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