Since listing in London last July, Kavango Resources (LSE:KAV) has been making progress in its quest to locate magmatic, massive sulphide orebodies in Botswana. In particular, the company is focused on a 450km-long magnetic anomaly called the Kalahari Suture Zone (KSZ), where it hopes to discover deposits of copper, nickel, and platinum group elements.

Recent weeks have seen Kavango’s shares enjoy a considerable rally as a result of strong drilling results at its Ditau prospect and progress in its ongoing airborne electromagnetic survey over the KSZ. Here, co-founder and seasoned geologist Mike Moles answers key questions from MiningMaven and investors around the firm’s recent newsflow and its plans moving forward.

Q) Kavango has recently completed an airborne VTEM survey over the Kalahari Suture Zone (KSZ). Could you please explain the limitations of the first VTEM survey, which was completed in October 2018, and what improvements were made for the second survey in February 2019. What were you hoping to find with the second survey?

A) In most AEM surveys, electro-magnetic waves are generated by towed equipment. The lower the frequency of the EM waves, the deeper they penetrate into the ground. A receiver on the aircraft measures the time delay in getting these signals back, and this measures the “conductivity” of the underlying rock.

The Phase 1 VTEM survey was carried out at a frequency of 25Hz. The higher frequency EM signals (50Hz or 25Hz) are absorbed by conductive layers in the ground, which is OK if you are looking for water in aquifers down to 100m depth. However, it is not so good if you are looking for deeply buried sulphide deposits at over 250m beneath conductive Kalahari salt pans or Karoo shales and mudstones.

The average depth penetration of the 25Hz VTEM survey was only 169 metres, so we were only just beginning to see the upper parts of conductors that could be indicative of mineralisation at our target depths. This meant we had to visit all 26 of the conductors identified in the VTEM survey and run some fairly extensive (and expensive) ground geophysical surveys over all of them to determine their potential for hosting mineralisation.

In the past, the main problem with the lower frequency surveys was noise. This was mostly due to the vibrations caused by the helicopter, and particularly that associated with wind-shear. After the disappointing depth penetration of the VTEM system, we learnt that the Danish company SkyTEM were claiming to have solved the noise issues with a 12.5Hz frequency system. Further enquiries and endorsements by companies that had used the system convinced Kavango to see if this new system would be available for our Phase 2 survey.

The added depth penetration of the SkyTEM system has made a huge difference to what we can “see” below the surface. It is like being able to see the whole body rather than just the top of its head.

Q) When Kavango first came to market, part of its pitch was that it expected to be able to release initial results from airborne surveys speedily. The company was able to provide results of the first airborne VTEM survey, and the identification of 26 conductors, within a very short time of completion. Release of results from the second survey has taken much longer. Why has the company changed its approach?

A) For the Phase 2 (SkyTEM) survey, it was decided to use some very hi-tech data processing that was being pioneered by a geophysics consultancy based in Copenhagen. This processing results in a very detailed 3D model of the ground covered by the survey. Because this consultancy is “well ahead of the game” in this work, there is much demand for their services. Our survey data had to wait in the queue. However, the work has now been finished, and Kavango are now evaluating the results.

Q) In December 2018 the company announced it had identified significant drill targets, after follow up ground surveys of the conductors identified in the first phase airborne VTEM survey. Could you please describe the process that was followed in the ground surveys, what the company was looking for and whether the company is following the same approach after the second airborne VTEM survey.

A) The follow-up process for the Phase 1 AEM survey involved the selection of 26 conductors by Kavango’s geophysics team together with geophysicists from the contractor (Geotech Ltd). Each conductor was given a number and visited on the ground. If the conductor appeared to be shallow and was overlain by a visible clay pan, the target was rejected for further follow up. Further selection was based upon whether the conductor had a surface (soil) geochemical anomaly sitting over it. This reduced the targets to eight. All of these were then surveyed by ground based CSAMT surveying (which is a type of EM). Of these, three were selected as “Significant Conductor Targets”.

The drilling of these targets was delayed because it was decided to drill the conductors discovered at the Ditau Camp Prospect (PL169) first. By the time the drilling at Ditau had been completed, the Phase 2 AEM data had identified further targets for evaluation. Once the Phase 2 targets have been followed up and prioritised, a KSZ drilling programme will be announced. This may include targets from the Phase 1 AEM survey.

Q) The recent RNS suggests the initial results of the second drill hole at Ditau were better than the first. Could you please describe what Kavango has already encountered across the two holes at Ditau and what the board hopes to see in the forthcoming results of the assay tests?

A) My view is that they both tell the same story. The main difference is that the first hole was stopped due to bad ground before it intersected the intrusive body at depth. The second hole intersected a gabbroic intrusive at 478m and was continued into the gabbro for a further 79m.

The geological interpretation of what we have discovered in these holes is still far from clear, but it seems quite unusual. The magnetics suggests that the gabbro is 7km by 5km in size with an unknown thickness. Both the gabbro itself and the overlying Karoo sedimentary rocks are highly altered. The fact that the alteration products are very similar for both the gabbro and the sediments suggests that the gabbro is of Karoo age (or even post-Karoo). Not only are both rock types altered but they are also highly deformed, suggesting some local (or even regional) tectonic event. Indeed, it seems possible that it was this tectonic event that led to the alteration rather than the intrusion of a molten magma into the sediments, which rarely produces such a degree of alteration.

A magnetic image of the Kalahari Suture Zone, where Kavango is searching for massive sulphide orebodies 

Unfortunately, the portable XRF is not able to determine values for gold, silver, uranium, vanadium or PGEs. Of the Rare Earths, only Neodymium (Nd) and Praseodymium (Pr) can be detected. But the XRF does suggest that the alteration includes elevated arsenic, cobalt, copper, zinc and lead, as well as high levels of iron, potassium, calcium, titanium, barium, strontium and zirconium. Neodymium and Praseodymium run at around 0.2% for over 200m.

Kavango is obviously waiting with great interest to see what comes out of the assay results. Of particular interest will be values for Rare Earths, gold, uranium, copper and vanadium.

Q) Could you please explain the significance of the Karoo sediments and the roles they play in Kavango's model for the KSZ and Ditau. What is the company looking for there and what indicators is it hoping to find to prove its hypothesis of the presence of a Norilsk style deposit(s) in the region.

A) In most of southern Africa, the Karoo sediments were laid down “unconformably” on top of much older rocks of the Proterozoic Era. The sedimentary sequences began accumulating about 300 million years ago and this lasted for about 110 million years. In the KSZ area (including Ditau) the Karoo sediments are usually 200 to 300m thick and capped with up to 20m of much younger Kalahari sand.

Towards the end of the Karoo the old super-continent of Gondwana started to break up with South America drifting away from Africa. As it did so, deep seated faults appeared parallel to the main rift, or in some cases old fault lines re-opened allowing molten magma to intrude into the crustal rocks. It seems that the old KSZ discontinuity which had formally marked a very ancient craton edge was re-activated and formed a conduit for ascending magma. The magma was extruded onto the surface in the form of basaltic lavas. These lavas built up into thicknesses of several kilometres and covered most of southern Africa as well as parts of India, Antarctica and South America, which were then still part of Gondwana. Whilst most of the lavas have since eroded away, many of the magma chambers that fed the lava “fissures” remain as intrusive bodies buried within the Karoo sediments. It is these Karoo intrusive bodies that Kavango believes could be associated with metal bearing sulphide deposits. 

We know that a similar chain of events took place at Norilsk (Siberia). Here, very rich sulphide ore bodies have been found in association with the magma chambers (or feeders). As at Norilsk, many of the intrusive bodies along the KSZ were emplaced within coal measures or coaly shales, where the high sulphur content of the host rocks may have facilitated the development of massive sulphide ore deposits.

As a general model, Kavango would expect to find such sulphide mineralisation within the lower Karoo sediments at depths of between 100m and 300m. However, the KSZ represents a 450km long zone of deep-seated faulting, intruded by magmatic bodies along its entire length. It is thus highly prospective for the discovery of any model of mineralisation associated with continental break-up and volcanism. Due to the depth of cover, the area has been largely ignored by mineral exploration companies. Only now have the geophysical and geochemical techniques become available to look beneath this cover for the large ore deposits that are likely to reside there.

Q) What is a gabbro and what is its significance?

A) Intrusive rocks start their life as molten magma at the interface between the solid crust and the semi-liquid outer mantle. Granite intrusions are made from re-cycled (molten) crustal material that has been brought down towards the mantle by subduction. But mafic and ultra-mafic intrusives are composed mainly of mantle-derived material that undergoes some degree of differentiation as it rises through the crust towards the surface. Magma that extrudes onto the surface cools fast and produces rocks with small crystals, whilst magma that cools slowly within the crust produces intrusives with more coarsely gained minerals. Gabbro is one of the most common mafic intrusives and the coarse-grained equivalent of basalt (lava).

Mafic and ultra-mafic magmas contain small amounts of precious and base metals. As the magma cools, these metals tend to find sites within crystallising silicate minerals and as such are not found in concentrations rich enough to form economic deposits. However, in certain circumstances, the metals can combine with “free” sulphur to form an immiscible liquid. This can accumulate in various areas within the magma chamber to form massive sulphide deposits. The extra sulphur required for “sulphur saturation” can be introduced by the incorporation of coal measures into the magma chamber during its emplacement.

Further concentration of the sulphur-rich liquid can occur by being forced cracks in the surrounding “country” rock as pressure builds up in the chamber; or much later, by hydrothermal fluids dissolving the sulphides and re-depositing them in more concentrated form elsewhere either within or outside the magma chamber.

Q) Could you please explain what the "alteration halo" is and why it is Kavango's principal interest at Ditau, as described in the recent RNS.

A) When a magmatic body is intruded into the country rock, it is extremely hot. Any water in the surrounding rocks becomes super-heated and can start to change the chemistry of both the country rocks and the cooling magma itself. This alteration has the capacity to “dissolve” certain elements within the mineral assemblages and deposit them, in concentrated form, in places where the temperature or pressure or chemistry of the hot liquid promotes deposition. This alteration is sometimes termed “an alteration halo”. However, as has been said in answer to an earlier question, gabbroic intrusions of the size underlying the Ditau prospect do not normally produce alteration halos hundreds of metres thick.

The intense alteration lying above the intrusive at Ditau appears to be around 300m thick, which is unusual. Both the Karoo sediments and the gabbro itself are also highly deformed. Kavango is interested in the mineralisation in the Karoo sediments because they are closer to surface. Generally, the deeper the mineral deposit is from surface, the higher the value of the mineralisation needs to be to make mining economically viable. Until we get the assay results back from the laboratory, we will not know if the alteration above the gabbro hosts economic resources of valuable minerals.

This article marks the first in a series of quarterly Q&A sessions between MiningMaven and Kavango on the behalf of Kavango’s investors. If you have any questions you would like answered in the next piece then please feel free to contact MiningMaven at This email address is being protected from spambots. You need JavaScript enabled to view it.  or via our Twitter feed @theminingmaven. 

 

 

Shares in Asiamet (LSE:ARS) dropped 11.7pc to 4.7p on Friday following the release of series of updates for its BKM copper deposit in Central Kalimantan, Indonesia. Among the updates, Asiamet revealed that it has now completed a feasibility study on developing BKM using open pit mining and a solvent extraction-electrowinning copper heap leach.

The work gave the project an initial nine-year mine life producing up to 25,000ts of copper cathode per annum alongside initial capital expenditure of $192m. What’s more, the study highlighted additional value enhancement opportunities at the project with the potential to improve valuation by a minimum of $35 million on a risked weighted basis.

However, some investors were left underwhelmed by the study’s post-tax NPV(8) for the project of $133.5m and its 19.5pc internal rate of return. In comparison, a previous PEA for the project gave it an after tax NPV10 of $204m and an after rax IRR of 39pc, according to Asiamet’s website. What’s more, the study applied an economic assumption of a long-term copper price of $3.30/lb, a significant premium to where the metal is currently trading.

However, some would argue that this assumption reflects the belief of many that the red metal is entering an exciting phase moving forward that could make it a stand-out medium to long-term investment. As we covered in our recent ‘View from the City’ article on Asiamet, these forecasts are driven by an expected lack of supply as demand for copper increases from the electric vehicle and developing economies like China.

In a further update on Friday, Asiamet revealed a maiden ore reserve for BKM. This comprised 137k contained tonnes of copper in the proved category, 166k contained tonnes of copper in the probable category, and, in turn, 303k contained tonnes of copper in the proved and probable category. Finally, the firm also released an update copper resource for the asset that gave it total resources of 69.6Mt at 0.6pc copper for 451.9k of contained copper.

Regardless of investors’ reactions to the feasibility study, Asiamet said the results pave the way for it to enter detailed discussions with potential partners and financial institutions who have expressed an interest in BKM. Asiamet’s chief executive Peter Bird added that the project evaluation ‘greatly exceeds’ the company’s current £48.5m market cap. He said that limited value has also been ascribed to the other high potential project’s in the business’s portfolio, which include BKZ and the large Beutong project.

‘Completion of the BFS is a major milestone for Asiamet. We are very pleased with the outputs derived as they deliver a technically and financially robust project that can be significantly further improved through a number of clearly defined initiatives,’ he said.

‘The value enhancement initiatives together with the exceptional exploration upside identified proximal to the BKM project have the potential to extend mine life and provide a substantial uplift in overall project value. Evaluation of these items is next on the agenda with resultant outcomes to be considered and followed by the detailed engineering and design phase.’

‘Having successfully completed the Feasibility Study, we are now in a position to complete detailed discussions with potential partners and advance an array of debt and equity financing opportunities. We look forward to providing an update on these initiatives over the coming weeks and months.’

To read an analysis of Asiamet and its prospects from our sister site ValueTheMarkets in its recent ‘View from the City’ report, please click here.

Author: Daniel Flynn

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

The Author has not been paid to produce this piece by the company or companies mentioned above

Catalyst Information Services Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.

MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author.  News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

Guest article from https://valuethemarkets.com

Originally Published 20 May 2019

Indonesia-focused resources business Asiamet (LSE:ARS) has enjoyed a strong start to the year, with its shares rising from 4.2p to their current 6.4p. This gives the company a market cap of £59m. With one of its key copper assets approaching an investment decision and the development of its tier one Beutong project on the horizon, there is speculation in the City that Asiamet might be an attractive takeover target.

The view is that the prospectivity of Asiamet’s portfolio might place it far ahead of its peers in the event that the next copper bull-run forces major resource players to make a scramble for supply of the red metal. Here, we take a look at the company and the prospects it offers.

Continue reading by downloading our ‘View From The City’ PDF report…

CLICK HERE TO DOWNLOAD the full report from ValueTheMarkets.com

Horizonte Minerals (LSE:HZM) bounced 5.3pc to 1.8p on Tuesday after revealing that strong sampling results will allow it to push ahead with the development of its Vermelho nickel-cobalt project in Brazil.

The business said test work on samples of limonite ore from the project, which is based in the Carajas mining district, revealed a high-purity product containing 21.8pc cobalt. This exceeds the reference grade used for sulphate pricing. Meanwhile, the outfit said that nickel sulphate is produced as a solution ready for purification to a final battery-grade product.

When put together, Horizonte said these results confirm the suitability of the Pressure Acid Leach process and subsequent purification stages. This method was selected by the firm in its previous work at Vermelho and will be used to produce cobalt and nickel sulphate that can supply the electric vehicle (EV) battery markets.

As such, the positive test work results will be integrated into Horizonte’s ongoing pre-feasibility study at Vermelho. A study produced by the asset’s previous owner, Vale S.A., found that the project could produce 46k tonnes of nickel and 2.5k tonnes of cobalt per year.

Tuesday’s update follows test work earlier in the year that showed that Vermelho saprolite ore is also suitable for conventional processing. This can take place at the Rotary Kiln Electric Furnace that Horizonte is constructing at its nearby Araguaia ferronickel project.

Horizonte’s chief executive Jeremy Martin called Tuesday’s results a ‘major milestone’ for the organisation, adding:

‘The Vermelho project is a value driver for the Company, it is a high-grade scalable resource, with good infrastructure and has the potential to be fast-tracked to development. The successful completion of this sulphate test work confirms that the selected process flow sheet is suitable to treat the Vermelho ore and when combined with the earlier successful RKEF test work demonstrates that alternate process routes exist for the project.  The data from the test programmes will be incorporated into the Vermelho Pre-feasibility Study, for release in early H2, with the objective of demonstrating a robust set of economics for the project.’

Martin also highlighted robust conditions in the EV market, which are leading miners and battery manufacturers to accelerate efforts to seek out high-quality battery metal projects.

‘We see Vermelho as an attractive strategic asset with the ability to produce nickel sulphate and a non-conflict, ethical source of cobalt,’  he said.

Elsewhere, Martin said that Horizonte is continuing to advance project financing at Araguaia, with seven international banks showing interest in a project financing syndicate. He added that discussions are also underway with numerous groups around product marketing and offtake agreements.

A feasibility study last year gave Araguaia an initial 28-year mine life, a post-tax net present value (NPV) of $401m and an internal rate of return (IRR) of 20.1pc using a base case nickel price forecast of $14,000/t. Horizonte expects the project to produce an average of 14,500 tonnes of nickel a year, housed within 52,000 tonnes of ferronickel.  Against this, the asset has a capital cost estimate of $443m. This includes $65.3m of contingencies.

In Tuesday’s update, Martin once highlighted favourable macro conditions as a potential driver of third-party interest in the project: ‘The medium term consensus nickel price is around US$16,200/tonne which, based on the Feasibility Economics on Araguaia, deliver over US$2 billion of net cash flow over the life of mine at a C1 cash cost of around U$6,800/t nickel placing the project in the lower quartile of global laterite nickel operations and one of a very limited number of scalable, high grade, fully permitted, construction ready projects globally.

‘This robust demand picture for nickel positions Horizonte well, owning 100% of two Tier 1 nickel projects, within trucking distance of each other with the potential to produce 40,000 to 50,000 tonnes per year of nickel to service both the traditional stainless and EV battery market as well a cobalt revenue stream from outside of the Democratic Republic of Congo (DRC ) and service both the traditional stainless and EV battery market.’

Author: Daniel Flynn

The Author holds a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

Catalyst Information Services Ltd, the owner of MiningMaven.com, does not own a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

Catalyst Information Services Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.

MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author.  News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance.

Since listing in London last July, Kavango Resources (LSE:KAV) has been making progress in its quest to locate magmatic, massive sulphide orebodies in Botswana. In particular, the company is focused on a 450km-long magnetic anomaly called the Kalahari Suture Zone (KSZ), where it hopes to discover deposits of copper, nickel, and platinum group elements.

Recent weeks have seen Kavango’s shares enjoy a considerable rally as a result of strong drilling results at its Ditau prospect and progress in its ongoing airborne electromagnetic survey over the KSZ. Here, co-founder and seasoned geologist Mike Moles answers key questions from MiningMaven and investors around the firm’s recent newsflow and its plans moving forward.

Q) Kavango has recently completed an airborne VTEM survey over the Kalahari Suture Zone (KSZ). Could you please explain the limitations of the first VTEM survey, which was completed in October 2018, and what improvements were made for the second survey in February 2019. What were you hoping to find with the second survey?

A) In most AEM surveys, electro-magnetic waves are generated by towed equipment. The lower the frequency of the EM waves, the deeper they penetrate into the ground. A receiver on the aircraft measures the time delay in getting these signals back, and this measures the “conductivity” of the underlying rock.

The Phase 1 VTEM survey was carried out at a frequency of 25Hz. The higher frequency EM signals (50Hz or 25Hz) are absorbed by conductive layers in the ground, which is OK if you are looking for water in aquifers down to 100m depth. However, it is not so good if you are looking for deeply buried sulphide deposits at over 250m beneath conductive Kalahari salt pans or Karoo shales and mudstones.

The average depth penetration of the 25Hz VTEM survey was only 169 metres, so we were only just beginning to see the upper parts of conductors that could be indicative of mineralisation at our target depths. This meant we had to visit all 26 of the conductors identified in the VTEM survey and run some fairly extensive (and expensive) ground geophysical surveys over all of them to determine their potential for hosting mineralisation.

In the past, the main problem with the lower frequency surveys was noise. This was mostly due to the vibrations caused by the helicopter, and particularly that associated with wind-shear. After the disappointing depth penetration of the VTEM system, we learnt that the Danish company SkyTEM were claiming to have solved the noise issues with a 12.5Hz frequency system. Further enquiries and endorsements by companies that had used the system convinced Kavango to see if this new system would be available for our Phase 2 survey.

The added depth penetration of the SkyTEM system has made a huge difference to what we can “see” below the surface. It is like being able to see the whole body rather than just the top of its head.

Q) When Kavango first came to market, part of its pitch was that it expected to be able to release initial results from airborne surveys speedily. The company was able to provide results of the first airborne VTEM survey, and the identification of 26 conductors, within a very short time of completion. Release of results from the second survey has taken much longer. Why has the company changed its approach?

A) For the Phase 2 (SkyTEM) survey, it was decided to use some very hi-tech data processing that was being pioneered by a geophysics consultancy based in Copenhagen. This processing results in a very detailed 3D model of the ground covered by the survey. Because this consultancy is “well ahead of the game” in this work, there is much demand for their services. Our survey data had to wait in the queue. However, the work has now been finished, and Kavango are now evaluating the results.

Q) In December 2018 the company announced it had identified significant drill targets, after follow up ground surveys of the conductors identified in the first phase airborne VTEM survey. Could you please describe the process that was followed in the ground surveys, what the company was looking for and whether the company is following the same approach after the second airborne VTEM survey.

A) The follow-up process for the Phase 1 AEM survey involved the selection of 26 conductors by Kavango’s geophysics team together with geophysicists from the contractor (Geotech Ltd). Each conductor was given a number and visited on the ground. If the conductor appeared to be shallow and was overlain by a visible clay pan, the target was rejected for further follow up. Further selection was based upon whether the conductor had a surface (soil) geochemical anomaly sitting over it. This reduced the targets to eight. All of these were then surveyed by ground based CSAMT surveying (which is a type of EM). Of these, three were selected as “Significant Conductor Targets”.

The drilling of these targets was delayed because it was decided to drill the conductors discovered at the Ditau Camp Prospect (PL169) first. By the time the drilling at Ditau had been completed, the Phase 2 AEM data had identified further targets for evaluation. Once the Phase 2 targets have been followed up and prioritised, a KSZ drilling programme will be announced. This may include targets from the Phase 1 AEM survey.

Q) The recent RNS suggests the initial results of the second drill hole at Ditau were better than the first. Could you please describe what Kavango has already encountered across the two holes at Ditau and what the board hopes to see in the forthcoming results of the assay tests?

A) My view is that they both tell the same story. The main difference is that the first hole was stopped due to bad ground before it intersected the intrusive body at depth. The second hole intersected a gabbroic intrusive at 478m and was continued into the gabbro for a further 79m.

The geological interpretation of what we have discovered in these holes is still far from clear, but it seems quite unusual. The magnetics suggests that the gabbro is 7km by 5km in size with an unknown thickness. Both the gabbro itself and the overlying Karoo sedimentary rocks are highly altered. The fact that the alteration products are very similar for both the gabbro and the sediments suggests that the gabbro is of Karoo age (or even post-Karoo). Not only are both rock types altered but they are also highly deformed, suggesting some local (or even regional) tectonic event. Indeed, it seems possible that it was this tectonic event that led to the alteration rather than the intrusion of a molten magma into the sediments, which rarely produces such a degree of alteration.

A magnetic image of the Kalahari Suture Zone, where Kavango is searching for massive sulphide orebodies 

Unfortunately, the portable XRF is not able to determine values for gold, silver, uranium, vanadium or PGEs. Of the Rare Earths, only Neodymium (Nd) and Praseodymium (Pr) can be detected. But the XRF does suggest that the alteration includes elevated arsenic, cobalt, copper, zinc and lead, as well as high levels of iron, potassium, calcium, titanium, barium, strontium and zirconium. Neodymium and Praseodymium run at around 0.2% for over 200m.

Kavango is obviously waiting with great interest to see what comes out of the assay results. Of particular interest will be values for Rare Earths, gold, uranium, copper and vanadium.

Q) Could you please explain the significance of the Karoo sediments and the roles they play in Kavango's model for the KSZ and Ditau. What is the company looking for there and what indicators is it hoping to find to prove its hypothesis of the presence of a Norilsk style deposit(s) in the region.

A) In most of southern Africa, the Karoo sediments were laid down “unconformably” on top of much older rocks of the Proterozoic Era. The sedimentary sequences began accumulating about 300 million years ago and this lasted for about 110 million years. In the KSZ area (including Ditau) the Karoo sediments are usually 200 to 300m thick and capped with up to 20m of much younger Kalahari sand.

Towards the end of the Karoo the old super-continent of Gondwana started to break up with South America drifting away from Africa. As it did so, deep seated faults appeared parallel to the main rift, or in some cases old fault lines re-opened allowing molten magma to intrude into the crustal rocks. It seems that the old KSZ discontinuity which had formally marked a very ancient craton edge was re-activated and formed a conduit for ascending magma. The magma was extruded onto the surface in the form of basaltic lavas. These lavas built up into thicknesses of several kilometres and covered most of southern Africa as well as parts of India, Antarctica and South America, which were then still part of Gondwana. Whilst most of the lavas have since eroded away, many of the magma chambers that fed the lava “fissures” remain as intrusive bodies buried within the Karoo sediments. It is these Karoo intrusive bodies that Kavango believes could be associated with metal bearing sulphide deposits. 

We know that a similar chain of events took place at Norilsk (Siberia). Here, very rich sulphide ore bodies have been found in association with the magma chambers (or feeders). As at Norilsk, many of the intrusive bodies along the KSZ were emplaced within coal measures or coaly shales, where the high sulphur content of the host rocks may have facilitated the development of massive sulphide ore deposits.

As a general model, Kavango would expect to find such sulphide mineralisation within the lower Karoo sediments at depths of between 100m and 300m. However, the KSZ represents a 450km long zone of deep-seated faulting, intruded by magmatic bodies along its entire length. It is thus highly prospective for the discovery of any model of mineralisation associated with continental break-up and volcanism. Due to the depth of cover, the area has been largely ignored by mineral exploration companies. Only now have the geophysical and geochemical techniques become available to look beneath this cover for the large ore deposits that are likely to reside there.

Q) What is a gabbro and what is its significance?

A) Intrusive rocks start their life as molten magma at the interface between the solid crust and the semi-liquid outer mantle. Granite intrusions are made from re-cycled (molten) crustal material that has been brought down towards the mantle by subduction. But mafic and ultra-mafic intrusives are composed mainly of mantle-derived material that undergoes some degree of differentiation as it rises through the crust towards the surface. Magma that extrudes onto the surface cools fast and produces rocks with small crystals, whilst magma that cools slowly within the crust produces intrusives with more coarsely gained minerals. Gabbro is one of the most common mafic intrusives and the coarse-grained equivalent of basalt (lava).

Mafic and ultra-mafic magmas contain small amounts of precious and base metals. As the magma cools, these metals tend to find sites within crystallising silicate minerals and as such are not found in concentrations rich enough to form economic deposits. However, in certain circumstances, the metals can combine with “free” sulphur to form an immiscible liquid. This can accumulate in various areas within the magma chamber to form massive sulphide deposits. The extra sulphur required for “sulphur saturation” can be introduced by the incorporation of coal measures into the magma chamber during its emplacement.

Further concentration of the sulphur-rich liquid can occur by being forced cracks in the surrounding “country” rock as pressure builds up in the chamber; or much later, by hydrothermal fluids dissolving the sulphides and re-depositing them in more concentrated form elsewhere either within or outside the magma chamber.

Q) Could you please explain what the "alteration halo" is and why it is Kavango's principal interest at Ditau, as described in the recent RNS.

A) When a magmatic body is intruded into the country rock, it is extremely hot. Any water in the surrounding rocks becomes super-heated and can start to change the chemistry of both the country rocks and the cooling magma itself. This alteration has the capacity to “dissolve” certain elements within the mineral assemblages and deposit them, in concentrated form, in places where the temperature or pressure or chemistry of the hot liquid promotes deposition. This alteration is sometimes termed “an alteration halo”. However, as has been said in answer to an earlier question, gabbroic intrusions of the size underlying the Ditau prospect do not normally produce alteration halos hundreds of metres thick.

The intense alteration lying above the intrusive at Ditau appears to be around 300m thick, which is unusual. Both the Karoo sediments and the gabbro itself are also highly deformed. Kavango is interested in the mineralisation in the Karoo sediments because they are closer to surface. Generally, the deeper the mineral deposit is from surface, the higher the value of the mineralisation needs to be to make mining economically viable. Until we get the assay results back from the laboratory, we will not know if the alteration above the gabbro hosts economic resources of valuable minerals.

This article marks the first in a series of quarterly Q&A sessions between MiningMaven and Kavango on the behalf of Kavango’s investors. If you have any questions you would like answered in the next piece then please feel free to contact MiningMaven at This email address is being protected from spambots. You need JavaScript enabled to view it. or via our Twitter feed @theminingmaven. 

 

 

Thursday saw Global Energy Metals (TSX-V:GEMC) bag the right to use a major new hydrometallurgical process that it expects to accelerate the development of its Lovelock and Treasure Box projects in Nevada. The Canadian cobalt developer has amended the terms of a non-binding MoU with Canada Cobalt Works to secure a binding agreement for the right to use the company’s Re-2OX technology at its sites for one year.

Re-2OX is a proprietary and environmentally green hydrometallurgical process that recovers cobalt, precious metals, and base metals without using a traditional smelter. Canada Cobalt has said that the operation can create battery-grade cobalt sulphate, adding that nickel-manganese-cobalt battery-grade formulations are also in the pipeline.

Global Energy expects Re-2OX to complement a more extensive exploration and drilling program at Lovelock and Treasure Box that will allow for a reinterpretation of historical data. The business believes this will give it a better understanding of its ability to unlock their cobalt, nickel and copper potential.

The firm will pay Canada Cobalt Works $50,000 in cash and issue it with $150,000 worth of its shares to use the technology. The shares will each be priced at $0.075 and come with one 36-month warrant exercisable at $0.10.

Lovelock and Treasure Box are based around 150km east of Tesla’s major battery factory in Sparks. Lovelock covers around 1,400 acres and is said to have produced 500ts of cobalt and nickel mineralisation between 1883 and 1890 when it was last in operation. Global Energy believes exploration work and modern drilling techniques could unlock a large amount of potential value at the site.

Treasure Box, meanwhile, is adjacent to Lovelock and hosts mine workings from limited copper production, which occurred until early into the 20th century. A historical diamond drill hole at the asset reportedly intersected 1.52pc copper over 85ft, with mineralisation beginning at the surface.

Thursday’s update also saw Global Energy reveal that it has made significant progress in its Nevada fieldwork. The organisation recently completed a site visit at Lovelock that saw it take several selective samples from the project. It said that lab results from these samples compare well and reinforce confidence in the historical numbers for battery metals including cobalt, copper, and nickel within the asset.

The company also sent c.100kg of material from the site to SFS Canada as part of its work with Canada Cobalt around the use of the Re-2OX process. Lab findings on the content support the development of an initial work programme at Lovelock that includes additional surveying and sampling. This work will also include an integrated model of the historical workings and geological data from the asset that will be used to extrapolate high-priority targets for future drilling.

Chief executive Mitchell Smith said planning for this work is well underway, adding: ‘The Lovelock property has delivered historical cobalt, nickel and copper production and, more recently, encouraging assay numbers from samples taken during our site visit earlier this month. We are keen to get to work and explore the property-wide potential of this asset and work alongside Canada Cobalt Works in unlocking value through the Re-2OX process.’

Global Energy focuses on offering security of supply of cobalt, which is a critical material in the rapidly growing rechargeable battery market. It is building a diversified global portfolio of assets in the sector, including project stakes, projects and other supply sources.

The business’s flagship asset is the Millennium Project in the world-renowned Mt. Isa region of Queensland, Australia. It executed the final agreements to take a 100pc interest in the project in November. Millennium is a multi-zone, near-surface cobalt-copper sulphide system with several kilometres of potential strike length. It is located near established mining, transport, and processing infrastructure and offers easy access to a very skilled workforce.

The growth-stage site contains a defined zone of cobalt-copper mineralisation. Here, a 2016 JORC Resource estimate identified 3.1MMts of inferred resources containing 0.14pc cobalt and 0.34pc copper with gold credits. Global Energy is now looking at ways to increase the size of its deposit. Results from a first phase exploration campaign at two zones called Millennium North and Millennium South exceeded grade and thickness expectations. The firm will now carry out a second phase of drilling to examine both areas further.

Alongside Millennium, Global Energy has acquired two further discovery sites called Mt. Dorothy and Cobalt Ridge. These are collectively known as the ‘Mt. Isa projects’. The areas expand Global Energy’s Australian land position by nearly twenty times but have yet to be exploited. Exploration to date has returned high-grade cobalt intercepts at both, allowing Global Energy to line up numerous targets for further investigation and test work to define a resource.

Finally, the business currently owns 70pc of the Werner Lake cobalt mine in Ontario Canada. Its joint venture partner Marquee Resources is enjoying much success in its ongoing exploration campaign at the asset.

Author: Daniel Flynn

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

Catalyst Information Services Ltd, the owner of MiningMaven.com, owns a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

Catalyst Information Services Ltd, the owner of MiningMaven.com, has been paid for the production of this piece by the company or companies mentioned above.

MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

 

Conroy Gold and Natural Resources (LSE:CGNR) dipped 6.6pc to 5.7p on Wednesday after revealing that it has completed a 600m drilling programme on its Slieve Glah gold target in the Longford-Down Massif in Ireland.

The primary focus of the programme – which saw the firm drill four holes - was to follow up on encouraging gold-in-soil, deep overburden and trenching results in the Slieve Glah area. Detailed logging of the drill core is now underway, with completion expected by July this year.

According to Conroy, a controlling feature at Slieve Glah called the Orlock Bridge Fault undergoes a significant strike swing. These can often act as focal points for mineralisation. Meanwhile, an extensive gold-in-soil geochemistry exploration programme carried out by Conroy at Slieve Glah has demonstrated the presence of a series of c.3km-long gold-in-soil targets. Follow-up deep overburden and trenching at numerous sites have confirmed the area’s prospectivity for the precious metal.

Slieve Glah is found at the south-western end of the 65km gold trend discovered by Conroy in the Longford-Down Massif. It is around 40km downtrend from the Glenish-Clontibret-Clay Lake gold target in the northeast of the gold trend. Conroy is targeting high tonnage and high-contained-ounce deposits in the area. Examples of deposits with similarities to the mineralisation at Clay Lake and Clontibret are the orogenic Macraes mine in New Zealand and the intrusion-related Murantau mine in Uzbekistan.

All-in-all, Conroy has given Glenish-Clontibret-Clay Lake an estimated gold exploration target of 8.8MMoz. This excludes a JORC-compliant resource of 517,000oz of gold at the Clontibret deposit.

On Wednesday’s update, Conroy’s chairman Richard Conroy said: ‘The company’s emphasis remains on its potential multi-million-ounce gold target in the Glenish -Clontibret- Clay Lake area. However, the nature and extent of the Slieve Glah gold target area in the southwest of the gold trend suggests that it could add significantly to the 8.8 million ounce gold potential seen in the Glenish-Clontibret-Clay Lake gold target area.’

Author: Daniel Flynn

The Author does not hold a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

The Author has not been paid to produce this piece by the company or companies mentioned above

Catalyst Information Services Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.

MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author.  News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

On Tuesday Hummingbird Resources (LSE:HUM) released audited results for 2018 and updated investors on its guidance and draft Life of Mine (LoM) Plan.  The firm achieved maiden revenues of $116.54m from its flagship Yanfolila Gold Mine in Mali which was plagued by operational problems in the second half of last year.

Overall, the miner made a post-tax loss of $12.8m and held $21m cash at 31 December 2018. The cash balance includes $9.6m drawn under a loan for the installation of a second ball mill at the Yanfolila plant. This expansion is expected to be completed in Q3 of 2019 and will increase the available plant throughput by around 24pc.

The company forecasts production of 110,000 – 125,000 ounces of gold for 2019 but expects the following 3 years to achieve somewhere in the region of 130,000 – 145,000 ounces of gold per annum.  From 2023 production is set to decline to 80,000 ounces per year but the firm is in the process of attempting to mitigate this reduction with an increase in reserves.

In due course, Hummingbird will announce results of a scoping study on both the Gonka deposit, 5km from the process plant, and underground mining at Komana East which is currently operating an open-pit. The firm says that based on current resources over a million ounces of gold sit outside of its reserves.

Although remedial works progressed well - with the company announcing it had resumed full capacity production in Q1 this year - the operational problems have cost the company considerably. Hummingbird’s share price has remained very subdued as all in sustaining costs (AISC) have climbed, hitting profitability. It has resulted in lingering debt too, with borrowings at year end being ‘higher than would have been expected at this stage’ totalling $61m. However, from 2020 the firm anticipates the AISC will return to a much more attractive $800 per ounce and, in today's announcement, the company said 'early estimates from the LoM plan showed a significant improvement on production levels and lowering cost base of the mine'.

Meanwhile, the company is looking to extend operations beyond Mali, with one eye now firmly on the 4.2Moz Dugbe Gold Project in Liberia. The government has just signed a 25-year Mineral Development Agreement (MDA) with Hummingbird for the project. The firm has been granted an initial three-year exploration period with the ability to extend the MDA into other areas with geological continuity.

As I highlighted in an article over on ValueTheMarkets.com, the current sub-15p share price could offer a great opportunity to take a position in Hummingbird ahead of things hopefully improving in the second half of the year and beyond.

In addition, the stock could also serve as an excellent play on any bullish moves in the gold price. Gold had a nice run up to $1340 in February and, at least for now, it seems the August lows of $1160 were bottom-in. Central Banks have remained buyers of the precious metal and, at some point, we could see a run in gold if and when it’s next called upon as a safe-haven.

Author: Stuart Langelaan

The Author holds a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

The Author has not been paid to produce this piece by the company or companies mentioned above

Catalyst Information Services Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.

MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author.  News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

Guest article from https://valuethemarkets.com

Originally Published 22 May 2019

Today’s guest on the ValueTheMarkets podcast is Paul Johnson, Director of African Battery Metals. Since refinancing and Paul joining the board earlier this year, the explorer has been very busy reviewing and recommencing work at a number of projects. The company’s historic focus has been on projects in the Democratic Republic of Congo (DRC), Cameroon, and the Ivory Coast.  In the interview, Paul discusses the company’s review of its assets, the termite mound sampling programme at Kisinka in the DRC, and the recommencement of exploration at the firm’s Copper-nickel asset in Cameroon.

African Battery has also recently announced positive results from soil samples taken at their Haneti project in Tanzania.  Paul gives further details on this, going on to explain the option the company exercised with Katoro Gold to take a 25pc interest and the further earn-in options remaining available to African Battery. Finally, Paul discusses the recent move into Botswana, with an acquisition and earn-in agreement with Kalahari Key.

Author: Stuart Langelaan

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

The Author was paid to produce this piece.

Catalyst Information Services Ltd, the owner of MiningMaven.com, owns a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

Catalyst Information Services Ltd, the owner of MiningMaven.com, has been paid for the production of this piece by the company or companies mentioned above.

MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance.

All opinions expressed are those of ValueTheMarkets and the respective guests unless otherwise stated and should not be construed as investment advice or a recommendation to buy shares in any featured Company. Listeners are advised to do their own extensive research before buying shares which, as with all small-cap exploration stocks, should be viewed as high risk. Investors should also seek the advice of a qualified investment adviser or stockbroker as they deem appropriate.

On Thursday, Rockfire Resources (LSE:ROCK) announced it has exercised its option to acquire the Copper Dome Porphyry Copper Deposit in central Queensland from Symbolic Resources. The deposit is just 50km to the southwest of another of the firm’s interests, Copperhead, and the plan is to develop both projects simultaneously.

The acquisition follows by Rockfire earlier this year. The explorer carried out a programme of soil sampling, rock sampling and structural and geological mapping. On Tuesday, Rockfire said that soil sampling at Copper Dome had returned strongly anomalous results of up to 0.1pc copper. The copper anomaly has been extended south from the previous Rockfire survey by 500m and the anomaly remains open towards the east and west. The firm found copper-in-soil is strongest at the margins of the mapped porphyries. Summing up the exploration, David Price, Chief Executive Officer of Rockfire said:

This exploration has returned very high-grade copper-in-rock samples, medium level copper-in-soil values and low-level gold-in-soil assays. Importantly, this work has resulted in the delineation of clear geochemical targets."

The plan now is to develop the Copper Dome and Copperhead projects ‘with the aim of outlining very large tonnage copper resources." Price adds.

Copperhead, located close to the central Queensland coast, lies within a belt of porphyry copper deposits. Five diamond drill holes, drilled by previous explorer Carpentaria revealed chalcopyrite and pyrite throughout each hole, two of which were 300m deep indicating a potentially large target.

In consideration for Copper Dome, Rockfire will pay Symbolic A$30k in cash and issue 3,720,454 shares with an equivalent value of A$50k.

David Price, commented; 

"Our management team is encouraged by the confirmatory work done by the Rockfire exploration team as part of our technical due diligence on Copper Dome. With coherent copper occurring around the rim of a mapped porphyry, as well as gold occupying the boundaries of two close-spaced porphyries, the geological setting shows excellent signs for gold and copper mineralisation."

"Now that Rockfire owns Copper Dome, your company is in a unique position of controlling two potentially large-scale porphyry copper projects in its portfolio, both of which are considered worthy of inclusion in the Porphyry Copper Assessment published by the US Geological Survey. The Company's intention is to expand our exploration into geophysics, including ground magnetics and gradient array IP. These two geophysical techniques are expected to identify clear targets in and around the geochemical anomalies, which will lead towards drilling." 

Author: Stuart Langelaan

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

The Author has not been paid to produce this piece by the company or companies mentioned above

Catalyst Information Services Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.

MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author.  News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance



 

  1. Greatland Gold reveals major drilling updates at Havieron and Paterson Range East (GGP)
  2. Katoro Gold and African Battery welcome in ‘exciting’ soil sampling results at Haneti (KAT, ABM)
  3. African Battery kicks off copper-nickel exploration work in Cameroon (ABM)
  4. Oriole Resources rises as it reveals portfolio progress and highlights market undervaluation (ORR)
  5. Global Energy launches green metal recovery process in Nevada (GEMC)
  6. African Battery Metals completes field programme at Kisinka Copper-Cobalt Project (ABM)
  7. Kavango hits record high as second Ditau drill hole hits large zone of ‘intensely altered rock’ (KAV)
  8. Jangada Mines mired in the AIM vortex, can it break free? (JAN)
  9. African Battery to enter Botswana with ‘transformative’ acquisition and earn-in agreement (ABM)
  10. SolGold discovers large copper/gold system at Chical in busy week for newsflow (SOLG)
  11. Thor Mining continues drilling hot streak with further tungsten and copper intersections at Bonya (THR)
  12. US senator lays out plans to boost domestic battery metal miners with streamlined regulation
  13. African Battery announces exploration progress in the DRC (ABM)
  14. Complex “alternative” financing for Sirius Minerals unsettles market (SXX)
  15. Emmerson announces initial Khemisset gas deal with leading local supplier (EML)
  16. MetalNRG to acquire up to 75pc of Mkango Resources’ Thambani uranium licence (MNRG, MKA)
  17. Global Energy Metals pays bond to begin exploration work in Nevada (GEMC)
  18. Sirius Minerals rises after landing crucial European fertiliser distribution deal (SXX)
  19. Metals Exploration set back by funding constraints at Philippines gold project (MTL)
  20. An introduction to magmatic sulphide orebodies with Kavango Resources co-founder Mike Moles