Lake Victoria Gold, Tanzania reach free carry deal

Executive Summary

• Lake Victoria Gold’s Tanzanian subsidiary reached an agreement in principle with the Government of Tanzania on the statutory free‑carried interest framework for the Imwelo gold project.
• The agreement clears a major regulatory hurdle, allowing the company to move forward with establishing a joint‑venture company (JVCo) to hold and operate the Imwelo licence.
• The milestone is presented as a transformative development that de‑risks the project and positions Lake Victoria Gold for near‑term construction and cash‑flow generation.

Key Details

• Meeting: Held on 10 Sept 2025 in Arusha, Tanzania; attended by CEO Marc Cernovitch, legal counsel (Velma Law), financial advisers (Crowe), and the Ministry of Minerals negotiation team.
• Statutory Framework: Tanzanian Mining Act (Cap. 123) and Mining (State Participation) Regulations, 2022 require a minimum 16 % non‑dilutable free carried interest for the government in all gold projects.
• Fiscal Regime Highlights:
• 6 % royalty on gold production plus 1 % export levy.
• Reduced 4 % royalty when minerals are refined within Tanzania.
• Requirement that 20 % of production be refined and sold domestically, with the Bank of Tanzania purchasing this portion at market prices.
• Joint‑Venture Structure: A new JVCo will be created to own and operate the Imwelo licence; its governance will be defined by a framework agreement and shareholders’ agreement between Lake Victoria Gold and the Tanzanian government.
• Strategic Impact: Company now has a clear path to construction and production, with financing already closed (as noted by Executive Chairman Simon Benstead). The agreement is expected to substantially de‑risk the project and support near‑term cash‑flow generation.
• Next Steps: Final approval by higher levels of Tanzanian government; negotiation of detailed terms; execution of a binding agreement, after which final terms will be disclosed.

Notable Quotes

“Reaching agreement in principle with the Ministry of Minerals marks an important milestone for Lake Victoria Gold and for Tanzania… This first step lays the groundwork for a constructive partnership through the new joint venture company.” – Marc Cernovitch, President & CEO

“This agreement in principle is a transformative development… With the recent closing of our financing, the company is well positioned to advance the Imwelo project toward construction and production.” – Simon Benstead, Executive Chairman