Kavango Resources (LSE:KAV) and Power Metal Resources (LSE:POW) were on the rise on Monday morning after unveiling a new joint venture (“JV”) to explore for large-scale mineral deposits in Botswana.

Kavango has transferred four licenses into the new equally-owned and operated company covering 2,680km2 of ground in the country’s highly-prospective Kalahari Copper Belt (“KCB”)

Two of these licenses make up the “Ditau project”, which contains ten “ring structures” where Kavango has been exploring for large quantities of rare earth mineralization.

The other two are earlier-stage copper prospecting opportunities found directly to the southwest of Sandfire Resources’ TS and A4 Dome copper-silver discoveries.

Power Metal has paid Kavango £75,000 in cash to set up the JV. It has also issued it with 6 million POW shares at 1.25p each along with 5 million two-year, 2p warrants.

Critically, the company has also committed to spending $150,000 on exploration over two consecutive years.

This immediately provides the new JV with the financial firepower needed to begin the next phases of fieldwork at across Ditau and its prospecting licenses. Power Metal said planned work includes detailed regional soil geochemistry and a ground magnetic survey to firm up the position of drill targets.

Kavango and Power Metal may also purchase additional prospecting licenses to build on the JV’s strong Botswana positioning.

As announced in April this year, Kavango had originally entered a provisional agreement to sell 51% of the Ditau project licenses to Power Metal.  However, the companies said on Monday that work has since shown that forming a JV presented a much larger opportunity for both.

As Power Metal chief executive Paul Johnson put it:

“We are keen to develop more insight into the potential of the Ditau Camp project, and this can only be achieved through proactive ground exploration, which we intend to undertake with our JV partners. 

“Moreover, the addition of two key Kalahari Copper Belt licences brings the Company into a highly prospective copper territory which, as I have personally experienced, has the potential to deliver considerable discoveries.  Again, ground exploration is key, and we intend to be proactive.”

Critically, the shared development of the JV licenses also allows Kavango to ramp up efforts at its primary project, the Kalahari Suture Zone (“KSZ”).

The explorer’s licenses cover a large portion of this 450km magnetic anomaly, which is entirely covered by desert sand and has never before been explored using modern mining techniques.

Over the summer, Kavango has made strong progress in its search for deposits along its KSZ licenses known as “sulphide ore bodies” that are rich with copper, nickel, and platinum group metals (“PGMs”). It is currently in the final stages of analysing a northern section of the geological structure called “Hukuntsi”.

Here, it has identified numerous large targets that present “Norilsk-style potential”. Based in Siberia, Norilsk is one of the most important mining centres in the world. It accounts for 90% of Russia’s nickel reserves, 55% of its copper, and virtually all of its PGMs.

Kavango has identified several magma plumbing systems across its KSZ licenses that are critical features of the enormous magmatic sulphide deposits responsible for Norilsk’s extensive mineralisation. To better understand these large regional structures, Kavango is now preparing to launch a maiden drilling programme.

With such a large planned operational commitment, the board of Kavango felt the Company would benefit from introducing a new development partner to two licences on the KCB, and at Ditau,” said Kavango.

Each of these projects holds significant potential for discovery of substantial mineral deposits. Power Metals is an ambitious exploration company that has assembled a portfolio of global exploration interests. It is the ideal partner to work with Kavango's technical team.”

The new JV is currently held privately by Power Metal and Kavango. However, it has been incorporated for a future public listing, expected either a Canadian or British stock exchange.

As at writing, Kavango was trading 3.5% higher at 2.5p while Power Metal was sitting at 1.15p.


Author: Daniel Flynn

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