(Alliance News) - Katoro Gold PLC shares jumped on Monday after the company said that it entered a joint venture agreement with Lake Victoria Gold Ltd for the development of the Imweru gold project.
Shares shot up 15% at 0.78 pence each on Monday in London.
The London-based metal exploration company announced the completion of the disposal of Imweru to LVG for USD1.0 million in June 2020.
However, the process to complete the sale and trigger ongoing milestone payments to Katoro was "indefinitely" delayed due to "unforeseen barriers" over the transfer of ownership at the project level.
As a result, the companies agreed to cancel the sale and to enter into a joint venture instead.
Katoro stated that it will have a 20% interest in the project, with Milton, Australia-based mining firm LVG owning the remaining 80%.
It continued that LVG will be responsible for all of the joint venture funding requirements. All debt funding for the partnership will also be procured or provided by LVG, it added.
In return, the joint venture will reimburse LVG for the previous expenditures in the amount of EUR792,000 on or before December 31, 2023.
"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 joint venture partnership with LVG," Chief Executive Louis Coetzee commented.
By Abby Amoakuh; abbyamoakuh@alliancenews.com
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Katoro Gold (KAT)