PGMs

  • Exploration veteran John Lauderdale heads up transformational change at Kavango Resources (KAV)

    Kavango Resources (LSE:KAV) is one of this year’s few success stories in the small cap exploration space.

    As the wider market has seen across the board declines in share prices of 30% to 50%, plucky Kavango’s stock has more than doubled. Excitement about the company’s drilling campaign in the Kalahari Suture Zone (“KSZ”) has certainly attracted investor interest, but there is much more happening on the ground in Botswana that points towards a bright future for this ambitious firm. Last week’s operational update is a perfect case in point.

    A key part of for any company working to fulfil its promises is to ensure it has the right expert team members in place. For an exploration company, the quality of boots on the ground is essential…

    Enter John Lauderdale, Kavango’s recently appointed Group Consulting Geologist.

    New to the company, but certainly not to the exploration world, Lauderdale brings a wealth of experience to the firm that will help it greatly as it moves into its next exciting phase of growth.

    Here, Lauderdale talks Mining Maven through his history before joining Kavango, and how he believes his experiences can benefit the company’s established operations in Botswana.

    Strong pedigree and belief in Kavango’s potential

    Lauderdale, a well-travelled industry veteran, has been working in Africa since 1984, shortly after graduating from the University of Bristol.

    Over a celebrated career, he has worked in almost every country in the continent, from Morocco to South Africa, as well as also spending time in South America.

    So, when someone with that much experience in minerals exploration describes the Kavango’s KSZ project as “potentially absolutely mind-blowing” – it’s certainly encouraging.

    In fact, as Lauderdale himself puts it:

    “The KSZ project could be a real company maker. There are some extremely good indicators already, but now Kavango needs more data, and that’s where the drilling program is going at the moment.”

    Given his experience, Lauderdale is the perfect individual to guide Kavango as it continues to build up this picture.

    Indeed, highlights of his career before joining the company include making the decision to “peg all the ground around the Gecamines holdings”when he was exploration manager at African Minerals.

    African Minerals is a Central African subsidiary of the Ivanhoe Group, and the area around Gecamines is where the world-class Kamoa copper-cobalt discoveries were made.

    Alongside this, Lauderdale also spent time running exploration programs for ENRC Group in Congo – a very efficient period where his small exploration team “drilled 250,000 metres in around two and a half years”.

    Bottom line is, the lessons learned from these sorts of massively successful exploration projects will be extremely useful to Kavango as its investigation of the KSZ continues.

    As Lauderdale himself highlights, the numerous and varied exploration programs he has run across Africa give him a wealth of insight that he can bring to his new role:

    “I’ve done everything from tiny little operations the size of a wheelbarrow, designing exploration programs for guys who can’t afford a drill rig, right through to FTSE 100 companies with a $40 million to $80 million a year budget. Over the years, I’ve covered pretty much all of the kinds of projects that Kavango is looking at.”

    Pushing forward in the Kalahari Copper Belt and at Ditau

    Particularly relevant to Lauderdale’s new role is his previous work conducting exploration on the Central African Copper Belt.

    This fits perfectly with Kavango’s growing project areas in the Kalahari Copper Belt (“KCB”). The KCB is an almost 1,000km mineral belt where, similar to the Central African Copper Belt, copper mineralisation is hosted in a sedimentary basin or rift.

    A sedimentary basin is an area of the Earth’s crust where subsidence (when the Earth’s surface sinks) is dominant, causing sediments to accumulate. Rift-type basins occur at the boundaries of tectonic plates that are moving apart from each other.

    Lauderdale “spent a long time on the Central African Copper Belt doing exploration”,and notes that many lessons learned on the Central African Copper Belt “have been directly applied to the Kalahari Copper Belt with great success”.

    Another key relevant area of Lauderdale’s experience applies to Kavango’s Ditau Camp Rare Earth Elements Project, located in south west Botswana and part of an equally owned joint venture (“JV”) with Power Metal Resources (LSE:POW).

    You see, Ditau focuses on carbonatites – a type of rock and the principal source of rare earth elements that are a particular interest of Lauderdale’s, thanks to his early work in Zimbabwe.

    During this time in his career, he identified two carbonatites while working as a regional mapper for the Zimbabwean government. Since then, he says, he has “always been interested”in the formations since that’s how his career in Africa began.

    Of course, Lauderdale has come a long way since then.

    In that time, he’s learned the value of “doing something real” by creating value not just by looking for minerals but also in terms of human capital.

    In the DRC, for example, Lauderdale ran exploration programs for ENRC Group back when it was a FTSE 100 company. He explains that it was the tight-knit and hard-working nature of his team there that delivered such quality results:

    “We ran a very small exploration team but we had 28 rigs. I think we drilled 250,000 meters in about two and a half years. The team was, if I say it myself, extremely well run, and we converted a lot of the historical resources into reportable resources for the Stock Exchange.

    “We also found a new style of nickel mineralization, which, as it turned out, was very similar to something that had been located by First Quantum Minerals, in the Northwest Province of Zambia. We had a very, very good exploration team. It was small and the guys worked their socks off.”

    Primed for success…

    Lauderdale’s drive to create value in a real, tangible way definitely suits Kavango.

    After all, this is a company with a portfolio of potentially world-class metals exploration projects in Botswana, one of the Africa’s most favourable jurisdictions for doing business. Lauderdale’s experience makes him the perfect person to help see Kavango through to making one or more major minerals discoveries.

    As Lauderdale himself sees it, his role is to design programs that ultimately find what the company is looking for on the ground – not just at the KSZ but also in the KCB and at Ditau. As he says:

    “I know where we want to try and get to, I know what the bigger picture is, and then it’s really designing the steps to get there.

    Successful exploration requires proper planning, hard work and discipline. Ultimately the rocks are the rocks, but it is our job to zero in on the most prospective zones and prepare those for drilling as quickly as we can. We have a huge amount of ground to cover, which presents both a considerable challenge and great opportunity.  

    I’m really excited to have joined a company as ambitious as Kavango, which has both the vision to make large-scale discoveries and to become an active investor in Botswana itself. This last point is really important and I hope to make a meaningful contribution to our future success.”

    With someone of Lauderdale’s calibre now in the field, Kavango’s shareholders can expect to see the company make significant strides forward in the coming months. With eagerly anticipated drill results to come from the KSZ and then likely drilling in the KCB and then Ditau, there is plenty of upside left in the company’s stock.

    If Lauderdale’s enthusiasm is matched by success on the ground, Kavango’s shares could well break out to new all-time highs. 

    Author: Anna Farley

    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 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 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.