Broker sees huge upside in Kavango Resources with major Botswana discovery on the cards (KAV)

AIM-listed Kavango Resources (LSE: KAV) has the potential to produce a near-term 76% share price gain, according to a new note by First Equity. 

The copper and nickel explorer could hit 5.2p in short order, the broker said, from its current 2.8p.

Analyst Jason Robertson said the copper and nickel explorer also has “a medium to high probability of making a major exploration discovery within the next 18 months.”

Kavango is seeking world-class Norilsk-style nickel sulphide deposits from its 100%-owned flagship project at the Kalahari Suture Zone (KSZ) in Botswana. 

Investors may be wise to position themselves in the stock ahead of any potential landmark discoveries being made in the coming year as the Group ramps up its exploration activities,” the analyst added.

Norilsk in northern Russia hosts the planet’s richest supply of copper-nickel-PGM metals. The huge Siberian mine accounts for 50% of the world’s palladium production, along with 20% of global nickel and platinum. 

Success on this level for Kavango in Botswana would attract not only new investors but also possible big player industrial participants, Robertson said. 

Derisking the play is a recent JV with fellow AIM-listed Power Metal Resources (LSE: POW). And Kavango is also now fully-funded for a 2021 drill campaign after it successfully raised £2m from a heavily oversubscribed 10 November placing. 

At the time, CEO Michael Foster noted the company was now “well-funded to pursue ambitious exploration plans and unlock what we believe is the KSZ’s considerable potential.” 

KSZ potential booms

Kavango has a drill programme of 5,000 metres planned for 2021. In December 2020, it revealed it had identified four Norilsk-style ‘mega targets’ in the northern Hukuntsi section of the KSZ.

To confirm these targets, Kavango used proprietary techniques to produce the first ever 3D geological models of the region, followed by intensive ‘large loop’ surveys which are much more precise than standard airborne electromagnetic analysis. These give the £8.9m market cap company “a crucial competitive advantage” to determine high-priority drill targets, Robertson noted.

Previous work has confirmed important similarities between the KSZ and other major global metal sulphide deposits, including Norilsk and Voisey’s Bay in Canada. 

The broker note also focuses on Kavango’s management team, which it says has a successful track record in minerals discovery and realising value from exploration projects. 

Director Mike Moles “added significant value to several early-stage assets, including a Mozambique coal project that was sold to Riversdale, and then subsequently acquired by Rio Tinto for a sizeable US$4bn,” the note mentions. 

Joint venture

In 2020, Kavango signed terms with Power Metal Resources for a JV covering two of its Kalahari Copper Belt (KCB) licences and two licences at the Ditau Project for a 50% interest. Field explorations are currently underway.

The partners could seek to list a separate investment vehicle on UK or North American markets, enhancing additional value for shareholders, Robertson notes. 

The focus is an exploration-rich target area of west-central Botswana, which is near many world-class copper and silver discoveries made in the last 15 years such as Cupric Canyon’s Zone 5 and Sandfire Resource’s T3, T4 and A4 deposits.

POW CEO Paul Johnson “previously added considerable value to a Botswana project via a similar style JV” in his previous position at Metal Tiger (LSE:MTR), the note adds. 

Exploration drilling could follow in 2021 if results prove positive. 

Given the management’s experience in adding considerable value to resource projects in previous ventures, and high likelihood of finding similar world class deposits to those nearby and currently controlled by Cupric Canyon and Sandfire in the Kalahari Copper Belt,“ investors should watch Kavango Resources for an entry point in early 2021, Robertson concluded. 

Author: Mark Sheridan

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

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

MiningMaven 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 MiningMaven Ltd are not responsible for the article's 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

ECR Minerals ready for ‘extensive’ drill campaign in Victoria (ECR)

Gold explorer and developer ECR Minerals (LSE: ECR) is ready to carry out substantial new drilling at its highly prospective Victoria Goldfields prospects in Australia.

The company’s 100%-owned ‘Midas’ drill rig has now arrived at the inaugural Byron drill site in the HR3 area of the company’s Bailieston project. 

ECR’s planned drill campaign is fully funded from the company’s existing £2.95 million cash resources. 

Chief executive Craig Brown said:

This is the first of numerous planned drill locations which will be coordinated from ECR’s central exploration facility compound in the Victoria Goldfields.

Our resources give us considerable forward cash runway for operational and corporate activities.”

Brown added that investors could now expect regular drilling updates along with results from assay testing of drill samples.

ECR’s wholly-owned Australian subsidiary Mercator Gold Australia Pty (MGA) has built a strategic portfolio totalling 1,175km2 in the historic Goldfields area. The region as a whole is undergoing a second gold rush with smallcap miners now flocking to reports of hefty gold production under cover and at depth. 

Projects in the areas of Bailieston and Creswick form the two most prospective elements of the ECR Victoria gold exploration. The westernmost part of ECR’s Bailieston licences are just 30km east of Canadian giant Kirkland Lake Gold’s Fosterville mine. 

Bailieston produced significant results from reverse circulation drilling in 2019, with drilling at the Blue Moon prospect returning an intercept of 2m at 17.87g/t gold within a zone of 15m at 3.81g/t gold. 

And only a small proportion of Creswick has been explored to date: MGA’s tenement at the project covers around 7km of the Dimrocks Main Shale Trend

MGA is keen to follow up on previous exciting drilling results at Creswick. 

Results from reverse circulation drilling here has already confirmed the presence of very high grade “nuggety” gold mineralisation in the Dimrocks Main Shale, including 80.97 g/t gold from a 1 metre interval.

Drill sites have been determined and approval has been received from the relevant government authorities. In Q4 2020, MGA completed a soil geochemistry survey of the Jackass Reef prospect at Creswick, the results of which will be of significant value for drill targeting, ECR said.

Author: Mark Sheridan

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

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

MiningMaven 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 MiningMaven Ltd are not responsible for the article's 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

Ariana Resources exceeds gold production guidance in strong 2020 results (AAU)

Ariana Resources (LSE: AAU) has again beaten guidance to exceed targeted gold production from its Kiziltepe operations.

In its 2020 full-year production results, the AIM-listed explorer said production of the yellow metal outpaced expectations by 3.5% to hit 18,645 ounces in the year to December 2020. Revenue exceeded $37 million in 2020, it added.

Managing director Dr Kerim Sener said: 

The final quarter of 2020 rounded off another solid year of production for Kiziltepe, which once again exceeded joint venture guidance. We were further buoyed by gold and silver prices during the year, capping off an exceptional period of company development.

Spot gold prices remain elevated in early 2021 with an ounce of the yellow metal north of $1,800/oz.

In the three years since commercial gold-silver production began at the Turkish mine, the group reported that Kiziltepe had produced a total of 84,200 ounces of gold and 915,233 ounces of silver. This output amounts to a total revenue of $134 million. 

Dr Sener added: 

Since operations commenced at Kiziltepe, the joint venture company, Zenit, has successfully repaid US$36.7 million in debt to Turkiye Finans Bankasi A.S. Accordingly its relationships with lenders are very sound, which bodes well for future mine development projects at Tavsan and Salinbas, contemplated as part of our planned new joint venture with Özaltin and Proccea.”

Kiziltepe expansion

The company has long maintained there is significant opportunity for further resource and production expansion at Kiziltepe. To that end, it has now begun a two-rig diamond drilling programme of up to 5,000m to test vein extensions like Arzu South, Arzu North, Derya and Banu.

Mining is continuing at Arzu North and Derya, with plans to expand these open-pit operations, Ariana said. A processing plant expansion is also underway with construction due to complete in H2 2021. The plant’s capacity will be 300% larger than initial designs and able to process 500,000 tonnes of ore per year. 

Ariana currently operates the Kiziltepe mine in a 50% joint venture as part of its Red Rabbit gold project with Ankara-based engineering firm Proccea Construction. That stake is set to reduce to 23.5% as part of its deal with conglomerate Özaltin Holding.

Transformational year 

Ariana’s strategy to expand its portfolio using current cashflow will continue, it said. The company is also exploring and developing the 1 million ounce Salinbas gold project in north-east Turkey.

An April 2020 resource update upgraded the Kiziltepe mine life to 2026 and extended the asset’s total undepleted gold estimate by a further 25%. 

In July the same year, the company secured a landmark deal worth $50 million with Özaltin for a 53% stake in Salinbas and a 50% stake in the Red Rabbit JV.

Investors received notice of a special dividend in September 2020 to mark completion of the Özaltin JV with managing director Dr Kerim Sener noting that Proccea would pay Ariana $5.75 million in cash to acquire its 23.5% stake in Salinbas. 

A scoping study of Salinbas identified a 10-year life of mine with a JORC resource of 9.9Mt @ 2.0 g/t Au.

Ariana’s reduced holding in the JV “will naturally place a different emphasis on our operational activities going forward,” Dr Sener noted. Production would now be reported every six months rather than quarterly. 

Other portfolio developments include the start-up of field activities, fast-tracking a range of copper-gold opportunities in the region and increasing the pace of the company’s involvement with Venus Minerals in Cyprus. 

It expects that diamond drilling will be able to start at the Magellan Project by Q2 2021. 1,705m of percussion drilling across 15 holes has already discovered a zone up to 12m thick containing anomalous gold geochemistry at just 50 to 80 metres below the surface.

Permitting activities continued at portfolio projects Tavsan and Salinbas throughout the winter, Ariana said, with resource drilling at Tavsan due to start in spring 2021.

Author: Mark Sheridan

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

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

MiningMaven 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 MiningMaven Ltd are not responsible for the article's 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

 

Power Metal Resources spikes to fresh highs on Ditau Project update (POW)

Power Metal Resources (LSE: POW) has hit new all time highs above 3p on news about its Ditau Project in Botswana. 

The London-listed miner climbed more than 5% on Tuesday 5 January after announcing the first stage of orientation work at Ditau was now complete. 

The Ditau project is made up of two licenses covering 1386km2, with the main focus being 10 large geological formations known as ‘ring structures’. One of the largest of these is 7km by 5km across. Each is thought to host carbonatite rocks, which are the principal source of rare earth elements. 

The exercise examined the magnetic anomaly called ‘I10’, and included taking soil geochemistry samples along with controlled source audio-frequency magnetotellurics across a 5km run. The objective was to identify the position of rocks beneath the surface by testing their magnetic resistance.

Power Metal said it planned follow-up surveys for I10 in mid-January 2021, including gravity surveys at 50m intervals and a ground magnetic geophysics survey at 12.5m spacing. 

Assay results and processed geophysics from the exercise are expected by early February 2021. 

The results will shape the calibration of survey equipment for follow-on surveys of the remaining nine ring structures, Power Metal said. 

The company’s Botswana project comprises a 50-50 joint venture with fellow AIM-listed explorer Kavango Resources (LSE: KAV) to discover rare earth elements including Neodymium (Nd) and Praseodymium (Pr). 

The two metals are key elements in the manufacture of high-level magnets and parts for electric vehicles. Tesla (NASDAQ:TSLA) and Chinese competitor NIO (NYSE:NIO), for example, both use the sought-after metals in their engines. 

Power Metal Resources has extensive geophysical surveying and soil sampling planned at Ditau throughout Q1 and Q2 2021, and an exploratory drill campaign is expected to start in early Q3 2021. Exploration is expected to be relatively straightforward: assuming the surveys can isolate specific drill targets, they can be tested by very low-cost reverse circulation drilling. 

Back in April 2020, the Power Metal share price jumped to a then-high of 0.3p on news of the Ditau JV. Now the share price has gained some 900%, 3p is expected to be the baseline for the company to grow much more strongly.  

CEO Paul Johnson commented:  

With the Ditau Project we are seeking a discovery of rare earth elements (REEs), which are highly valuable and sought after commodities, particularly from secure and stable jurisdictions such as Botswana.”

"The Strategic Joint Venture with Kavango is surging ahead with work completed and announced from the Kalahari Copper Belt, and now from the Ditau Project.”

 

Author: Mark Sheridan

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

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

MiningMaven 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 MiningMaven Ltd are not responsible for the article's 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

 

Global Energy Metals takes million-dollar cobalt upside with Werner Lake sale (GEMC)

Influential battery metals pioneer Global Energy Metals (TSX-V:GEMC) has inked a deal to sell its entire 70% stake in a key Canadian mining resource to ethical cobalt specialists CBLT Inc. (TSXV: CBLT).

GEMC’s sale of its total interest in the Werner Lake project provides the company with immediate cash while retaining useful exploration upside through a stake in CBLT. 

Under the terms of the deal, GEMC receives a $20,000 non-refundable deposit and 5 million CBLT shares worth $250,000 issued at $0.05/share. Global Energy Metals will also receive 3.5 million CBLT warrants, each exercisable at $0.08 per share with a two-year term. The equity stake in CBLT represents 11% of the miner’s share capital. GEMC CEO Mitchell Smith said the move “will strengthen GEMC’s equity portfolio holdings of battery mineral focused peers”. 

GEMC will also get a royalty payment of $500,000 in cash upon Werner Lake reaching commercial production. 

The cobalt resource consists of 102 patented mineral claims in one of Ontario’s key mining districts. Historically the mine has produced 143,386 pounds of cobalt at a 2.2% grade. 

GEMC has previously partnered with ASX-listed Marquee Resources (ASX:MQR) at Werner Lake. Marquee reportedly intersected high-grade cobalt mineralisation from numerous diamond drill holes. 

If CBLT sells or options part of Werner Lake within two years, GEMC will also receive 20% of the gross proceeds. 

Mitchell Smith believes that the global transition to net zero energy — powered by the massive growth of rechargeable batteries — is potentially one of the biggest commercial opportunities of this generation. 

As such the GEMC CEO has been furiously building and maximising shareholders’ exposure to the battery metals supply chain. Sales like this, while retaining strong exposure to mining upside has positioned the company for long-term growth, too. 

It’s likely why Vancouver-based institutional equity researchers Fundamental Research Corp rate the stock a buy, with forecast near-term upside of 63.6% from today’s $0.28 share price.

This transaction will provide GEMC’s shareholders exposure to CBLT’s potential future growth through a meaningful equity stake in a resource-focused company that is accelerating battery and precious metals exploration efforts in Ontario, Canada,” Smith noted. 

Auto goes electric

As ever more automotive giants spend increasingly huge amounts of capital into moving their fleets to electric, the spotlight is shining ever brighter on battery metals. 

As CNN Business described on the launch of the Audi e-tron: “The great electric car race is just beginning. Thirty-six shoebox sized battery modules, each containing a dozen lithium ion cells are packed into 7ft-long electric battery packs and slung under the floor of each SUV.” 

What powers those shoebox-sized lithium-ion batteries? Critical metals like cobalt. That is Global Energy Metal’s prime focus and its greatest benefit. 

And the stakes? “Failure [for Audi owner Volkswagen] could signal the end for a company with an annual revenue of $265 billion.”

The consequences, too, for governments and policymakers who fail to find solutions to rapid climate change will be dire. So, it’s clear that battery metals represent a key growth area for the trillion-dollar automotive sector, along with a potential salve for renewable energy enthusiasts.

Nevada next

In recent months, GEMC has positioned itself strongly for growth. 

In August 2020, the firm tidied up its corporate structure with a 10-for-1 share consolidation. 

Then, a month later, it raised $659,000 in an oversubscribed private placement to take an 85% stake in Treasure Box and Lovelock. These are two key Nevada cobalt, copper and nickel projects on the doorstep of Tesla’s giant lithium-ion Gigafactory 1.  

New magnetic data results from Lovelock in November 2020 showed the rocks that host known metal deposits extend 2.5km beyond the previously thought zone, with 18 clustered magnetic high anomalies potentially reflecting resources from the surface to 150 metres deep. Eight drill holes have now been proposed for GEMC’s first exploration. 

Author: Mark Sheridan

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

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

MiningMaven 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 MiningMaven Ltd are not responsible for the article's 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