Wednesday saw Kavango Resources (LON: KAV | OTCMKTS: KVGOF) reveal a survey providing yet more evidence of metal sulphides at its potentially enormous Botswana project.

Data confirmed the highly conductive anomaly previously identified at Kavango’s Kalahari Suture Zone (“KSZ”) project, with a conductance of approximately 3,000 Siemens. This suggests the presence of metal sulphides at the KSZ.

By Kavango’s estimation, the anomaly is 1 kilometre long and open along strike, extending between 250 metres and 700 metres below the surface.

The decay constant for the anomaly was about 340 msec. In conjunction with the conductance of around 3,000 Siemens, Kavango considers the readings to be “consistent with nickel sulphide deposits elsewhere in the world”.

Location-wise, the anomaly is also in the perfect geological setting, at the bottom of a ‘keel’ in the gabbroic intrusion according to the firm’s magnetic 3D model.

Spectral partnership

Kavango’s latest data comes from a Time Domain Electromagnetic (“TDEM”) survey completed by Spectral Geophysics in Target Area A of the KSZ.

The goal of the latest survey was to corroborate the presence of the previously identified large-scale conductive anomaly at the project. The survey certainly achieved this, and provided yet more evidence that the anomaly is indeed a nickel sulphide deposit.

In addition, Spectral successfully deployed an upgraded configuration of its equipment.

With the A3 survey complete, Spectral deployed its team and equipment to Target Area B1 straight away. This target was already prepared by Kavango’s field exploration team.

The survey at Target Area B1 is already nearly complete, with data due later this week. This data will also be processed, interpreted, and reviewed in due course.

After that, Spectral is set to move immediately to Target Area B2, which Kavango is preparing right now. 

Kavango and Spectral’s partnership is focused around identifying high-priority targets for drilling, and involves the company issuing 3.0 million shares to Spectral at a 3p per share issue price. These partnership shares have a 12-month lock-in.

A promising project

The KSZ, located in Botswana, includes 14 prospective licences that cover more than 7,500 square kilometres. Kavango is exploring the KSZ for metal sulphide ore bodies rich in copper, nickel, and platinum group metals.

Most excitingly for investors in Kavango, the setting for the KSZ is noticeably similar to the Norilsk mining centre in Siberia. This is one of the world’s largest and most metal-rich mines, producing around 20% of global nickel as well as 10% of the world’s cobalt and 3% of its copper. 

Kavango is now set to begin planning a drilling programme while results from the TDEM surveying are processed and interpreted.

Although the drill programme’s timing and extent are yet to be fixed, Kavango currently expects it to include holes up to 450 metres through the A2 conductive target. These holes are intended to intercept the conductor at about 400 metres.

Warrant exercise and outlook

Kavango also said that it received notices to exercise warrants over close to 6 million new shares, receiving £59,500 of subscription money. These warrant shares are being issued pursuant to an exercise of warrants announced back in April 2020.

Kavango’s shares were up 2.4% in London on Wednesday at 3.18p. However, the firm’s £10.8 million market cap could stand to re-rate significantly if the potential scale of the KSZ is realised. With work confirming that Kavango’s project bears a striking similarity to Norilsk, the company’s investment potential seems clear.


Author: Anna Farley

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