Lake Victoria’s Tembo holds 600K oz. gold near Barrick

An initial resource for Lake Victoria Gold’s (TSXV: LVG) Tembo project in Tanzania shows the deposit contains almost 600,000 oz. gold next to Barrick Mining’s (TSX: ABX; NYSE: B) Bulyanhulu mine. The stock soared.

Tembo hosts 2.69 million indicated tonnes grading 1.16 grams gold per tonne for contained metal of 99,700 oz. gold, plus 13.33 million inferred tonnes grading 1.12 grams gold for 480,100 oz. of contained metal, Lake Victoria said Tuesday in a statement.

The estimate covers three near-surface deposits, Ngula 1, Nyakagwe Village and Nyakagwe East. All three sit within conceptual pit shells and remain open along strike and at depth. Tembo is located about 600 km north-northwest of Tanzania’s capital, Dodoma.

Along with Imwelo, Tembo is one of two key projects that Lake Victoria Gold is advancing in Tanzania. Imwelo, which is shovel-ready and sits west of AngloGold Ashanti’s (NYSE: AU) Geita mine, holds a resource of about 300,000 oz. gold that should yield average grades of 3.7 grams gold per tonne during the first two years of mining, CEO Mark Cernovitch told The Northern Miner in December.

Major shift

Tuesday’s announcement “marks a major shift for Lake Victoria Gold and the Tembo project as it moves from a relatively stagnant project — waiting for Barrick to explore the surrounding licences to trigger contingent payments — to an active development project with an up-to-date resource and potential toll milling opportunities in the near future,” Atrium Research mining analyst Ben Pirie said in a note.

Tembo “will be a key piece in Lake Victoria Gold achieving its goals of becoming a multi-asset small-scale gold producer in Tanzania. With the successful advancement of both Imwelo and Tembo, Lake Victoria Gold is on a path for significant value creation through gold production and cash flows,” Pirie added.

Lake Victoria Gold hasn’t completed a feasibility study on Imwelo.

Shares of Lake Victoria Gold rose 11% to 31¢ Tuesday morning in Toronto, valuing the company at about $63 million (US$45 million). The stock has traded between 16¢ and 36¢ in the past year.

Drilling campaign

Using a 1-gram gold per tonne cut-off, Tembo holds 1.07 million indicated tonnes grading 2 grams gold containing 68,600 oz. gold, Lake Victoria Gold said. On that basis, it also holds 4.79 million inferred tonnes of 2.15 grams gold containing 331,700 oz. gold.

Ngula 1, which extends for about 600 metres along strike, hosts about 56% of Tembo’s inferred ounces and 63% of its indicated ounces. It will be the initial focus of a planned 5,000-metre close-spaced drilling campaign. To date, the deposit has been drilled to depths of about 200 metres.

In parallel, Lake Victoria Gold is continuing to advance a previously announced toll-milling agreement with privately held Nyati Resources for a 500-tonne-per-day plant that sits on a Tembo license next to Bulyanhulu.

High-grade core

Tembo’s higher-grade core “reflects the potential for Lake Victoria to boost cash flows in the early years of production to fund expansion and other possible initiatives,” Pirie said.

“The combination of the higher-grade core at Ngula 1 plus adjacent third-party processing is a route to potentially producing gold from Tembo in the near term, laying a second asset on top of Imwelo and materially de-risking the broader story as Imwelo itself moves toward first gold in 2027,” he added.

Tembo covers 34 sq. km across four granted mining licences within the Sukumaland greenstone belt. The project has a substantial exploration history, with more than 50,000 metres of drilling completed. A 2020 integrated study identified 39 exploration targets across the property.