Gold Junior Secures Major Non-Dilutive Funding for Tanzania Gold Project

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1. Ownership and Share Structure Information

The information listed above was updated on the date this article was published and was compiled from information from the company and various other data providers.

Lake Victoria Gold Ltd. (LVG:TSX.V; LVGLF:OTCQB; E1K:FSE) provided an update on its previously announced gold loan facility with Monetary Metals & Co. in a June 25 release.

The company said it is actively progressing through the necessary regulatory approvals, registrations, and notifications in Tanzania, which are crucial steps towards the finalization and funding of this facility. Under the agreement made on April 1, 2026, LVG secured terms for a gold loan facility of up to 6,000 ounces of gold, valued at approximately US$25 million. This facility is designed to offer non-dilutive, project-level funding to support the company's fully permitted Imwelo Gold Project in Tanzania, which is operated through its wholly-owned subsidiary, Tembo Gold Ltd.

The facility is uniquely structured in gold ounces, with repayment also in gold ounces, aligning the financing instrument with the future production profile of the Imwelo project, the release said. This arrangement supports LVG's progression from engineering phases towards construction, development, and production readiness at Imwelo.

"Advancing the Tanzanian regulatory process for the Monetary Metals facility is an important and positive step for Lake Victoria Gold," Lake Victoria President, Chief Executive Officer, and Director Marc Cernovitch said. "This facility remains a central component of our non-dilutive funding strategy for Imwelo and reflects the type of disciplined, project-level capital structure we believe is appropriate for a near-term gold development project. We also believe this facility has broader significance for Tanzania, as it would represent one of the first structured gold-denominated project financing facilities of its kind in the country, demonstrating how gold-linked capital can support responsible mine development while preserving shareholder value."

Cernovitch said the company is "taking the right steps in the right order," by working through the Bank of Tanzania process, engaging with the relevant local authorities, and making sure the facility complies with Tanzanian law, LVG's development plan, and its obligations as a public company.

"Imwelo is fully permitted, our in-country team is being strengthened, and our focus remains on execution," Cernovitch said. "The Monetary Metals facility is intended to bring gold-linked capital to a gold project as we advance Imwelo toward construction and, ultimately, production."

Details of Facility

The Monetary Metals facility is strategically designed to provide Lake Victoria with significant funding for Imwelo during a pivotal phase of its development, the company said. By opting to structure the financing in gold ounces rather than through conventional equity, LVG aims to align the project financing closely with Imwelo's anticipated future gold production. This approach is intended to minimize shareholder dilution, ensuring that financing is directly correlated with the project's output.

However, the closure of this facility is contingent upon several conditions. These include obtaining necessary regulatory approvals, completing required registrations and notifications, finalizing definitive documentation, establishing implementation mechanics, and fulfilling other standard closing conditions.

Additionally, LVG has announced the issuance of shares for debenture interest following approval from the TSX Venture Exchange. Specifically, the company has issued 83,960 common shares at a price of CA$0.31 per share. This action is in accordance with the terms set out in the convertible debentures issued in July and August of 2024, totaling CA$750,000. The issuance of these shares fulfills the company's obligation to cover CA$26,027.51 of interest accrued up to the date the debentures were converted into common shares.

Analyst: Sterilization Drill Program Completed

Lake Victoria also recently announced the successful completion of a sterilization drill program at Imwelo that confirmed that the designated areas for the proposed process plant and accommodation/man-camp are free from significant gold mineralization, thereby allowing construction to proceed without the risk of sterilizing valuable mineral resources, according to an updated note on June 23 by Atrium Research Analyst Ben Pirie. The update marks a significant step in de-risking the project as it moves closer to the construction phase.

In recent developments since the last update, LVG reported positive geotechnical results that support the final pit design at Area C, Pirie said. Additionally, the company has successfully closed its convertible debenture financing in two tranches and has strengthened its in-country leadership team in Tanzania, steps that Pirie says underscore the company's robust preparation and strategic planning as it progresses towards operational readiness.

The sterilization drilling, a standard pre-construction practice, involved completing 23 holes, including 12 beneath the proposed process plant area and 11 beneath the proposed accommodation/man-camp area. The results, aligned with the regional total magnetic intensity survey, confirmed that the known mineralized trend is situated south of the planned infrastructure. The drilling also identified a continuous 3- to 5-meter clay horizon across the plant area, providing valuable geotechnical data for foundational and civil design purposes.

Looking ahead, key catalysts for LVG include ongoing progress and drilling results from the Tembo Project with Barrick, and the anticipated commencement of construction at Imwelo in Q3/2026, the analyst wrote. Additionally, a recent geotechnical review at Area C has provided crucial inputs for pit slope design, confirming strong rock conditions conducive to potentially steeper slopes, subject to detailed design. This geotechnical insight is being integrated into a revised pit design for Area C, alongside continuous resource modeling, mine planning, and engineering efforts.

"The company has plenty of exploration upside across the portfolio, with Imwelo offering mine-life extension potential and Tembo hosting multiple targets adjacent to Barrick's ... Bulyanhulu Mine," wrote the analyst, who rated the stock a Buy with a CA$0.50 per share target price.

In a research note on April 2, Red Cloud's Alina Islam commented on the agreement with Monetary Metals.

"In our opinion, this is a significant milestone that provides the company with a credible, largely non-dilutive funding pathway to advance Imwelo towards development," she wrote. Red Cloud does not have a rating or target on the stock. "The gold loan is denominated and repayable in up to 6,000 ounces Au (gold), carries a 15% annual interest rate on a multiyear term, and is expected to close within 60-90 days (subject to due diligence and regulatory approvals)." 

It's noteworthy that the historical 2021 Preliminary Feasibility Study (PFS) estimated initial capital costs at approximately US$15 million, which might be revised in the upcoming updated PFS around 2027, Islam noted.

"Imwelo is small but strategic," Islam noted. "At a steady state of 24,000 ounces Au/year, Imwelo would be a relatively small producer in Tanzania's Lake Victoria Goldfield. We suspect that down the road, cash flow from Imwelo would help fund and capture upside from the company's Tembo project, which shares geological similarities with Barrick's ... Bulyanhulu mine. While Tembo is early-stage, management is in the midst of completing advanced negotiations with Nyati Resources (Private) for potential toll milling opportunities at Nyati's 620tpd CIP plant, located on Lake Victoria's claims."

The note continued, "Advancing Imwelo towards a start-up to generate cash flow, and successful exploration at the Tembo project, should drive the stock price. Upcoming catalysts: 1) Imwelo MRE (2026), 2) Imwelo PFS (~2027), and 3) Tembo exploration results (ongoing)."

The Catalyst: Gold Is Down, But Not Out

Neils Christensen of Kitco News reported on June 24 that the U.S. dollar's robust performance and increasing bond yields are putting downward pressure on the precious metals market, causing gold prices to fall below US$4,000 per ounce, marking a new low for the year. Silver prices have also decreased, dipping below US$60 per ounce. Despite the bear-market correction from record highs in January, Ewa Manthey, a commodity analyst at ING, highlighted in her report that this sell-off reflects a market shift towards expectations of higher interest rates and tighter financial conditions.

The markets are currently reacting to the latest monetary policy meeting by the Federal Reserve. Although the Fed maintained the current interest rates, it signaled its inclination towards a rate hike within the year. Federal Reserve Chair Kevin Warsh stressed that price stability remains a primary concern. The markets are now anticipating a rate hike as early as September, with a possibility of another increase by December.

In light of these developments, Manthey noted that ING is adjusting its gold price forecasts downward for the latter half of the year, projecting an average of US$4,300 per ounce in the third quarter and US$4,600 in the fourth quarter, down from previous estimates of US$4,850 and US$5,000, respectively. Additionally, ING has revised its silver price forecasts, now expecting silver to average US$68 per ounce in the third quarter and US$74 in the fourth quarter, reduced from earlier projections of US$79 and US$84. Manthey explained that the silver market is expected to remain in deficit, but some key demand drivers, such as solar demand, are weakening, and ongoing thrifting and substitution in photovoltaic manufacturing are reducing the silver content per panel.

Conversely, Paul Williams, Managing Director at Solomon Global, offered a broader historical perspective in a discussion with Christensen also published by Kitco on June 24. He pointed out that the nearly 30% drop in gold prices from January's record highs is not unprecedented, citing significant corrections during the 1970s and the 2008 financial crisis, which were followed by strong recoveries and new highs.

Williams emphasized that the fundamental reasons for investing in gold have not changed significantly, despite the market's current focus on rising opportunity costs and potential Federal Reserve rate hikes. He reassured investors by noting that gold prices are still nearly 20% higher than they were a year ago, supported by factors such as central bank purchases, geopolitical uncertainties, and high sovereign debt levels.

Ownership and Share Structure¹

Lake Victoria Gold Ltd. has a market cap of CA$53.86 million, with 199.5 million shares outstanding. The company's 52-week range is CA$0.16-CA$0.36.

Institutions own 15% of shares, while Strategic Corporate Investors own 23%, Management and Insiders own 28% of shares, and the remaining 34% of shares are held by Retail.