Kibo Mining PLC (LON:KIBO) has signed an outline agreement with Lake Victoria Gold (LVG) to merge respectively their Imweru and Imwelo gold projects in northern Tanzania.
The deal would create a jointly owned property boasting a 755,300-ounce JORC resource, with the potential to take that figure to in excess of 1mln ounces of the yellow metal in a relatively short timeframe.
The plan is to be producing 50,000 ounces of gold a year within a year to 18 months of forming the new joint company, rising to 100,000 ounces in 24-30 months.
The assets are located in the Lake Victoria Goldfield, around 35km west of AngloGold Ashanti's world-class Geita Mine, which is host to 23mln ounces of the precious metal at a grade of 4 grams per tonne. The two projects are within a similar geological setting to Geita.
Key to sealing the memorandum of understanding with LVG has been the work carried out by Kibo on the definitive feasibility study for Imweru. This means the two assets can be merged on a “like-for-like basis”, said Louis Coetzee, the company’s chief executive
“Amalgamation of the two projects will establish a project with a significant gold resource with the added strategic advantage of an existing mining right and the opportunity to pursue near-term production,” he added.