(Alliance News) - Katoro Gold PLC on Friday reaffirmed its belief a deal will be reached to sell its two gold projects in Tanzania.
Katoro has the Imweru and Lubando exploration sites in the north of the country. In August, a term sheet was signed with Lake Victoria Goldfields Ltd which would see LVG pay up to USD1.0 million in cash and a 1.5% net smelter royalty for the projects.
Since then, LVG has received extensions to complete the deal, but in November Katoro decided not to extend the exclusivity agreement.
Katoro on Friday said "good" progress has been made with LVG, and is hopeful a deal can be reached. It did, however, stress there is no guarantee.
If an agreement is reached between Katoro and LVG, it would require approval from Katoro's shareholders. Power Metal Resources PLC, an AIM resource company with a 5.6% stake in Katoro, noted Katoro's statement on Friday.
Elsewhere, Katoro also owns the Haneti polymetallic project in the centre of Tanzania. The project potentially holds nickel, platinum group metals, copper, gold, lithium, and rare earth metals.
Katoro is currently planning drilling at Haneti, but is exploring funding options to allow this.
"The recent feedback received at the Mining Indaba conference in Cape Town, South Africa in early February included considerable interest in large-scale nickel exploration projects from mid-tier and tier one mining companies and demonstrated to the board the strategic value of Haneti," said Katoro.
Katoro was 0.3% lower on Friday morning in London at 3.44 pence a share. Power Metal Resources was 3.3% higher at 0.39p.
At the end of January, Katoro announced a new joint venture with South Africa's Blyvoor Gold which will see them process tailings from six dams, giving Katoro the chance for near-term revenue.
By George Collard; georgecollard@alliancenews.com
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Katoro Gold (KAT)