as high as US$45M for Lake Victoria Gold, contingent on exploration success.
The analysts identified several key catalysts for Lake Victoria Gold, including the Tembo Gold Project maiden resource in Q1 2024, ongoing M&A and 2024 drill results, and key development milestones for the Imwelo project throughout the year.
Pirie and Cortellucci highlighted the company's path to profitability with Imwelo production expected in H1 2025, strategic partnerships with Barrick and Taifa providing cash, exploration upside across all projects, and motivated management with significant insider ownership as key reasons for their positive view on Lake Victoria Gold.
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Disclosures for Atrium Research, Lake Victoria Gold, May 8, 2024
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