Kavango Resources’ (LSE: KAV) strong run of newsflow continued on Tuesday, with the firm revealing that it has identified a new target at its highly prospective Kalahari Suture Zone project in Botswana.
As announced Thursday last week, Kavango is gearing up to start drilling in the Kalahari Suture Zone (“KSZ”) this June with two ‘proof of concept’ geological holes.
This latest electro-magnetic (“EM”) anomaly is in Target Area C of the KSZ’s Hukuntsi (northern) section and is designated Target C1 (“C1”).
The conductive anomaly, measuring 1,200m by 1,600m, is situated only 11km from Target A2 (“A2) – announced April 20. Not only that, but C1 and A2 appear to share the same geological corridor.
Drill operator Mindea Exploration and Drilling Services (“Mindea”) has already set up camp between the two targets and will start drilling at A2 in June and C1 in July. There will be at least one hole in A2 and at least one in C1.
Under the contract, Mindea will drill at least one 500m diamond hole at each of the two targets at Hukuntsi, with the cost per metre based on a possible per hole depth of 800m. The contracted company will also design and engineer all of the bore holes.
Not only that, but there is potential for increasing the drilling scope once the rig is on site – pending additional data analysis.
In yet more encouraging news for Kavango, it will pay less than half the drill cost to Mindea in cash, approximately £70,000. The rest is payable in shares, with the stock issue price being 4.53p per share
The two targets lie within what Kavango has described as “‘Norilsk-style’ gabbro keels”, and the goal with both drill holes will be to recover and analyse core from the bottom of the keels in order to test for the “potential to host major metal sulphide deposits”.
‘Norilsk-style’ refers to northern Russia’s Norilsk mining centre. Norilsk is the leading nickel and palladium producer in the world and a significant copper supplier. Gabbro is a type of rock formed when magma cools slowly under the earth’s surface.
Chief executive Michael Foster praised the “highly similar characteristics” shared by C1 and A2, calling it “very encouraging”. He highlighted the targets’ “ideal geological setting” and C1’s size, as well as its “conductance of 2,500 Siemens and a decay constant of ~360msec”.
Drilling at the KSZ follows three years of “extensive geophysical surveys” at Hukuntsi by air and on the ground. Efforts include an orientation drill programme, which helped build the firm’s extensive 3D Magnetic Model, as well as Time Domain Electromagnetic (“TDEM”) surveys.
In keeping with this scientific approach, Kavango intends to conduct “extensive assaying and downhole geophysics” for all of the boreholes drilled.
The planned testing programme for the boreholes includes downhole electromagnetic (“EM”) surveys, which will be performed by Spectral Geophysics. The anticipated search radius for these surveys will be between 300m and 400m from the drill string.
Additionally, the Kavango exploration team will conduct XRF testing of cores, as well as splitting the core for assay and petrological work.
Academic consultants in the UK will further analyse the petrological/mineralogical and geochemistry studies.
Elsewhere, Equity Drilling, a 49% Mindea shareholder, is in “ongoing discussions” for a possible future strategic partnership with Kavango. The company currently operates what Foster described as a first of its kind “highly regarded drill school in Gaborone”.
With drilling now imminent, this is an intense moment in Kavango’s history, perhaps the most important so far.
Shares in the company had risen by more than 3% on Tuesday morning, having grown by more than 120% year-to-date. This includes a rise of close to 40% in the last five days with a strong boost from the announcement on Thursday.
“If drilling validates our interpretation of the data, this could prove to be a significant development in our attempts to unlock the Kalahari Suture Zone,” Foster said.
Author: Anna Farley
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