Overview

On August 10, 2023, Tembo announced that it has entered into a Licences Purchase Agreement dated August 9th, 2023 (the “Agreement“) with Lake Victoria Gold Ltd. (“LVG“), a private Australian company, pursuant to which the Company will acquire (the “Acquisition“), indirectly through its wholly-owned subsidiary Tembo Gold Tanzania Limited, LVG’s Imwelo Gold Project (the “Project“) in Tanzania.

The Project is a gold project located in northern Tanzania immediately to the west of Geita Gold Mine of Anglogold Ashanti. The Project is held by LVG’s Tanzanian subsidiary, Tanzoz Mineral Limited. An updated pre-feasibility study (“PFS“) was completed in 2021 by Measured Group Pty Ltd of Australia, incorporating mine design, mine planning, scheduling, reserve estimation and costing. The Project is held under a Tanzanian mining licence ML538/2015 and includes a primary mining licence PML2637, over which LVG has a right to acquire through a purchase agreement. The ML is 3.85km² and the PML is 8.5021ha. The Project is subject to a 2% royalty to a previous owner.

The ML is permitted for mine construction and production to commence.

The Project resource comprises seven mineralized locations that have been drilled and includes 42,000oz Au measured mineral resources at 3.15g/t, 95,700oz Au indicated mineral resources at 1.95g/t and 153,900oz inferred mineral resources at 1.53g/t for a total 291,600oz Au (the “Historical Resource Estimate“).

Terms of the Acquisition

Under the Agreement, Tembo will acquire the Project for consideration of C$5,500,000, consisting of approximately 23.6 million common shares of Tembo at a deemed value of C$0.22 per share, plus approximately USD$221,000 cash.

LVG will be required to hold the Tembo shares received as consideration for the Acquisition in escrow in accordance with the share release conditions outlined below:

• 1/3 of shares released from escrow upon Commercial Production (as defined in the Agreement) being achieved on the Project;
• 1/3 of shares (1/2 of remaining shares) released 6 months after Commercial Production; and
• 1/3 of shares (all remaining shares) released 12 months after Commercial Production.

If Commercial Production is not achieved within 3 years of closing, the escrow shares will be released to LVG. During the escrow period, Tembo (or its nominee) will retain voting rights over the escrowed shares.

Conditions to closing of the Acquisition include:

• satisfactory completion of due diligence by Tembo, acting reasonably;
• Tembo obtaining all necessary shareholder approvals to complete the Acquisition;
• Tembo and LVG obtaining all required regulatory approvals, including in respect of the Fair Competition Act (Tanzania) and the TSX Venture Exchange (“TSXV“) to proceed with the Acquisition;
• completion of the initial tranche of the Financings (see below);
• completion of a technical report on the Project and acceptance of the report by the TSXV; and
• other customary conditions precedent for a transaction of this nature.