Kavango Resources (LSE:KAV) has raised £2 million in an oversubscribed placing to push forward across its portfolio of exciting exploration projects in Botswana.
The London firm placed 72.7 million shares with institutional, high-net-worth, and retail investors at 2.75p each, also adding on 30-month warrants with a 4.25p exercise price on a one-for-one basis. These new shares will represent approximately 27% of Kavango’s enlarged share capital.
The funds will primarily be used to complete “large loop” electromagnetic surveys across Kavango’s project in mining-friendly Botswana’s Kalahari Suture Zone (“KSZ”). It aims to identify high-priority targets for a major 2021 drill campaign.
The KSZ is a 450km-longe magnetic anomaly in the southwest of Botswana where Kavango is exploring for copper, nickel, and platinum group metals-rich sulphide ore bodies. It offers a distinctly similar geological setting to the Norilsk mining centre in Siberia, which accounts for 90% of Russia's nickel reserves, 55% of its copper, and virtually all of its platinum group metals.
Meanwhile, Kavango also plans to commit working capital to the further exploration of its interests in Botswana’s Kalahari Copper Belt (KCB) as well as its nearby Ditau project. Many of these licences are held within a strategic joint venture with the firm’s London exploration peer Power Metal Resources (LSE:POW).
On the placing, Kavango’s chief executive Michael Foster said: "We are very pleased to have received such strong backing from investors, as we now enter an exciting phase of Kavango's development. The Company sought to raise a maximum of £2 million and I am happy to report that the placement was over-subscribed.
“We are now well funded to pursue our ambitious exploration plans and unlock what we believe is the Kalahari Suture Zone's ("KSZ") considerable potential. We have taken great strides over recent years to validate our overall exploration hypothesis that the KSZ is host to one or more large Copper-Nickel-PGM deposits.
“Over recent weeks we have continued further analysis of the extensive geological data we have compiled and will announce shortly our highest priority target areas."
Kavango’s placing comes on the back of expert analysis of exploration data that recently confirmed the potential for a massive, transformational nickel and copper discovery at the Kalahari Suture Zone.
Towards the end of last month, the firm confirmed that conditions were right about 180 million ago in the KSZ to create highly concentrated pools of super valuable and sought-after base metals, such as nickel and copper. With this confirmed data in hand, Kavango can move to exploit its virgin territory, which covers 12 licences stretching nearly 7,000km2.
Under the Kalahari sands lie vast rock formation (see image, marked in red) where huge pools of molten metal could have been trapped over time.
This is a territory that has never been explored. Results from Kavango’s three years of field work and laboratory testing have consistently pointed to a Norilsk-size Nickel project. Now the company has the analysis that seems to conclude it and the funds in place to seize the opportunity on offer.
Author: Daniel Flynn
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