Tanzania – The dual-listed Tanzania focused mineral exploration and development company and Lake Victoria Gold intend to amalgamate its Imweru and Imwelo gold projects by vending both projects into a new company NEWCO.
The objective for the amalgamation is to fast-track the development of a gold mine on the project based on the combined existing stated resource base of approximately 755 000 oz gold.
The initial board of NEWCO will consist of Louis Coetzee (Kibo/ Executive Chairman); Seth Dickinson (Lake Victoria/CEO); Bjorn Zikarsky (Lake Victoria/ financial director); Noel O’ Keeffe (Kibo); and Louis Scheepers (Kibo).
It is the intention of the sponsors that the MOU will be followed by a definitive agreement by no later than 30 June 2016.
Imweru and Imwelo projects background
Kibo Mining’s Imweru gold project and Lake Victoria’s Imwelo gold project are located in the gold prolific Lake Victoria Goldfield of northern Tanzania, approximately 35 km west of AngloGold Ashanti’s world class Geita mine (estimated pre-mining gold endowment of 23 Moz at 4g/t) and within a similar geological setting, prospective for Archaean age “greenstone” hosted gold mineralisation.
Since acquiring the Imweru project in 2013, Kibo Mining has carried out additional resource drilling in late 2013 leading to the publication of a new Mineral Resource statement of 16 485 000 t at 1.143 g/t (550 000 oz) in February 2104.
Following positive results from economic modelling, both in-house and by its consultants, Kibo Mining announced the commencement of a Definitive Feasibility Study (DFS) on the project in October 2014.
Since then it has completed a Preliminary Economic Assessment and commenced a Pre-Feasibility Study which together will comprise the first stage of the DFS.
[quote]The positive results from these studies to date have established the potential economic viability of Imweru to sustain a mine development over 7-10 years, potential to expand the current Mineral Resource and hence the Life of Mine for another six years and the potential for the discovery of additional satellite resources within the greater Imweru project block.
Lake Victoria Gold’s Imwelo gold project is located along strike and contiguous with Kibo Mining’s Imweru project. Imwelo effectively forms an extension of Kibo’s Imweru East Mineralised Zone and has a published JORC Mineral Resource of 205 200 oz at a grade of 2.3 g/t of which 90 800 oz is in the Measured and Indicated Categories.
Lake Victoria was granted a Mining Licence over the project licence in January 2015 which should enable mine development to progress rapidly. Taken together, Kibo Mining’s Imweru and Lake Victoria’s Imwelo mineral resource represent an amalgamated resource of approximately 755 200 oz at a grade of 1.5 g/t.
The proposed amalgamation of the two projects will provide significant synergistic benefits for the development of a gold mine both in regard to the enlarged resource and exploration potential of the combined projects and the particular competencies of Kibo Mining and Lake Victoria in exploration and mine development respectively.
The enlarged project is also expected to present an attractive investment opportunity in a period of renewed interest in the gold sector.
Given the current development status of the respective projects, it is the intention of the project sponsors to have the project in production, with a production target of 100 000 ozpa, within 24 to 30 months from the date of formal amalgamation.
Louis Coetzee, CEO of Kibo Mining says: “The past two years’ steady work on the Imweru DFS advanced the Imweru project to a level where we could come to an arrangement with Lake Victoria Gold, which will see the amalgamation of the respective projects on a like for like basis, to create a project with critical mass and a clear path to near-term production.”
“Amalgamation of the two projects will establish a project with a significant gold resource with the added strategic advantage of an existing mining right and the opportunity to pursue near-term production.”
“At a resource level we believe that the combined project can reach more than a 1 Moz resource. This view is based on the resource expansion potential identified in the latest Imweru competent persons report. According to this report the Imweru resource can be increased with a further 40% to 80% through an already defined 3rd phase exploration programme.”