Lake Victoria Gold (TSX-V:LVG) expects to close up to C$32.2 million ($33 million) in financing by 30 November to advance its Imwelo Gold Project towards production and expand drilling at the Tembo Gold Project.
The company signed a non-binding term sheet with Dubai-registered investor HOB Energy, wholly owned by Ozcan Halac, for a non-brokered private placement of roughly 90.73 million shares at C$0.30 each to raise C$27.2 million.
A concurrent placement of up to around 16.66 million shares at C$0.30 raising up to C$5 million, offered to existing significant shareholders to maintain pro rata ownership.
Proceeds will fund development at the fully permitted Imwelo Project and a larger drilling program at Tembo, which recently received a maiden mineral resource estimate.
Upon completion, HOB would hold about 29.17% of shares on a non-diluted basis, or 25% fully diluted, making it a control person under TSX Venture Exchange policies. HOB can then appoint up to three directors to a reconstituted seven-member board, a COO, and two members of a four-person technical steering committee.
Lake Victoria Gold notes that current senior management remains in place.
Completion requires disinterested shareholder approval by written consent, regulatory approvals, and due diligence.
President and CEO Marc Cernovitch says the company is ‘delighted’ to welcome Ozcan Halac and HOB as a long-term strategic partner.
“The Halac family’s multigenerational experience across the gold value chain brings far more than capital to Lake Victoria Gold,” Cernovitch says.
He also adds that the Tembo resource underpins a bigger exploration effort.
“We see clear opportunities to expand our existing deposits and we have a deep pipeline of additional targets that warrant systematic testing,” Cernovitch says.
Neither project has mineral reserves or a Feasibility Study, and a proposed toll milling arrangement with Nyati Resources at Tembo requires a definitive agreement.
Executive Chairman Simon Benstead says the transaction is “not simply a financing”.
“It pairs substantial development and exploration capital with HOB’s gold-sector experience and its technical and commercial capabilities,” Benstead says.
“That combination would allow us to advance Imwelo’s path to production while investing more decisively in resource growth at Tembo.”
Lake Victoria Gold is a rapidly growing gold explorer and developer focused on growth and consolidation in the Lake Victoria goldfield in Tanzania.
Write to Paula Fabe at Mining.com.au
Main image: Lake Victoria Gold
