LONDON, UK: Katoro Gold Plc (AIM: KAT), the gold and nickel exploration and development company, has entered into a Joint Venture Agreement with Lake Victoria Gold (LVG) for the development of the Company’s Imweru Gold Project (‘Project’). Under the Agreement, LVG will earn up to 80% in the Project, with the balance of 20% being held by Katoro as a carried interest.
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 Joint Venture instead (“the JV”).
Katoro CEO, Louis Coetzee, commented: “The decision to cancel the sale of the Project and to enter into a Joint Venture 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.”