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.

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.