Sign up Australia
Proactive Investors - Run By Investors For Investors

Kavango’s Kalahari Suture Zone project bears striking similarities to giant Norilsk deposits in Russia

Kavango Resources is going big game hunting in Southern Botswana
Kavango’s Kalahari Suture Zone project bears striking similarities to giant Norilsk deposits in Russia
Prospecting in Botswana

It’ll be an interesting test of how much strength in depth there is in the current market for grassroots exploration when Kavango Resources PLC lists in a few weeks.

Earlier in the year, Cora Gold Limited (LON:CORA) and Group Eleven Resources Ltd (CVE:ZNG) got listings away fairly well with their own exploration portfolios, respectfully in West Africa and Ireland.

WATCH: Kavango Resources to list in London and advance flagship project in Botswana

And in February, Kavango itself built a book to the tune of around £1.6mln. The plan now is to revisit that book and boost it to around £2mln by selling shares at 6p each. Post financing, that would give Kavango a ballpark market capitalisation of around £6mln when it debuts with a standard listing in June.

And it may well be that Kavango turns out to be the biggest grassroots opportunity of the year so far, if chief executive Mike Foster’s assessment of the company’s prospects is anything to go by.

Seasoned investors will know that Foster’s opinion is one to be reckoned with in the mining industry. He has a long track record of success dating back at least to his time as one of the prime movers at Reunion Mining, which sold out to Anglo American for a substantial profit in the late 1990s.

He was subsequently with ZincOx, but cashed out 10 years ago before all the trouble there started, and has since done a couple of private deals, including the sale of Copperbelt Minerals for US$197mln and vending the two million ounce Misisi gold project in the Congo into Arc Minerals (LON:ARCM).

So, when he compares Kavanga’s Kalahari Suture Zone with Norilsk, one of the greatest paladium and base metals complexes in the world, it’s worth taking notice.

The caveat is that it’s very early days, but the signs are there.

The Kalahari Suture Zone covers around 7,000 square kilometres of ground in the south west of Botswana and was first looked over in the 1970s, when the government sponsored an aerial survey. A Canadian aid agency financed some drilling work in the 1980s, and it’s this core which has set Kavango off on its big game hunt.

This core isn’t mineralised in itself, but it is of the same age and composition as the rocks in and around Norilsk, and that’s an intriguing enough proposition in itself to set the exploration process going.

To identify mineralised massive sulphide target

Kavango has always taken the view that the biggest outcropping and near-surface deposits in Botswana have now gone. But Kalahari Suture sits beneath between 20 metres and 80 metres of overburden, which is one reason why no-one’s looked seriously over the ground until now.

The other reason is that the ground in question is actually extremely extensive. The Canadian aid agency drilled seven holes, but across a tract of land that Foster equates as being the distance between London and Edinburgh.

It’s quite a lot to digest.

But with £2mln in the bank, Kavango reckons it will be able to have a good stab at getting to grips with the full potential. The money will be spent on more aerial surveys, follow-up work, and then drilling on the most attractive areas.

“The intention,” says Foster, “is to identify a mineralised massive sulphide target.”

As an indication of what’s at stake here, it’s worth noting that Kavango has already received preliminary interest in the Kalahari Suture Zone project from some big name potential partners.

The company is already partnered with Rio Tinto on another project in northern Botswana, so there is clearly an appetite to do deals.

But as far as Kalahari Suture Zone is concerned, Foster reckons it’s too early.

“We’ll try and add value first,” he says.

Helping him do that is a team of excellent geologists, including former Reunion men Mike Moles and Hillary Gumbo, the founders of Kavango Minerals in Botswana some five years ago, spending their own funds on exploration and licence acquisitions since then, and experienced city men like Douglas Wright and Chuck Forrest.

These directors and managers are also key investors, and will continue to be a significant presence on the register once the company is listed. Their motivation will thus be in equity rather than salary, which makes a lot of sense if the company does indeed uncover the next Norilsk project.

View full KAV profile View Profile

Kavango Resources PLC Timeline

Related Articles

July 23 2018
Savannah Resources has a broad portfolio of assets, including some highly attractive lithium
Signpost saying Nevada
March 28 2018
The near-term transition of the Eureka Gold Project to a cash-generating asset will be a major milestone for Tyranna.
KSZ holds potential for world class base and precious metals deposits

No investment advice

The information on this Site is of a general nature only. It does not take your specific needs or circumstances into consideration, so you should look at your own financial position, objectives and requirements and seek financial advice before making any financial decisions. You acknowledge and understand that neither the Company, its related bodies corporate, the information providers or their affiliates will advise you personally about the nature, potential value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter. You should read our FSG and any other relevant disclosure documents and if necessary seek persona advice prior to making any investment decision.

You understand and agree that no Content (as defined below) published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person.

You understand that in certain circumstances the Company, its related bodies corporate, the information providers or their affiliates may have received, or be entitled to receive, financial or other consideration in connection with promoting, and providing information about, certain entities on the Site and in communications otherwise provided to you.

You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate. From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

Before you act on any general advice we provide, please consider whether it is appropriate for your personal circumstances.

© Proactive Investors 2018

Proactive Investors Australia PTY LTD ACN:132787654 ABN:19132787654.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use