Katoro Gold has agreed to terms with Lake Victoria Gold (LVG) for the proposed disposal of 100% of its fully owned subsidiary Reef Miners for $1m and a 1.5% net smelter royalty (NSR).

Reef Miners is the owner of the Imweru gold project and the Lubando gold project in northern Tanzania.

Together, the projects have a combined JORC compliant resource of 754,980 ounces of gold.

The proposed disposal reflects Katoro’s strategy to develop a portfolio of assets focused on the battery metals sector.

The recent acquisition of the Haneti nickel project by the company lured significant interest from investors.

Katoro has been involved in the evaluation of further opportunities to capitalise on the battery metal demand fundamentals while increasing its shareholders’ value.

Katoro Gold executive chairman Louis Coetzee said: “We remain confident in the significant potential value of Imweru and believe that LVG is well positioned to develop the project so that this potential can be fully realised.

“To this end, the optionality within the term sheet enables us to have the ability to retrieve equity in the project by retaining the option to, at our sole discretion, accept LVG shares in lieu of cash for payments subsequent to an initial $50,000 payment, as well as retaining a 1.5% NSR.

“It also releases our resources so that we can focus on our highly prospective nickel, platinum-group-elements and lithium asset, Haneti, as well as exploring other value-driving opportunities.”

In June, Katoro provided an update on its 75%-owned Haneti nickel project in Tanzania. According to the company, indications show Haneti could host a chonolith type nickel sulphide deposit after review and analysis of historic work.