Kavango jumps on fresh evidence of major Norilsk-style deposits in Botswana

Shares in AIM-listed Kavango Resources (LSE: KAV) bounced to new yearly highs on the release of a new report confirming Norilsk-style deposits in the firm’s Botswana territory.

Kavango shares surged 15% in early Thursday trading.

Core samples taken from a 2019 drill programme in the highly-prospective Kalahari Suture Zone show the rock and mineral composition closely matches that of Norlisk in northern Russia. 

These results are “an important step forward for the company”, Kavango CEO Michael Foster said. 

The company is now selecting targets for ground-based low frequency electromagnetic survey, to be carried out as soon as Covid-19 restrictions are lifted. 

Norilsk deposits host some of the world’s richest mineralised zones of copper-nickel-platinum group metals. The polar mine accounts for 50% of the entire global production of palladium, 20% of its nickel and 20% of the world’s platinum. Reports suggest the Siberian production has enough resources to continue working for another 50 years. 

Testing success

Despite the difficulties of the lockdown in Botswana, the company couriered its samples to Johannesburg in South Africa for initial analysis, then forwarded them on to independent consultant Dr Martin Prendergast in Scotland for interpretation. 

Dr Predergast tested the Kavango samples and confirmed two additional shared characteristics. They include cumulate rocks and crucially, sulphide liquid fractionation. 

An April 2020 report by Leicester University’s Dr David Howell confirmed the presence of 10 geological features found in Kavango’s Kalahari Suture Zone. These are associated with economically viable magmatic sulphide deposits. 

This is further evidence of huge upside for the company’s 2020 drilling programme. 

Now geologists know that the massive zone also features sulphide liquid fractionation and cumulate rocks, it adds more power to the Norilsk comparison. 

Dr Prendergast’s report is now on its way to Dr Howell for further interpretation and review. 

 

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

 

 

 

Kavango Resources – On the road to another Norilsk in Botswana? (KAV)

The Norilsk nickel mine sits high in the Russian Arctic plains, 1,700 miles northeast of Moscow in the permafrost of the Taimyr Peninsular.

Here, in the Arctic Circle’s second-largest city, virtually all of Russia’s copper and Platinum Group Metals (“PGMs”) are produced. Not only that, but this polar mine accounts for 50% of the world’s palladium, some 20% of its nickel, 20% of all platinum, over 10% of the world’s cobalt, and 3% of all copper mined globally.

This staggering production rate won’t slow down any time soon. Recent reserve estimates suggest Norilsk’s current output rates can be maintained for upwards of another 50 years. This is thanks to 500 million tonnes of probable PGM ore reserves, including 6 million tonnes of nickel, 9 million tonnes of copper, 62 million ounces of palladium, and 16 million ounces of platinum. 

For an idea of just how valuable this mine is, consider that Norilsk’s largest shareholder is one of the richest men in Russia.

Oligarch Vladimir Potanin swooped in for a 34.5% stake in MMC Norilsk Nickel Ltd (Nornickel) when it was privatised by the Russian government in 1995. His net worth is now reported to be close to $24 billion.

That’s a lot of money, but it’s not just Potanin basking in Norilsk’s riches. According to the Financial Times, Norilsk has generated the highest shareholder return of any large diversified miner over the last five years. As of 2020, the company has a market value of over $40 billion - nearly twice that of Anglo American (LSE:AAL), and $10 billion more than Glencore (LSE:GLEN).

How exciting, then, that Kavango Resources plc (LSE:KAV) is exploring a project that could rival the best of what Norilsk has to offer.

Kavango chief executive Michael Foster has repeatedly described the company’s targets here as “highly attractive”. However, those in the know would say that this is quite the understatement.

Kavango holds 12 prospecting licences across the KSZ and the adjacent Ditau Project in a huge, near-7,000km2 area.  Prof. David Holwell of the University of Leicester, a world authority on magmatic sulphide deposits, describes the KSZ as “a prime setting for a magmatic Ni-Cu-PGE deposit.”

Kavango is hard at work targeting nickel-copper-platinum-group-element deposits across the 450km length of the KSZ.

Fig. 1. Kavango’s 3 areas of exploration

Foster is keen to draw the Norilsk comparison for one precise reason: it’s backed by geoscience.

The same black, granular intrusive rock that hosts Siberia’s vast metal deposits – known as gabbro - is found under the Botswana sands, exactly where Kavango is drilling.

“We believe the results from our 2019 drilling in the KSZ have brought us closer to confirming a Norilsk-style ‘plumbing system’ through which significant quantities of metal sulphides were transported,” Foster explains.

Copper-Nickel-PGM deposits can accumulate in vast underground ‘traps’ — as molten metal-sulphides filter down through the cooling silicate magma. As at Norilsk, these accumulations can form huge ore bodies over a prolonged period of magma flow, which appears to be the case on the KSZ.

One of the most important results from the drilling and rock sampling by Kavango to date has been the confirmation that most of the gabbroic magma intruded into sulphur-rich coal shales.

Why is this key?

It tells Kavango’s geologists that the sulphur content of the magma would have increased due to the incorporation of sulphur rich coal shales into the melt. Therefore, more of the valuable metals (Nickel & Copper) would have combined with the sulphur to form sulphide accumulations.

Magmatic sulphide specialist Dr Martin Prendergast examined the geochemistry of the gabbro samples and concluded that the silicates seem to have “lost” metals during the crystallisation of the magma whilst the ratios of Cu/Zn and Cu/Pd strongly suggest that “sulphide saturation” would have occurred leading to the formation of metal sulphides. The location of these sulphide deposits are relatively simple to confirm in geophysical surveys because they conduct electricity so easily.

In Kavango’s recent Mineral Systems Review by Prof. Holwell it is suggested that large volumes of metal sulphides including copper, nickel and platinum could be found in trap zones associated with gabbro dykes (vertical) and sills (horizontal).

If this is correct and the accumulations are close enough to surface to mine economically, it will then be a case of identifying the location of these deposits with ground based geophysical surveys and obtaining samples of the mineralisation.

With so much ground to cover this is obviously a big job for Kavango, but the potential rewards are huge.

If the company is successful and identifies commercial metal deposits then this will be transformational for the company’s stock price. This will be the main focus of Kavango’s exploration efforts well into 2021.

Fig.2. Diagram showing how metal sulphides can accumulate within sills and dykes as the gabbroic magma ascends towards the surface. (After Barnes et al 2015)

Wider Exploration Potential in Botswana

It’s no surprise that fellow junior mining exploration companies are now following Kavango into Botswana.

Notably, shares in Power Metal Resources (LSE:POW) rocketed 50% in a day in April when the London explorer announced the acquisition of a 51% stake in Kavango’s Ditau Project located 70km east of the KSZ.

At Ditau, Kavango has been focussing on 10 or so “ring structures” identified from airborne magnetic surveys, which the company believes should contain “carbonatite” lying beneath about 70m of Kalahari Sands

Carbonatites, are intrusive/extrusive volcanic bodies whose geochemistry is dominated by calcium or magnesium carbonate. Significantly, carbonatites represent the leading source (almost the only source) of rare earth elements (REEs). REEs are becoming increasingly important in high tech applications, particularly in the manufacture of batteries and lightweight magnets used in the motors of Electric Vehicles.

At the time of the acquisition by Power Metals, chief executive Paul Johnson said the purchase offered “a great deal of promise for highly prospective” targets of carbonatite magmatism.

Across these targets, the Kavango/Power Metal Joint Venture hopes to discover economic deposits of REEs as well as niobium – a ductile metal used to create heat-resistant superalloys for jet engines. 

Just 25km to the north of the project area, three carbonatites were discovered by Falconbridge Exploration in the 1970s.

One of these was reported to contain high grades of Niobium.

Once the Covid-19 lockdown is over, the JV partners plan to carry out orientation surveys on the Falconbridge carbonatites before undertaking an exploration exercise to identify carbonatite within the ring structures. Once carbonatites have been confirmed, shallow drilling will be employed to test for REEs and other economically viable minerals.

 

Rising demand paints a positive picture for Copper, Nickel, REE and PGM producers

As Kavango pushes forwards, demand for rare earths and PGMs is also soaring. More and more of the world’s technologies are coming to rely on these highly sought-after minerals

Increasing quantities of palladium are being sought by world’s carmakers, who use the rare metal to manufacture green catalytic converters. Meanwhile, rare earths are critical in everything from medical equipment and electric car motors to lithium-ion batteries, computer hard drives, solar panels, and wind turbines.

The net result has been a surge in prices over recent months. Palladium soared to record highs above $2,795 an ounce in January 2020.  Spot prices have remained at 25-year highs in spite of the Covid-19 pandemic.

The reason?

Auto manufacturers are struggling to find new suppliers and tough new emissions standards have come into force around the globe.

Nickel, meanwhile, has jumped 18% since March.  A large driver here has been an export ban on the commodity in Indonesia – one of the world’s leading suppliers.

So, while prices of key metals take off across the globe, and Kavango finds precisely the same underground structures that made billionaires of Norilsk investors, the company now has a huge opportunity to match this exploration potential and enrich its early investors.

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

 

Kavango Resources rockets on encouraging portfolio progress (KAV)

Kavango Resources (LSE:KAV) rocketed by 43% to 0.9p a share on Thursday following the release of a company-wide update on its efforts to discover world-class metal deposits in Botswana.

One highlight was the news that Dr David Holwell, a leading authority on magmatic sulphide deposits, has reviewed the geological and economic potential of the firm's licence in the Kalahari Suture Zone ("KSZ"). Although Kavango expects to release the findings of the report in the coming weeks, the firm's chief executive gave an early indication of their high quality when he said:

"We are particularly encouraged by the initial results we've seen from Dr Holwell's report and look forward to providing a comprehensive update on this soon."

Kavango's ten prospecting licences cover a significant portion of the KSZ, which is a geological feature that shares a similar setting to the magmatic sulphide deposits at Norilsk in Siberia. These alone account for 90% of Russia's nickel reserves, 55% of its copper, and virtually all of its platinum group metals. Following a successful drill programme over the licences last year, Kavango is constructing a computerised 3D underground map of the northern part of the KSZ project area.

The company added that it is now fully-funded for the next phase of exploration work at the KSZ following financing earlier this month that saw it raise £358,500.

Elsewhere in Thursday's release, Kavango said it was reviewing further prospecting licences within the wider Kalahari Copper Belt to be held with the joint venture it set up with LVR GeoExplorers earlier this year. Meanwhile, the firm is also assessing the potential of a number of other prospecting licences in which it would take a 100% direct interest.

Finally, Kavango provided an update on the news earlier this month that it conditionally sold a 51% position in its prospective Ditau project in Botswana to its AIM peer Power Metal Resources (LSE:POW) for £150,000.

On Thursday, Kavango said Power Metal's due diligence work is ongoing and that it is planning orientation work on three "carbonatites" discovered 25 kilometres to the north of Ditau in the 1970s.

Carbonatites are a rare type of igneous rock almost exclusively formed from continental rift-related tectonic settings. They develop from volcanic activity that failed to erupt meaningfully at the earth's surface and typically form "ring structures" due to their lithological complexity and their tendency to "dome" the surrounding geology. Alongside rare earth elements, carbonatites can also often contain economic or anomalous concentrations of other highly-sought-after metals like phosphates, magnetite, strontium, niobium, and even copper.

De Beers has given Kavango access to the site of the three carbonatites, and the firm is now planning non-invasive geophysical work – subject to the adoption of an environmental plan and Power Metal's agreement. This will be used to guide future exploration of the ten "ring structure" magnetic targets at Ditau that are thought to represent carbonatites.

"Following completion of our recent strategic financing, we are extremely pleased to report on the progress we have made over recent months. We have kept dilution to a minimum, as we now enter the next crucial phase of exploration across our portfolio of projects," added Foster.

"Our goal is to discover world-class metal deposits in Botswana. Thanks to the evidence we have gathered in the field from surveys and drilling we are well positioned to build sophisticated geological models to hone future high-priority target selection."

Author: Daniel Flynn

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 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

Kavango Resources – searching for Rare Earth Elements as sector approaches critical transition period (KAV)

Forecast soaring demand for Electric Vehicles (EVs) threatens to end China’s decades-long tight hold over the Rare Earth Elements (REEs) market. As the world’s largest producer of REEs, accounting for more than 90% of global supply, China has used its dominant position to control prices. This has given it a crucial strategic advantage in international trade negotiations, not least as more and more nations seek to transition their economies towards “green” vehicles. However, this increased demand could prove to be a double-edged sword for the Chinese. While the demand has worked in China’s interests over the short-term, it has also caused mining exploration companies to seek out alternative sources of these valuable commodities. One company joining this hunt is Kavango Resources (LSE:KAV), as it pushes forwards with its Ditau Project in Botswana.

A crucial group of elements

Rare Earth Elements (REEs) are a series of 17 chemical elements found in the earth’s crust. The metals are applied primarily to increasing the efficiency of many technologies due to their unique magnetic, luminescent, and electrochemical properties. Their uses include everything from cutting weight, emissions, and energy use to enhancing performance and thermal stability in sectors ranging from consumer electronics to transport and defence.

List of rare earth elements (Source: Thermo Fisher Scientific)

Despite their name, REEs are not actually that ‘rare’ – being present in far higher concentrations than precious metals like gold in the Earth’s crust. Instead, their name comes from the fact that they are often challenging to extract because it is unusual to locate them in concentrations high enough for economic extraction.

According to the Society of Economic Geologists (SEG), the primary source of REEs for nearly 50 years has been geological formations called “carbonatites”. These are a rare type of igneous rock almost exclusively formed from continental rift-related tectonic settings. Carbonatites develop from volcanic activity that failed to erupt meaningfully at the earth’s surface. They typically form “ring structures” due to their lithological complexity and their tendency to “dome” the surrounding geology, leading to apparent “rings” after erosion has worn down overlying rock formations.

Alongside REEs, carbonatites can also often contain economic or anomalous concentrations of other highly-sought-after metals like phosphates, magnetite, strontium, niobium, and even copper.