en.Wedoany.com Reported - Lake Victoria Gold Ltd. announced on May 11 that it has completed the first tranche of its non-brokered private placement announced in April, raising CA$3,534,200 through the issuance of unsecured convertible debentures. The company plans to conduct subsequent tranches, bringing the total amount raised to approximately CA$3.8 million.
CEO Marc Cernovitch stated: "This financing provides additional flexibility as we continue to advance the Imwelo project towards development. We are pleased to see continued support from existing long-term shareholders and strategic investors as we execute critical engineering, financing, and operational workflows. With Imwelo fully permitted and development activities continuing to advance, we believe the company remains well-positioned for the next stage of growth."
The terms of these debentures include a 5% annual interest rate, payable semi-annually, maturing in 36 months. The debentures are unsecured, rank equally with all other unsecured indebtedness, and are subordinated to any secured debt. Holders may convert into common shares at a conversion price of CA$0.30 per share prior to maturity. In addition, investors received warrants to purchase up to 5,890,324 common shares at a price of CA$0.40 per share, exercisable over 36 months.
Funds will be used to advance engineering, mine planning, and development of the Imwelo gold project, as well as to support operations at the Tembo project and for other corporate purposes. All securities are subject to a statutory hold period of four months and one day, and remain subject to final approval from the TSX Venture Exchange.
The company also plans to issue 83,960 common shares at CA$0.31 per share to settle CA$26,027.51 in interest due on debentures issued in July and August 2024. Three insiders participated in the 2024 debenture financing, contributing a total of CA$112,000, and these interest shares will also be subject to a four-month hold period.
Regarding project progress, the company has mobilized a drill rig to the Imwelo gold project site to conduct a sterilization drilling program announced on May 6. The program is expected to last approximately 21 days, involving about 1,050 meters of reverse circulation drilling, targeting designated areas for the plant, accommodation, and support facilities to confirm that infrastructure will not interfere with potential mineralized zones. The drilling plan includes approximately 500 meters in the plant site area and 550 meters in the accommodation and warehousing area, to a depth of about 50 meters, and will also test magnetic anomalies in northwest and east-west directions.
Cernovitch stated: "Mobilizing the drill rig to site marks another important step as we advance Imwelo towards development and construction. This program is focused on de-risking the project at the infrastructure level, ensuring critical facilities are optimally positioned prior to construction." It is expected to provide key data for finalizing site layout and engineering design.
Atrium analyst Ben Pirie noted in a May 6 analysis that sterilization drilling is a standard pre-construction step, and its results will directly influence the final site layout, engineering design, and development sequence. LVG also plans to complete pre-construction activities such as final pit design, mine planning, geotechnical work, and road preparation.
Financially, LVG recently increased the size of its convertible debenture financing from CA$3 million to CA$3.8 million, with the conversion price adjusted to CA$0.30 per share. The company also announced a US$25 million gold loan facility from Monetary Metals and exercised mandatory conversion rights on its 2024 debentures, converting the remaining CA$217,000 into shares at CA$0.18 per share.
Gold prices have recently been influenced by positive developments in the Middle East conflict and changes in Indian import regulations. Heraeus analysts noted on May 11 that de-escalation talks between Iran and the US drove gold prices up by 2.7%. Indian banks have been unable to import gold since April 1 due to a delay by the Ministry of Trade in releasing the list of authorized banks.
The Imwelo project is located in Tanzania, is fully permitted for construction, situated 12 kilometers from AngloGold Ashanti's Geita mine, and holds a 10-year mining license. Regarding resources, gold recovery rates using standard gravity + CIL processing are as high as 97%. In terms of ownership, management and insiders hold approximately 28%, institutions hold 15%, and strategic corporate investors hold 23%, including Barrick Mining Corp. and TAIFA Group. Major shareholders include AIMS Asset Management (9.5%), Rostam Aziz (8.02%), Simon Charles Benstead (7.21%), Concept Capital Management Ltd. (5.71%), and Walter David Scott (3.01%). The company has a market capitalization of approximately CA$60.85 million, with approximately 199.5 million shares outstanding.
Atrium analyst Pirie reiterated a "Buy" rating on LVG with a target price of CA$0.50, and stated that LVG's upcoming catalysts include drill results from the Tembo project and the expected commencement of construction at Imwelo between Q2 and Q3 2026.
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