Katoro Gold PLC, a gold and nickel exploration and development company, has announced that it has entered into a joint venture (JV) agreement with Lake Victoria Gold (LVG) for the development of the company's Imweru Gold Project. Under the JV agreement, LVG will earn up to 80% in the project, with the balance of 20% being held by Katoro as a carried interest.
The company previously announced that the project was disposed of by virtue of a sale transaction (see RNS of 12 June 2020). The administrative process to finalise registration of the sale transaction, and therefore trigger ongoing milestone payments due to Katoro, was subsequently indefinitely delayed due to unforeseen statutory barriers related to the transfer of ownership at project level. This created a situation where no definitive schedule date could be established for transfer of ownership and issue of the relevant milestone convertible loan notes. In light of this unsustainable situation, the company and LVG agreed to cancel the sale transaction and to enter into a JV agreement instead.
JV agreement highlights
- JV funding:
- LVG will earn a JV-interest of up to 80% in the JV and will be responsible for 100% of the JV funding requirements.
- All debt funding required by the JV will be procured or provided by LVG.
- The JV will reimburse Katoro for previous expenditures in the amount of €792 000 on or before 31 December 2023.
- Management: The JV shall appoint a project manager to manage the project.
- Cancellation agreement: The original agreement to dispose of the project will be cancelled by mutual consent of the parties.
- Appointment of directors: Three directors, two nominated by LVG and one by Katoro, will form the Board of the JV.
Katoro CEO, Louis Coetzee, commented: “The decision to cancel the sale of the project and to enter into a JV instead was a strategic decision by the Katoro Board to address challenges that made it impossible to complete the sale agreement within an acceptable time frame. We are looking forward to growing this JV-partnership with LVG, who is currently developing the Imwelo Gold Project. With Imwelo being located adjacent to Imweru and in advanced stage of development towards first production, we believe that the combination of the two projects will create a larger and significantly more economic project that will be able to attract suitable funding to accelerate the further development and exploitation of the combined gold mining project.”
Read the article online at: https://www.globalminingreview.com/exploration-development/09032022/katoro-gold-signs-joint-venture-agreement-with-lake-victoria-gold/