Kavango Resources (LSE:KAV) was trading at 2020 highs on Tuesday after confirming "spectacular" geological similarities between its vast land package in Botswana and the giant Norilsk mining centre in Russia.
Over the past few months, Kavango has been building a 3D model for the 450km-long Kalahari Suture Zone ("KSZ") magnetic anomaly, where it is targeting world-class mineral deposits. The area is entirely covered by Cretaceous and post-Cretaceous Kalahari sediments and has never been explored using modern techniques.
Kavango secured thousands of data points from its own extensive aerial surveying and 2019 drill campaign, as well as from third-party historical exploration drilling and water boreholes, to build a comprehensive picture of the region’s prospectivity. On Tuesday, the company rocketed to 2.7p a share after confirming its 3D model had established critical similarities between the KSZ's northern "Hukuntsi" section and Norilsk.
Based in Siberia, Norilsk is one of the world's biggest mining centres, accounting for 90% of Russia's nickel reserves, 55% of its copper, and virtually all of its platinum group metals ("PGMs").
Specifically, Kavango's model depicts ten district-scale horizontal "sills" at Hukunsti covering over 300km2. Sills are relatively thin, planar, bodies of coarse-grained rock known as "solidified gabbroic magma" that intruded into layers of sedimentary rock while still molten during volcanic activity about 150 million years ago.
According to Kavango, these sills display dozens of "gull wing" and "keel" formations that are characteristic of those containing metal-rich massive sulphides at Norilsk. Two examples can be seen in the images below.
Cross section A-B from Hukunsti, KSZ
Cross section C-D from Hukunsti, KSZ
The similarities between these formations and the Norilsk schematic below are extremely striking.
As can be seen in the Norilsk schematic below, the copper, nickel, and PGM content in the upper "gull wings" is low. Much of this metal combines with free sulphur and gravitates down as a heavy sulphide liquid into the lower "keel" sector of the sill – which can then act as a trap zone or “bowl” for massive sulphide accumulations.
Kavango said the results of its 3D modelling have strengthened its belief in the KSZ's potential to host "very significant" copper, nickel, and PGM mineralization across multiple magmatic sulphide deposits.
For a more detailed look into the KSZ's Norilsk-style geological potential, click here to view a short presentation by Kavango's chief geologist Mike Moles.
Tuesday's news comes just weeks after an updated petrology report for the KSZ prepared by Dr Martin Prendergast confirmed exceptionally high sulphur readings in core samples taken by Kavango last year.
This was an important step forward as the presence of such high readings of sulphur confirms that the copper, nickel, and PGM elements in the magma bound together to form heavy sulphides.
Meanwhile, earlier this year, a mineral systems review over the formation demonstrated the presence of 12 key geological features associated with other world-class magmatic sulphide copper, nickel, and PGM deposits.
Kavango's chief executive Michael Foster added:
"The imagery coming out of the computer-generated geological model is quite spectacular and potentially transformational for the company. We are now able to view the gabbroic intrusions in 3D. We can see their shape, size thickness and their depth from surface. We can clearly identify and locate the thicker parts of the sills for follow up EM surveying.
This is a major step forward in our exploration, which should culminate in an extensive drilling programme in the KSZ."
With most of the sills lying within 400m of the surface at Hukunsti, Kavango is now primed for further field exploration.
The company's geologists will select six of the most prospective "keels" for large loop, low-frequency electromagnetic surveying. This will test for massive sulphide concentrations more definitively, as the structures are known to be highly conductive.
"[We] expect this work to result in the identification of high-priority targets for future drilling," the firm added.
Overall, this has been a highly encouraging summer for Kavango as it has advanced its exploration theory in the KSZ. The potential targets are huge, and it is now a question of finding them.
This really is elephant hunting of the highest order.
With a £5 million market cap, the potential upside here is immense.
Author: Daniel Flynn
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