Gold Miner Reaches Key Construction Milestone for Tanzania Project

1. Lake Victoria Gold Ltd. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$3,000 and US$6,000.
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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) announced it had appointed an Engineering, Procurement, and Construction Management (EPCM) contractor for its fully permitted Imwelo Gold Project in Tanzania, according to a July 2 release.

Lake Victoria's wholly owned subsidiary, Tembo Gold Ltd., which holds the mining license ML 538/2015 for the project, made the appointment in collaboration with Sutton Consulting International Ltd., which will serve as the international technical support partner, the release said.

This strategic appointment was approved by the Mining Commission on June 29 and aligns with Tanzania's Mining (Local Content) Regulations of 2018. This approval marks a pivotal moment for LVG as it propels the Imwelo Project into the final stages of engineering, procurement planning, and construction preparation under a unified Tanzanian-led project delivery framework.

"This is a key milestone in preparing Imwelo for construction," President and Chief Executive Officer Marc Cernovitch said. "With Mining Commission approval received and our EPCM structure now formalized, we have moved another important step closer to building one of Tanzania's next new gold mines. Equally important, we are advancing Imwelo the right way. Tanzania has a clear regulatory framework for local content and mining project development, and we believe long-term success in the country requires working constructively with the Mining Commission, respecting that framework, and ensuring Tanzanian companies and professionals play a meaningful role in project execution. CECL (City Engineering) and Sutton give us the right platform to do that."

He continued, "CECL brings Tanzanian leadership, local engineering capability, and in-country execution capacity, while Sutton adds specialist international technical support and African mine-development experience. Together, they provide the structure we need to move final engineering, procurement planning, and construction preparation forward in a disciplined and compliant manner."

Key aspects of the partnership include CECL taking on the role of primary EPCM contractor and commercial lead, thereby providing local project leadership, engineering capabilities, and in-country construction management support, Lake Victoria said. Sutton, on the other hand, will contribute its expertise as an international technical-support partner by offering specialist engineering reviews, experience in African mine development, and additional technical support to the EPCM mandate.

The integrated EPCM mandate is set to oversee and coordinate a range of critical activities, including final detailed engineering, procurement planning, infrastructure design, mine planning support, construction preparation, and overall project management, the release noted. Significant progress is being made in various development workstreams such as the design of tailings and water infrastructure, geotechnical and hydrogeological studies, process plant optimization, procurement support, and construction quality assurance.

Concurrently, project advancement is proceeding alongside financing activities, the company said. This includes the previously announced gold loan facility term sheet with Monetary Metals & Co., which could provide up to approximately US$25 million, though this is still subject to meeting certain conditions and obtaining the necessary regulatory approvals.

Details of Partnership

The EPCM model integrates robust Tanzanian engineering and environmental capabilities with international technical expertise, LVG said. CECL, a 100% Tanzanian-owned company, leads the project delivery. CECL is registered with Tanzania's National Environment Management Council, Engineers Registration Board, and the Department of Water Resources, and brings a wealth of local expertise in areas such as geotechnical investigation, environmental impact assessments, and water treatment design.

Partnering with CECL is Sutton, a multi-disciplinary mining and engineering consultancy that is part of the Sutton Global Group, which contributes its extensive experience in gold and multi-commodity projects across Africa, including expertise in process plant design, tailings storage facility engineering, and mine planning, LVG said.

The EPCM structure is designed not only to deliver engineering services but also to enhance local engineering capabilities, expand opportunities for Tanzanian professionals and suppliers, and facilitate substantial knowledge transfer. This approach aligns with Tanzania's Mining (Local Content) Regulations, which aim to ensure that the country's mineral resources contribute to broad-based national development by prioritizing Tanzanian ownership and skill development.

Lake Victoria Gold said it views local content as a crucial aspect of responsible mine development in Tanzania. The company's strategy is to support Tanzanian participation in project delivery while maintaining international technical standards through Sutton's specialist support. This model is seen as vital for the growth of Tanzania's mining services sector and the successful development of new mines in the country.

However, it is important to note that while the Imwelo project has undergone JORC-compliant Preliminary Economic Assessment (PEA) and Pre-Feasibility Studies (PFS), these studies are not current under NI 43-101 standards. The company has not completed a feasibility study to establish mineral reserves demonstrating economic and technical viability. Therefore, any decision to commence production involves increased uncertainty and a higher risk of economic and technical failure, including potential variations in grade and recovery, geotechnical or metallurgical challenges, cost overruns, and regulatory risks.

In financial developments, Lake Victoria successfully closed the third and final tranche of its non-brokered private placement of unsecured convertible debentures, raising gross proceeds of CA$331,000, with total proceeds from all tranches amounting to CA$4,165,200. The debentures, bearing interest at 5% per annum and maturing 36 months from issuance, are convertible into common shares at CA$0.30 per share.

The funds raised are earmarked for ongoing development activities at the Imwelo Gold Project, including engineering, mine planning, infrastructure preparation, and field programs, the company said. No finder's fees were paid in connection with this tranche, and the placement is subject to the final approval of the TSX Venture Exchange.

Sterilization Drill Program Completed

Lake Victoria recently achieved another crucial milestone in the development of Imwelo, as detailed in a June 23 update by Atrium Research Analyst Ben Pirie. The company successfully completed a sterilization drill program, confirming that the areas designated for the proposed process plant and accommodation/man-camp are devoid of significant gold mineralization. This confirmation allows construction to proceed without the risk of sterilizing valuable mineral resources, significantly de-risking the project as it nears the construction phase.

The sterilization drilling, which is a standard practice before construction, involved drilling 23 holes — 12 beneath the proposed process plant area and 11 beneath the proposed accommodation/man-camp area. The drilling results, which align with the regional total magnetic intensity survey, verified that the known mineralized trend is located south of the planned infrastructure. Additionally, the drilling identified a continuous 3- to 5-meter clay horizon across the plant area, providing essential geotechnical data for foundational and civil design purposes.

Lake Victoria also reported positive geotechnical results that support the final pit design at Area C, Pirie said. Furthermore, the company has successfully closed its convertible debenture financing in two tranches and has strengthened its in-country leadership team in Tanzania. These steps underscore the company's thorough preparation and strategic planning as it advances towards operational readiness.

Looking ahead, key catalysts for Lake Victoria include ongoing progress and drilling results from the Tembo Project with Barrick, and the anticipated commencement of construction at Imwelo in Q3/2026. 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.

Pirie expressed optimism about the company's prospects, noting, "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." He rated the stock a Buy with a CA$0.50 per share target price.

In a separate note dated April 2, Red Cloud's Alina Islam commented on the agreement with Monetary Metals, describing it as another significant milestone for the company that provides Lake Victoria with a credible, largely non-dilutive funding pathway to advance Imwelo towards development. The gold loan, denominated and repayable in up to 6,000 ounces of gold, carries a 15% annual interest rate on a multiyear term and is expected to close within 60-90 days, pending due diligence and regulatory approvals.

The Catalyst: Jobs Numbers Spur Gold Rally

Spot gold and silver prices saw significant increases following the release of the June employment report on Thursday, which came in weaker than expected, Kitco News reported on July 2. This report led to a decrease in the U.S. dollar's value and tempered expectations for near-term tightening by the Federal Reserve. At the time of reporting, spot gold was trading around US$4,123.80 an ounce, marking a 2.28% increase, while spot silver reached approximately US$61.052, up by 3.27%.

The employment data for June indicated a softer stance from the Federal Reserve might be on the horizon. Nonfarm payrolls increased by only 57,000 in June, falling short of the anticipated 115,000, while the unemployment rate dropped to 4.2%. Additionally, payroll figures for April and May were revised down by a total of 74,000.

Although the data suggested weaker economic activity, which typically would lower the dollar and reduce Treasury yields, the still-low unemployment rate implies ongoing economic resilience, preventing a swift policy shift by the Fed, the Kitco piece said. Consequently, discussions about further rate hikes are now being deferred, with market expectations shifting from October to December.

The situation in the Strait of Hormuz remains tense and uncertain. Despite daily traffic stabilizing at about 40 vessels per day over the past week, there is ongoing ambiguity regarding the authority to manage the strait's traffic. Iran insists on its right to control the passage, while U.S. forces maintain that no nation has the authority to close or regulate the waterway.

Market participants are also closely monitoring the early closures of U.S. cash markets due to the upcoming July 4 holiday and are preparing for the next inflation data release scheduled for July 14, the Kitco report noted. The reduced liquidity over the holiday period could lead to more pronounced fluctuations in the dollar, Treasury yields, and precious metal prices.

Deutsche Bank analysts have noted a "hawkish repricing" in Federal Reserve expectations recently, with investors now anticipating that the Fed might increase interest rates as early as September, as indicated by the CME's FedWatch tool, according to a report by Jaiveer Shekhawat for Investing.com on July 2. Generally, higher interest rates are used to control inflation, but they carry the risk of negatively impacting the labor market and broader economic growth.

This week, however, the momentum towards a hawkish stance softened somewhat. This change was influenced by a report — considered less comprehensive than the Non-Farm Payrolls (NFP) data — indicating that private sector payrolls in June grew less than expected, Shekhawat wrote. Additionally, comments on Wednesday from the new Fed Chair, Kevin Warsh, suggested that inflation risks in the U.S. might be diminishing, sparking speculation that the Fed might delay rate hikes, possibly not raising rates as early as this month.

The direction of interest rates is particularly significant for gold, as it affects the opportunity cost of holding the non-yielding asset. Concurrently, the U.S. dollar index saw a slight decline, but the prospect of a more hawkish Fed trajectory has maintained the currency's strength above its pre-conflict levels. A stronger dollar generally has a negative impact on gold prices, as it increases the cost for international buyers.

Neil Welsh, Head of Metals at Britannia Global Markets, commented on the situation, noting, "The firmer currency backdrop [...] is prompting investors to reassess positioning after a volatile few weeks."

Ownership and Share Structure¹

Lake Victoria Gold Ltd. has a market cap of CA$51.89 million, with 199.58 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.