KAV

  • ‘We only need to find one deposit to confirm our theory is correct’: Kavango Resources on hunting for sulphide orebodies in Botswana

    Last month saw Kavango Resources (LSE:KAV) announce the first results of its airborne EM survey to find massive sulphide orebodies in Botswana. The surveying has so far identified 26 conductors along the Kalahari Suture Zone (“KSZ”) for follow up groundwork, exceeding management’s expectations.

  • An introduction to magmatic sulphide orebodies with Kavango Resources co-founder Mike Moles

     

    Since listing in London last July, Kavango Resources (LSE:KV) has been making progress in its quest to locate magmatic, massive sulphide orebodies in Botswana. In particular, the company is focused on a 450km-long magnetic anomaly called the Kalahari Suture Zone (KSZ), where it hopes to discover deposits of copper, nickel, and platinum group elements. In this piece, Kavango co-founder and seasoned geologist Mike Moles explains how the magmatic sulphide orebodies Kavango is searching for are formed, what they could contain, and how they can be developed into a marketable product.

    Until Kavango started work on the KSZ, the mineral potential of the area had not been investigated using modern exploration techniques. Kavango believes that the KSZ represents a similar geological setting to the giant Norilsk copper/nickel/PGE deposits in Siberia. The firm has now begun an initial 1,000m drill program at its nearby Ditau prospect.  Meanwhile, the company is continuing to line up further drilling targets through the combination of an extensive airborne EM survey and a pioneering, high-resolution soil sampling technique that detects ultra-fine metal particles.

    What are magmatic sulphide orebodies?

    Magmatic ore deposits are formed in association with the intrusion of mafic/ultra-mafic magma into (or sometimes on top of) the rocks forming the earth’s crust. This magma contains more dark minerals like olivine and pyroxene than light-coloured minerals like silica-rich feldspars and quartz.

    Examples of mafic/ultra-mafic rock include gabbro, peridotite and dunite. Most of the minerals making up these rocks are still silicates but they tend to contain relatively higher proportions of base and precious metals in their crystal lattices than felsic minerals. The diagram below shows this dynamic in action. When these metals are concentrated at high enough grades and in large enough quantities to be economically mined, they are called ‘magmatic ore deposits’.

     

    This diagram shows examples of both mafic and felsic rocks (Credit: W.W. Norton & Company)

    It is worth noting that magmatic ore deposits are not the same as volcanogenic massive sulphide (VMS) deposits. These are formed from the interaction of seawater with submarine volcanism. The extrusive volcanism represents a ‘heat engine’ that drives the hydrothermal alteration of both the lavas and the country rock. The metals that are ‘dissolved’ by the alteration then combine with sulphur in the seawater. This leads to the deposition of metal sulfide deposits on the seafloor or within the country rocks.

    How are they formed?

    Mafic/ultra-mafic magma is the product of the partial melting of ultra-mafic rock and sub-ducted crust. The magmas rise into the solid crust partly due to thermal convection (hot spots), partly due to the melting of sediments containing water, and partly due to density, temperature & pressure differentials.

    In some cases, the magmas intrude into areas of structural weakness like deep-seated faults or ancient craton edges or suture zones. Here, the magma can reside for varying periods in what are known as ‘magma chambers’ where it interacts with the enclosing rock.

    During this period, the magma may partly crystalize and alter the chemical composition of the residual magma. Further pressure from below may then force this ‘evolved’ magma into shallower depths.  In some cases, it may eventually reach the surface, where rapid decompression may result in the extrusion of lava (e.g. basalt). Extrusive lavas cool rapidly, but the magma in the magma chambers may take several million years to cool and crystalize to form solid rock. 

    Following this, the concentration of the critical ‘ore’ minerals occurs through a number of different primary and secondary processes.

    Primary concentrations

    The mafic/ultra-mafic magmas vary in chemical composition depending upon their source rocks and the degree of partial melting that occurred during their formation. The molten magma may end up containing quantities of sulphur and water.

    As the magma in the magma chamber begins to cool it starts to crystalise, with some minerals crystalising before others. This changes the chemical composition of the residual magma, leading it to be enriched in certain elements through a process known as ‘fractional crystallisation’.

    The chemistry of the residual magma may also be changed by the incorporation of volumes of ‘country’ rock from the walls of the chamber. It is particularly advantageous for the magma to incorporate volumes of coal or coal shale that contains both sulphur and carbon. This appears to be the case with the gabbros on Kavango’s KSZ project. If the residual magma becomes enriched with sulphur, most of the metals will prefer to bond with the sulphur rather than form oxides or take up sites within the silicate lattices. The metal sulphide liquid is late to crystallize and forms an ‘immiscible’ liquid, which is heavy relative to the recently formed silicate minerals. This metal-rich sulphide liquid tends to crystallize on the cool walls of the intrusion or gravitates to the floor where it forms a concentrate - the massive sulphide. 

    Concentration and crystallization of this immiscible liquid can also occur at other localities due to a sudden drop in pressure or introduction of new magma into the chamber. This type of mineral concentration is usually dependent upon large quantities of magma passing through the magma chamber, constantly enriching the residual magma in metal sulphide liquid.

    A variation of this model occurs in very large mafic/ultra-mafic (layered) intrusive bodies such as Bushveldt, Duluth, and Stillwater. These are closed or partly-closed systems where magma replenishment is less important. In these bodies, sulphur is also less important. After the first phase of crystallization, the residual liquid becomes enriched in certain elements. This may lead to the crystallization of another mineral species until the residual liquid becomes depleted in the elements needed for that phase. This leads to cyclical fractionation producing alternation layers of mineral species. At some point in this very slow process, bands of chromite might form as the concentration of chrome in the residual melt combines with oxygen in the system. As the silicate crystals form, gaps occur between them. These gaps may be filled with the immiscible sulphide liquid, which is rich in copper, nickel and PGEs. In some cases, these sulphide-rich layers are rich enough to be economic.

    Another variation are Komatiites, which seem to be restricted to very ancient ‘Archean’ terrains formed at a time when there was no free oxygen in the air. They are essentially ultra-mafic lavas that once flowed over the surface of the earth and were enriched in sulphur.  As the lavas cooled, the metals combined with the sulphur and the resulting immiscible liquid sank to the paleo-surface, where it accumulated in depressions and hollows forming sulphide concentrations. An example of this is Kambalda.

    A magnetic image of the Kalahari Suture Zone, where Kavango is searching for massive sulphide orebodies 

    Secondary concentrations

    Secondary concentrations occur at some point in time after the intrusive has solidified (crystallised). The majority of these deposits are formed by hydrothermal alteration. Essentially, this is the activity of very hot water (or brines) circulating through the intrusive and concentrating the metals further, either within the intrusive itself or transported some distance away, where the precipitation of the minerals is favourable.  These secondary deposits come in the form of re-crystallised sulphides or as oxides/carbonates and can be very high grade.

    What do they look like?

    On the surface, weathered massive or disseminated sulphide orebodies will form ‘gossan’. These are generally rusty coloured rocks with a rough, crinkly texture. Gossans can be very high grade, although metallurgically these metal oxide ores can be difficult to process. Massive sulphide ore is generally very heavy, formed of a mass of shiny suphide crystals, and will smell of suphur when hit with a hammer. Disseminated sulphide ore will have large numbers of shiny sulphide crystals within a matrix of the host rock (usually gabbro or altered mafic rock).

    An example of the various layers of a sulphide mineral vein, with gossan at the top (Credit: Bastian Asmus, Archaeometallurgy) 

    How are they found?

    The metal particles within the sulphide crystals are too small to find with the naked eye in streams or soils.

    Most of the oldest mines are sited where outcrops of gossan were discovered. Typically, the gossans were assayed for metal values. When these proved to be positive, drilling was conducted beneath the gossans to identify sulphide mineralisation below the level of oxidation. Usually, the oxides were not mined, due to the difficulty of extracting the metal.

    Although there have been some discoveries in very remote areas in recent times by finding the gossans, most exploration for magmatic sulphide ore bodies is now conducted by remote sensing for hidden orebodies.

    Before starting the search, geologists will select areas where a discovery is likely. These will be in areas where mafic/ultra-mafic intrusives are known to occur. Preferably this will be in association with a major structural fault along which intrusives from below the crust can migrate. 

    Soil sampling can identify metals coming to surface, whilst geophysical techniques can identify massive sulphide bodies at depth by testing the electro-magnetic signals of the ground being explored. This can be done by airborne EM surveys, which can cover hundreds of kms of survey per day and will typically identify conductors to 200 - 300m depth.

    EM conductors identified from the airborne surveys are then followed up by ground-based geophysical techniques to identify drilling targets. Depths to targets can be calculated and drilling can be conducted to investigate the anomalies. 

    How are they extracted? 

    Once a metal sulphide deposit has been identified, drilled out and a resource calculated; a feasibility study will be carried out to determine whether it can be mined economically. It will be decided how the deposit is to be mined; open cast or underground mining.

    During the mining operation, only the ore of a certain grade will be processed. The ore will then be crushed and milled to liberate the sulphides from the host rock (gangue). The resulting product will then undergo floatation which will separate the sulphides from the guague. The sulphides are then smelted to burn off the sulphur (usually captured), leaving a metal matte, which is then sent to a refinery where the economic metals are separated and extracted. The product is either sold at the matte stage or as a metallic product after refining.

    Author: Mike Moles

    Mike is the co-founder of Kavango Resources (LSE:KAV), where he is currently a non-executive director and responsible for exploration strategy in Botswana. He has 30 years of experience in mineral exploration in southern Africa and has formerly held senior roles at Delta Gold, Reunion Mining, and Lonmin.

  • An introduction to magmatic sulphide orebodies with Kavango Resources co-founder Mike Moles

     

    Since listing in London last July, Kavango Resources (LSE:KV) has been making progress in its quest to locate magmatic, massive sulphide orebodies in Botswana. In particular, the company is focused on a 450km-long magnetic anomaly called the Kalahari Suture Zone (KSZ), where it hopes to discover deposits of copper, nickel, and platinum group elements. In this piece, Kavango co-founder and seasoned geologist Mike Moles explains how the magmatic sulphide orebodies Kavango is searching for are formed, what they could contain, and how they can be developed into a marketable product.

    Until Kavango started work on the KSZ, the mineral potential of the area had not been investigated using modern exploration techniques. Kavango believes that the KSZ represents a similar geological setting to the giant Norilsk copper/nickel/PGE deposits in Siberia. The firm has now begun an initial 1,000m drill program at its nearby Ditau prospect.  Meanwhile, the company is continuing to line up further drilling targets through the combination of an extensive airborne EM survey and a pioneering, high-resolution soil sampling technique that detects ultra-fine metal particles.

    What are magmatic sulphide orebodies?

    Magmatic ore deposits are formed in association with the intrusion of mafic/ultra-mafic magma into (or sometimes on top of) the rocks forming the earth’s crust. This magma contains more dark minerals like olivine and pyroxene than light-coloured minerals like silica-rich feldspars and quartz.

    Examples of mafic/ultra-mafic rock include gabbro, peridotite and dunite. Most of the minerals making up these rocks are still silicates but they tend to contain relatively higher proportions of base and precious metals in their crystal lattices than felsic minerals. The diagram below shows this dynamic in action. When these metals are concentrated at high enough grades and in large enough quantities to be economically mined, they are called ‘magmatic ore deposits’.

     

    This diagram shows examples of both mafic and felsic rocks (Credit: W.W. Norton & Company)

    It is worth noting that magmatic ore deposits are not the same as volcanogenic massive sulphide (VMS) deposits. These are formed from the interaction of seawater with submarine volcanism. The extrusive volcanism represents a ‘heat engine’ that drives the hydrothermal alteration of both the lavas and the country rock. The metals that are ‘dissolved’ by the alteration then combine with sulphur in the seawater. This leads to the deposition of metal sulfide deposits on the seafloor or within the country rocks.

    How are they formed?

    Mafic/ultra-mafic magma is the product of the partial melting of ultra-mafic rock and sub-ducted crust. The magmas rise into the solid crust partly due to thermal convection (hot spots), partly due to the melting of sediments containing water, and partly due to density, temperature & pressure differentials.

    In some cases, the magmas intrude into areas of structural weakness like deep-seated faults or ancient craton edges or suture zones. Here, the magma can reside for varying periods in what are known as ‘magma chambers’ where it interacts with the enclosing rock.

    During this period, the magma may partly crystalize and alter the chemical composition of the residual magma. Further pressure from below may then force this ‘evolved’ magma into shallower depths.  In some cases, it may eventually reach the surface, where rapid decompression may result in the extrusion of lava (e.g. basalt). Extrusive lavas cool rapidly, but the magma in the magma chambers may take several million years to cool and crystalize to form solid rock. 

    Following this, the concentration of the critical ‘ore’ minerals occurs through a number of different primary and secondary processes.

    Primary concentrations

    The mafic/ultra-mafic magmas vary in chemical composition depending upon their source rocks and the degree of partial melting that occurred during their formation. The molten magma may end up containing quantities of sulphur and water.

    As the magma in the magma chamber begins to cool it starts to crystalise, with some minerals crystalising before others. This changes the chemical composition of the residual magma, leading it to be enriched in certain elements through a process known as ‘fractional crystallisation’.

    The chemistry of the residual magma may also be changed by the incorporation of volumes of ‘country’ rock from the walls of the chamber. It is particularly advantageous for the magma to incorporate volumes of coal or coal shale that contains both sulphur and carbon. This appears to be the case with the gabbros on Kavango’s KSZ project. If the residual magma becomes enriched with sulphur, most of the metals will prefer to bond with the sulphur rather than form oxides or take up sites within the silicate lattices. The metal sulphide liquid is late to crystallize and forms an ‘immiscible’ liquid, which is heavy relative to the recently formed silicate minerals. This metal-rich sulphide liquid tends to crystallize on the cool walls of the intrusion or gravitates to the floor where it forms a concentrate - the massive sulphide. 

    Concentration and crystallization of this immiscible liquid can also occur at other localities due to a sudden drop in pressure or introduction of new magma into the chamber. This type of mineral concentration is usually dependent upon large quantities of magma passing through the magma chamber, constantly enriching the residual magma in metal sulphide liquid.

    A variation of this model occurs in very large mafic/ultra-mafic (layered) intrusive bodies such as Bushveldt, Duluth, and Stillwater. These are closed or partly-closed systems where magma replenishment is less important. In these bodies, sulphur is also less important. After the first phase of crystallization, the residual liquid becomes enriched in certain elements. This may lead to the crystallization of another mineral species until the residual liquid becomes depleted in the elements needed for that phase. This leads to cyclical fractionation producing alternation layers of mineral species. At some point in this very slow process, bands of chromite might form as the concentration of chrome in the residual melt combines with oxygen in the system. As the silicate crystals form, gaps occur between them. These gaps may be filled with the immiscible sulphide liquid, which is rich in copper, nickel and PGEs. In some cases, these sulphide-rich layers are rich enough to be economic.

    Another variation are Komatiites, which seem to be restricted to very ancient ‘Archean’ terrains formed at a time when there was no free oxygen in the air. They are essentially ultra-mafic lavas that once flowed over the surface of the earth and were enriched in sulphur.  As the lavas cooled, the metals combined with the sulphur and the resulting immiscible liquid sank to the paleo-surface, where it accumulated in depressions and hollows forming sulphide concentrations. An example of this is Kambalda.

    A magnetic image of the Kalahari Suture Zone, where Kavango is searching for massive sulphide orebodies 

    Secondary concentrations

    Secondary concentrations occur at some point in time after the intrusive has solidified (crystallised). The majority of these deposits are formed by hydrothermal alteration. Essentially, this is the activity of very hot water (or brines) circulating through the intrusive and concentrating the metals further, either within the intrusive itself or transported some distance away, where the precipitation of the minerals is favourable.  These secondary deposits come in the form of re-crystallised sulphides or as oxides/carbonates and can be very high grade.

    What do they look like?

    On the surface, weathered massive or disseminated sulphide orebodies will form ‘gossan’. These are generally rusty coloured rocks with a rough, crinkly texture. Gossans can be very high grade, although metallurgically these metal oxide ores can be difficult to process. Massive sulphide ore is generally very heavy, formed of a mass of shiny suphide crystals, and will smell of suphur when hit with a hammer. Disseminated sulphide ore will have large numbers of shiny sulphide crystals within a matrix of the host rock (usually gabbro or altered mafic rock).

    An example of the various layers of a sulphide mineral vein, with gossan at the top (Credit: Bastian Asmus, Archaeometallurgy) 

    How are they found?

    The metal particles within the sulphide crystals are too small to find with the naked eye in streams or soils.

    Most of the oldest mines are sited where outcrops of gossan were discovered. Typically, the gossans were assayed for metal values. When these proved to be positive, drilling was conducted beneath the gossans to identify sulphide mineralisation below the level of oxidation. Usually, the oxides were not mined, due to the difficulty of extracting the metal.

    Although there have been some discoveries in very remote areas in recent times by finding the gossans, most exploration for magmatic sulphide ore bodies is now conducted by remote sensing for hidden orebodies.

    Before starting the search, geologists will select areas where a discovery is likely. These will be in areas where mafic/ultra-mafic intrusives are known to occur. Preferably this will be in association with a major structural fault along which intrusives from below the crust can migrate. 

    Soil sampling can identify metals coming to surface, whilst geophysical techniques can identify massive sulphide bodies at depth by testing the electro-magnetic signals of the ground being explored. This can be done by airborne EM surveys, which can cover hundreds of kms of survey per day and will typically identify conductors to 200 - 300m depth.

    EM conductors identified from the airborne surveys are then followed up by ground-based geophysical techniques to identify drilling targets. Depths to targets can be calculated and drilling can be conducted to investigate the anomalies. 

    How are they extracted? 

    Once a metal sulphide deposit has been identified, drilled out and a resource calculated; a feasibility study will be carried out to determine whether it can be mined economically. It will be decided how the deposit is to be mined; open cast or underground mining.

    During the mining operation, only the ore of a certain grade will be processed. The ore will then be crushed and milled to liberate the sulphides from the host rock (gangue). The resulting product will then undergo floatation which will separate the sulphides from the guague. The sulphides are then smelted to burn off the sulphur (usually captured), leaving a metal matte, which is then sent to a refinery where the economic metals are separated and extracted. The product is either sold at the matte stage or as a metallic product after refining.

    Author: Mike Moles

    Mike is the co-founder of Kavango Resources (LSE:KAV), where he is currently a non-executive director and responsible for exploration strategy in Botswana. He has 30 years of experience in mineral exploration in southern Africa and has formerly held senior roles at Delta Gold, Reunion Mining, and Lonmin.

  • As BMW drops Congolese cobalt, which firms might stand to benefit? (GEMC, FMC, KAV, ABM, PGM, HZM)

    Last month saw leading car maker BMW reveal plans to stop buying cobalt for its electric vehicles (EVs) from the Democratic Republic of Congo (DRC) in 2020/21. As it stands, the DRC provides around 60pc of the world’s cobalt supply, meaning the critical battery metal’s price is influenced heavily by the geopolitically unstable nation’s ongoing turmoil. With this in mind, could the promise of additional vehicle manufacturers following in BMW’s footsteps favour cobalt miners operating in more stable jurisdictions?

    Changing plans

    As reported by electrive.com, BMW board member Andreas Wendt announced the company’s plans to halt cobalt purchases from the DRC in an interview towards the end of March. He said the firm made its decision because cobalt demand has already decreased somewhat due to technical developments. It expects this dynamic to continue.

    What’s more, Wendt added that there remains ‘enough [cobalt] deposits that have not yet been explored’. As such, the organisation expects to replace its Congo cobalt supply with materials and resources from other jurisdictions around the world.

    The decision comes several months after BMW announced a collaboration with chemicals giant BASF, battery maker Samsung SDI, and development agency GIZ to improve cobalt mining working conditions in the DRC. The firms said that they were exploring ways to improve working and living conditions in areas where cobalt is extracted using manual labour.

    Companies with operations in the DRC are currently facing challenges in the areas of environment, health and safety, and human rights when cobalt is extracted through artisanal mining. This dangerous practice makes up around 15-20pc of Congolese cobalt production. There are also concerns around the use of child labour in the nation, while the cost of doing business has also increased thanks to a recent mining code change that saw royalty costs shoot up to 10pc.

    Market fluctuation

    Cobalt prices have staged a massive rally in recent years due to an anticipated increase in the use of EVs around the world. Given that around three-quarters of electric vehicle batteries currently contain cobalt, the market for the metal is expected to double over the next four years alone and quadruple by 2028.  To express this another way, 62pc of global cobalt demand is likely to come from battery manufacturers by 2020, up from 51pc in 2016 and 20pc in 2006.

    Despite the continuation of this long-term trend, prices of the metal have slumped recently. Indeed, they have fallen from $25/lb to $13.61/lb in the first three months of 2019 alone. This has been driven by numerous factors, including a slightly slower-than-expected uptake of EVs, a rush to mine as much cobalt as possible, and a change in subsidies in China - responsible for half of global EV sales.

    However, the price has arguably been most depressed by a large amount of new supply coming online from the DRC. The cobalt market’s current reliance on the country became clear in November when prices soared after Glencore abruptly halted sales of the metal from the country after discovering uranium at its key mine.

    If more carmakers were to follow BMW in cutting off their ties to DRC’s cobalt market, then it raises the question of where supply is going to come from – especially if EV demand explodes as predicted. Indeed, there are still very few companies operating as a pure play on the metal.  As it stands, 98pc of the world’s cobalt arises as a by-product of mining for other metals.

    Aside from the price increases associated with supply threats, this dynamic would make the cobalt assets held by junior miners outside of the DRC look more attractive to both buyers of the metal and larger miners. In this situation, many firms could stand to benefit.

    Key players

    One example is Global Energy Metals(TSX-V:GEMC), which is currently preparing to build upon its strong UK shareholder base by co-listing in London. The firm is developing a diversified global portfolio of cobalt assets, including project stakes, projects and other supply sources.

    The business’s flagship asset is the Millennium Project in the world-renowned Mt. Isa region of Queensland, Australia, where it executed the final agreements to take a 100pc interest last November. It is also in the process of acquiring an 80pc stake in two Nevada-based cobalt sites called the Lovelock Cobalt Mine and the Treasure Box Project. These are located just 150km east of Tesla’s Gigafactory. Finally, the business currently owns 70pc of the Werner Lake cobalt mine in Ontario Canada.

    Also building a foothold in the cobalt space within the Canadian market is Forum Energy Metals(CVE:FMC). Although the firm’s most prominent focus is on the uranium and copper markets, it has entered Idaho’s cobalt belt with the acquisition of the Quartz Gulch exploration property. Its goal is to discover near surface mineral deposits by both exploring its 100pc-owned properties and developing strategic partnerships and joint ventures.

    Another example is Kavango Resources (LSE:KAV), which listed in London last July. The business focuses on locating magmatic, massive sulphide orebodies in Botswana, with a particular focus on a 450km-long magnetic anomaly called the Kalahari Suture Zone (KSZ).

    Last month, Kavango revealed that the first hole drilled at its Ditau prospect in the KSZ had encountered a 200m zone of intensely altered rock holding a 70m area containing significant sulphide alteration. This presented indicative cobalt values of up to 0.9pc and a weighted average of 0.2pc cobalt alongside elevated copper, zinc, lead, and nickel values. The company called the result ‘extremely encouraging’ and ‘suggestive of mineralisation at depth’.

    Another firm looking to increase its battery metal exposure is African Battery Metals (LSE:ABM), which recently returned to trading with a refinanced balance and new management team after a period of difficulty. The firm, which is now led by industry veterans Paul Johnson and Andrew Bell, owns cobalt-prospective in the Cameroon and Côte d’Ivoire as well as the DRC. It is also on the hunt for new opportunities as it looks to take advantage of today’s poor funding climate for vendors.

    Other outfits with exposure to cobalt include Phoenix Global Mining(LSE:PGM), which holds two prospective cobalt properties in Idaho, and Horizonte Minerals (LSE:HZM), which owns Vermelho nickel-cobalt project. Names such as Greatland Gold (LSE:GGP), IronRidge Resources (LSE:IRR), Keras Resources (LSE:KRS), and Mkango Resources (LSE:MKA) also have exposure to the metal in their portfolio.

    The tactic of using battery metals to get exposure to the ‘EV boom’ is likely familiar to investors by now, given the unavoidable hype that has surrounded the sector for some time. However, if BMW’s decision to ditch the DRC catches on it could provide an exciting, fresh twist to the narrative that may work in favour of many of the businesses mentioned above.

    Author: Daniel Flynn

    The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    The Author has not been paid to produce this piece by some of the companies mentioned above.

    Catalyst Information Services Ltd, the owner of MiningMaven.com, owns a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    Catalyst Information Services Ltd, the owner of MiningMaven.com, has been paid for the production of this piece by some of the companies mentioned above.

    MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy. 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.

  • Kavango announces identification of multiple drill targets for ‘world-class mineral deposits’ in Botswana (KAV)

    Kavango Resources (LSE:KAV) rose to 2.4p on the offer today as the company announced it has identified several high-quality drill targets at its prospective Kalahari Suture Zone (KSZ) project in Botswana. With the news marking yet another step towards the recently-listed business potentially locating what it describes as ‘world-class mineral deposits’, could this weakness provide an exciting buying opportunity?

  • Kavango hits on major geological formation with world-class nickel-copper-PGM potential (KAV)

    Main market-listed Kavango Resources(LSE:KAV) has a secret hiding under trillions of tons of rock in Botswana.

    And something rather interesting cropped up in its full year results to 31 December 2019, published on 26 May 2020.

    The company has a huge license area totalling 5,573km2 across the Kalahari Suture Zone (KSZ) in the south west of the African nation.

    CEO Michael Foster noted how the region continues to show considerable potential for the discovery of world-class base metals deposits.

    “Kavango has gathered more exploration data on the KSZ than any other company. Over the coming months we expect to make significant progress in validating our view that the underexplored KSZ is host to world-class copper-nickel-PCM deposits.”

    “In addition, we are nearing completion of our first farm-out by selling a 51% interest in the Ditau project,” he said.

    Power up

    Ditau covers 1,386km2. At its centre are ten vast geological formations known as ring structures, many kilometres across. Ring structures are widely associated with the presence of volcanic carbonatites, the primary source of rare earth elements (REE).

    On 15 April 2020 shares in partner firmPower Metals(LSE:POW) rocketed when it announced it had agreed to buy the stake in Ditau to target “highly prospective” REE deposits. Rare earth elements are critical for manufacturing numerous high-tech applications, including electric vehicle motors and batteries.

    Kavango has also added to its portfolio in the Kalahari Copper Belt, where two new mines are being developed.

    But excitement is growing here for another reason.

    Kavango Chairman Douglas Wright writes: “Our primary goal in the coming months is to deepen our understanding of the KSZ project and identify future drill targets.”

    This deeper understanding is what I want to focus on today. 

    Underground: watch this space

    50 years ago, an important Canadian nickel-copper producer called Falconbridge was working in the Kalahari Suture Zone. Its scientists were convinced that south west Botswana held the key to vast deposits of undiscovered diamonds that could make fortunes and transform world markets.

    Excitedly drilling target holes, the scientists were disappointed to find absolutely barren rock. It didn’t seem to make sense. Running out of money, the Canadian company was forced to abandon the site and leave perplexed.

    Using much more precise instruments, a new hypothesis has been formed. And it’s good news for Kavango’sshareholders.

    Advances in geological mapping since the 1970s, including 3D computer modelling, have revealed that, far from being barren, in fact, the opposite is true.

    Wright notes: “There is now a large body of evidence suggesting that the accumulation of nickel and copper-bearing metal sulphides occurred within the high level gabbroic intrusions of the KSZ.”

    What really happened

    Kavango began drilling at the KSZ in October 2019, beginning with three target holes across 1,000m.

    The point of the campaign was to identify high-potential targets in what are known as underground traps. It is these traps that so confused the Canadian scientists back in the 1970s.

    Drilling confirmed the presence of an extensive magma plumbing system. This is a feature of established nickel-copper-PGM deposits in some of the largest and most profitable mines in the world, including Norilsk in Siberia, Canada’s Raglan and Voisey’s Bay, and Jinchuan in China.

    This magma plumbing system had filtered molten magma, carrying dense metal sulphide liquid through a series of vertical and horizontal fissures. Because metallic elements are heavier than the surrounding rock, they accumulated and solidified in underground traps further below the surface.

    Kavango believes — backed by the latest science — that these underground traps contain intensely concentrated metal deposits just waiting to be exploited.

    In the next stage of its exploration Kavango will drill and test trap zones in the plumbing systems that lie within 300m of the surface. And initial drill samples are being sent to the University of Leicester for mineralogical and petrographic testing.

    Then the main task is to combine Kavango’s data from extensive analysis, which includes airborne electromagnetic surveys and soil geochemistry, together with gravitational surveys in the public domain.

    And 3D computer modelled reports to confirm their theory will be prepared across Q2 and Q3 2020. No wonder that chief executive Michael Foster says Kavango are looking forward to an “exciting programme” of exploration in 2020.

    Author: Mark Sheridan

    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 own 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

     

     

  • Kavango hits record high as second Ditau drill hole hits large zone of ‘intensely altered rock’ (KAV)

    Kavango Resources (LSE:KAV) sat at an all-time high of 4p on Thursday after revealing additional ‘extremely encouraging’ drilling results at its Ditau prospect in Botswana. The £6m firm, which was trading up 8.1pc as at writing after leaping 16.4pc on Wednesday, said its second hole at the site had intersected over 320m of intensely altered Karoo sediments above a gabbroic intrusive.

    Ditau is part of Kavango’s KSZ project in south-west Botswana, where it is exploring for copper, nickel, and platinum group elements (PGEs) rich sulphide orebodies along a 450km-long magnetic anomaly. According to the firm, the area covered by its KSZ licences displays a geological setting with distinct similarities to that hosting the world-class for copper, nickel, and PGEs orebodies in Siberia.

    In Thursday’s update, Kavango said its second hole at Ditau, called DitDDH2, was finally stopped at a depth of 557.34m, offering good core recoveries and minimum deviation. Kalahari sands and sediments extended to 40m, while Karoo sediments continued for a further 438m until an intrusive was encountered at 478.55m.

    The business added that geological logging and preliminary geochemical analysis has shown that the 320m zone of intensely altered rock was intersected before hitting the intrusive. Half core from this zone has been cut and sampled at 1m intervals and sent to Australia for assay.

    Although Kavango cannot yet determine indicative values for gold, silver, and PGEs, it said initial results suggest elevated values for cobalt, zinc, nickel, and copper. Meanwhile, it added that the core also appeared to contain high levels of rare earth elements. The organisation will assess further drilling plans once it has received and interpreted assay values.

    Kavango added that Thursday’s zone of intensely altered rock was similar to that encountered at its first hole – DitDDH1 – back in March. This met a 200m zone of intensely altered rock above the conductive drill target.  It also showed significant sulphide alteration together with indicative cobalt values of up to 0.9pc and a weighted average of 0.2pc cobalt over 70m as well as elevated copper, zinc, lead and nickel values.

    On Thursday, Kavango’s chief executive Michael Foster said: ‘We are extremely encouraged that the geophysics, geochemistry and the initial drilling which we have now completed at Ditau have been very successful in predicting a prospective hydrothermal system under complete cover.’

    He added that the extensive system displays essential ingredients for one or more mineral deposit. These include intrusives for heat and metal source, receptive overlying sediments with accompanying alteration, and anomalous metal values.

    ‘Assays are eagerly awaited and will be announced to the market as soon as they become available. The Company will then be in a position to compile a 3-D model, with the extensive information we now have, to understand fully the potential of Ditau,’ he added.

    Kavango’s co-founder Mike Moles recently authored a piece for MiningMaven on how these copper, nickel, and platinum group element-rich sulphide orebodies occur and why the firm is keen to locate them.  To read it, please click here.

    Author: Daniel Flynn

    The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    The Author has not been paid to produce this piece by the company or companies mentioned above.

    Catalyst Information Services 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 Catalyst Information Services Ltd are not responsible for its 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

  • Kavango jumps on fresh evidence of major Norilsk-style deposits in Botswana

    Shares in AIM-listed Kavango Resources (LSE: KAV) bounced to new yearly highs on the release of a new report confirming Norilsk-style deposits in the firm’s Botswana territory.

    Kavango shares surged 15% in early Thursday trading.

    Core samples taken from a 2019 drill programme in the highly-prospective Kalahari Suture Zone show the rock and mineral composition closely matches that of Norlisk in northern Russia. 

    These results are “an important step forward for the company”, Kavango CEO Michael Foster said. 

    The company is now selecting targets for ground-based low frequency electromagnetic survey, to be carried out as soon as Covid-19 restrictions are lifted. 

    Norilsk deposits host some of the world’s richest mineralised zones of copper-nickel-platinum group metals. The polar mine accounts for 50% of the entire global production of palladium, 20% of its nickel and 20% of the world’s platinum. Reports suggest the Siberian production has enough resources to continue working for another 50 years. 

    Testing success

    Despite the difficulties of the lockdown in Botswana, the company couriered its samples to Johannesburg in South Africa for initial analysis, then forwarded them on to independent consultant Dr Martin Prendergast in Scotland for interpretation. 

    Dr Predergast tested the Kavango samples and confirmed two additional shared characteristics. They include cumulate rocks and crucially, sulphide liquid fractionation. 

    AnApril 2020 report by Leicester University’s Dr David Howell confirmed the presence of 10 geological features found in Kavango’s Kalahari Suture Zone. These are associated with economically viable magmatic sulphide deposits. 

    This is further evidence of huge upside for the company’s 2020 drilling programme. 

    Now geologists know that the massive zone also features sulphide liquid fractionation and cumulate rocks, it adds more power to the Norilsk comparison. 

    Dr Prendergast’s report is now on its way to Dr Howell for further interpretation and review. 

     

    Author: Mark Sheridan

    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, owns a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    MiningMaven Ltd, the owner of MiningMaven.com, has 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

     

     

     

  • Kavango receives Ditau assay results as it positions for asset farm-out (KAV)

    Kavango Resources (LSE:KAV) fell 6.3pc to 3.75p on Thursday morning as it revealed that it had taken another step forward in the drilling of its Ditau Camp prospect Botswana.

    The £6m exploration firm said it has now received assay results for two holes drilled earlier this year at the prospective site from a business called Genalysis Laboratories in Australia. Genanalysis assayed a total of 489 core samples prepared by Intertek Laboratories in Johannesburg for 65 elements. It then carried out 12 duplicate check assays, ran 14 control standards and 14 blanks during the assay run.

    Having received the assay results, Kavango is now undertaking its own program of checks and duplicates at an independent laboratory as per standard industry practice.

    Ditau Camp forms part of Kavango’s KSZ project in Botswana, where it is targeting the discovery of world-class mineral deposits at depth using industry-leading drilling and sampling techniques. The prospect is underlain by magnetic and gravity anomalies that suggest a 7km x 5km intrusive body at depth. The alteration zone was discovered using ground-based geophysical techniques.

    In Thursday’s update, Kavango’s chief executive said: ‘We are pleased to have received the assay results from the two drill holes at Ditau. Kavango is now completing its own check assays at an independent laboratory in South Africa, which is normal industry practice. We will then be in a position to fully check, assess and interpret the results so as to formulate our plans for Ditau.’

    He added that Kavango’s preferred option would be to farm-out Ditau Camp to an industry partner due to its size and the firm’s ongoing, primary focus on the Kalahari Suture Zone (KSZ) structure in south Botswana. Drilling is expected to begin at the 450km-long magnetic anomaly, on which the majority of Kavango’s 15 prospecting licences sit, later this year.

    Kavango is exploring the trend for copper, nickel, and PGE-rich sulphide orebodies. Despite the area displaying a geological setting with distinct similarities to that hosting the world-class Norilsk Ni-Cu-PGE orebodies in Siberia, it has not previously been explored using modern techniques.

    Thursday’s news comes just several days after Kavango announced that it had acquired a new prospecting licence at Ditau. The new area covers 916.4km2 to the south-west of the organisation’s existing licence and includes the extensions of the Ditau geological and geophysical structures that have potential for base metal mineralisation. In a statement, Foster said that Kavango felt that the new licence could be ‘instrumental in the farming-out of Ditau.

    To read our recent investor Q&A session with Kavango Resources’ chief geologist Mike Moles, please click here.

    Author: Daniel Flynn

    The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    The Author has not been paid to produce this piece by the company or companies mentioned above.

    Catalyst Information Services 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 Catalyst Information Services Ltd are not responsible for its 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

  • Kavango Resources – On the road to another Norilsk in Botswana? (KAV)

    The Norilsk nickel mine sits high in the Russian Arctic plains, 1,700 miles northeast of Moscow in the permafrost of the Taimyr Peninsular.

    Here, in the Arctic Circle’s second-largest city, virtually all of Russia’s copper and Platinum Group Metals (“PGMs”) are produced. Not only that, but this polar mine accounts for 50% of the world’s palladium, some 20% of its nickel, 20% of all platinum, over 10% of the world’s cobalt, and 3% of all copper mined globally.

    This staggering production rate won’t slow down any time soon. Recent reserve estimates suggest Norilsk’s current output rates can be maintained for upwards of another 50 years. This is thanks to 500 million tonnes of probable PGM ore reserves, including 6 million tonnes of nickel, 9 million tonnes of copper, 62 million ounces of palladium, and 16 million ounces of platinum. 

    For an idea of just how valuable this mine is, consider that Norilsk’s largest shareholder is one of the richest men in Russia.

    Oligarch Vladimir Potanin swooped in for a 34.5% stake in MMC Norilsk Nickel Ltd (Nornickel) when it was privatised by the Russian government in 1995. His net worth is now reported to be close to $24 billion.

    That’s a lot of money, but it’s not just Potanin basking in Norilsk’s riches. According to the Financial Times, Norilsk has generated the highest shareholder return of any large diversified miner over the last five years. As of 2020, the company has a market value of over $40 billion - nearly twice that of Anglo American (LSE:AAL), and $10 billion more than Glencore (LSE:GLEN).

    How exciting, then, that Kavango Resources plc (LSE:KAV) is exploring a project that could rival the best of what Norilsk has to offer.

    Kavango chief executive Michael Foster has repeatedly described the company’s targets here as “highly attractive”. However, those in the know would say that this is quite the understatement.

    Kavango holds 12 prospecting licences across the KSZ and the adjacent Ditau Project in a huge, near-7,000km2 area.  Prof. David Holwell of the University of Leicester, a world authority on magmatic sulphide deposits, describes the KSZ as “a prime setting for a magmatic Ni-Cu-PGE deposit.”

    Kavango is hard at work targeting nickel-copper-platinum-group-element deposits across the 450km length of the KSZ.

    Fig. 1. Kavango’s 3 areas of exploration

    Foster is keen to draw the Norilsk comparison for one precise reason: it’s backed by geoscience.

    The same black, granular intrusive rock that hosts Siberia’s vast metal deposits – known as gabbro - is found under the Botswana sands, exactly where Kavango is drilling.

    “We believe the results from our 2019 drilling in the KSZ have brought us closer to confirming a Norilsk-style ‘plumbing system’ through which significant quantities of metal sulphides were transported,” Foster explains.

    Copper-Nickel-PGM deposits can accumulate in vast underground ‘traps’ — as molten metal-sulphides filter down through the cooling silicate magma. As at Norilsk, these accumulations can form huge ore bodies over a prolonged period of magma flow, which appears to be the case on the KSZ.

    One of the most important results from the drilling and rock sampling by Kavango to date has been the confirmation that most of the gabbroic magma intruded into sulphur-rich coal shales.

    Why is this key?

    It tells Kavango’s geologists that the sulphur content of the magma would have increased due to the incorporation of sulphur rich coal shales into the melt. Therefore, more of the valuable metals (Nickel & Copper) would have combined with the sulphur to form sulphide accumulations.

    Magmatic sulphide specialist Dr Martin Prendergast examined the geochemistry of the gabbro samples and concluded that the silicates seem to have “lost” metals during the crystallisation of the magma whilst the ratios of Cu/Zn and Cu/Pd strongly suggest that “sulphide saturation” would have occurred leading to the formation of metal sulphides. The location of these sulphide deposits are relatively simple to confirm in geophysical surveys because they conduct electricity so easily.

    In Kavango’s recent Mineral Systems Review by Prof. Holwell it is suggested that large volumes of metal sulphides including copper, nickel and platinum could be found in trap zones associated with gabbro dykes (vertical) and sills (horizontal).

    If this is correct and the accumulations are close enough to surface to mine economically, it will then be a case of identifying the location of these deposits with ground based geophysical surveys and obtaining samples of the mineralisation.

    With so much ground to cover this is obviously a big job for Kavango, but the potential rewards are huge.

    If the company is successful and identifies commercial metal deposits then this will be transformational for the company’s stock price. This will be the main focus of Kavango’s exploration efforts well into 2021.

    Fig.2. Diagram showing how metal sulphides can accumulate within sills and dykes as the gabbroic magma ascends towards the surface. (After Barnes et al 2015)

    Wider Exploration Potential in Botswana

    It’s no surprise that fellow junior mining exploration companies are now following Kavango into Botswana.

    Notably, shares in Power Metal Resources (LSE:POW) rocketed 50% in a day in April when the London explorer announced the acquisition of a 51% stake in Kavango’s Ditau Project located 70km east of the KSZ.

    At Ditau, Kavango has been focussing on 10 or so “ring structures” identified from airborne magnetic surveys, which the company believes should contain “carbonatite” lying beneath about 70m of Kalahari Sands

    Carbonatites, are intrusive/extrusive volcanic bodies whose geochemistry is dominated by calcium or magnesium carbonate. Significantly, carbonatites represent the leading source (almost the only source) of rare earth elements (REEs). REEs are becoming increasingly important in high tech applications, particularly in the manufacture of batteries and lightweight magnets used in the motors of Electric Vehicles.

    At the time of the acquisition by Power Metals, chief executive Paul Johnson said the purchase offered “a great deal of promise for highly prospective” targets of carbonatite magmatism.

    Across these targets, the Kavango/Power Metal Joint Venture hopes to discover economic deposits of REEs as well as niobium – a ductile metal used to create heat-resistant superalloys for jet engines. 

    Just 25km to the north of the project area, three carbonatites were discovered by Falconbridge Exploration in the 1970s.

    One of these was reported to contain high grades of Niobium.

    Once the Covid-19 lockdown is over, the JV partners plan to carry out orientation surveys on the Falconbridge carbonatites before undertaking an exploration exercise to identify carbonatite within the ring structures. Once carbonatites have been confirmed, shallow drilling will be employed to test for REEs and other economically viable minerals.

     

    Rising demand paints a positive picture for Copper, Nickel, REE and PGM producers

    As Kavangopushes forwards, demand for rare earths and PGMs is also soaring. More and more of the world’s technologies are coming to rely on these highly sought-after minerals

    Increasing quantities of palladium are being sought by world’s carmakers, who use the rare metal to manufacture green catalytic converters. Meanwhile, rare earths are critical in everything from medical equipment and electric car motors to lithium-ion batteries, computer hard drives, solar panels, and wind turbines.

    The net result has been a surge in prices over recent months. Palladium soared to record highs above $2,795 an ounce in January 2020.  Spot prices have remained at 25-year highs in spite of the Covid-19 pandemic.

    The reason?

    Auto manufacturers are struggling to find new suppliers and tough new emissions standards have come into force around the globe.

    Nickel, meanwhile, has jumped 18% since March.  A large driver here has been an export ban on the commodity in Indonesia – one of the world’s leading suppliers.

    So, while prices of key metals take off across the globe, and Kavango finds precisely the same underground structures that made billionaires of Norilsk investors, the company now has a huge opportunity to match this exploration potential and enrich its early investors.

    Author: Mark Sheridan

    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, owns a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

    MiningMaven Ltd, the owner of MiningMaven.com, has 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

     

  • Kavango Resources – searching for Rare Earth Elements as sector approaches critical transition period (KAV)

    Forecast soaring demand for Electric Vehicles (EVs) threatens to end China’s decades-long tight hold over the Rare Earth Elements (REEs) market. As the world’s largest producer of REEs, accounting for more than 90% of global supply, China has used its dominant position to control prices. This has given it a crucial strategic advantage in international trade negotiations, not least as more and more nations seek to transition their economies towards “green” vehicles. However, this increased demand could prove to be a double-edged sword for the Chinese. While the demand has worked in China’s interests over the short-term, it has also caused mining exploration companies to seek out alternative sources of these valuable commodities. One company joining this hunt is Kavango Resources (LSE:KAV), as it pushes forwards with its Ditau Project in Botswana.

    A crucial group of elements

    Rare Earth Elements (REEs) are a series of 17 chemical elements found in the earth’s crust. The metals are applied primarily to increasing the efficiency of many technologies due to their unique magnetic, luminescent, and electrochemical properties. Their uses include everything from cutting weight, emissions, and energy use to enhancing performance and thermal stability in sectors ranging from consumer electronics to transport and defence.