Power Metal Resources (LSE:POW) and Kavango Resources (LSE:KAV) are to begin exploration on the Kalahari Copper Belt (KCB) in Botswana, where they are targeting a large copper-silver discovery.
Their 50:50-held KCB Joint Venture operates in a well-known area of newly-discovered sediment-hosted copper deposits that are now being developed as fully-fledged mining operations.
Chief executive Paul Johnson said the plan is to follow an “efficient, disciplined, and methodical approach” designed to build a geological model of the license area that can be tested swiftly through drilling.
Exploration will focus on soil sampling and geophysics to identify “dome structures” that are known to host potential copper deposits regionally. The JV will then quickly move on to test drilling of shallow targets.
Kavangoand Power Metal’slicenses, PL036/2020 and PL037/2020, cover 1,294km2 immediately south of Botswana district capital Ghanzi. Here, they are surrounded by several hugely significant copper discoveries made in recent years.
Both are along strike west of Australian mid-tier miner Sandfire Resources (ASX:SFR), which is already working in the region on T3 and A4 dome-hosted copper-silver discoveries.
Meanwhile, Cupric Canyon Capital’s world-class copper and silver mine Zone 5 also sits in northwestern Botswana. This private firm raised $565 million in 2019 to develop its Khoemacau project. and its annual production is expected to exceed 63,000 tonnes of copper and 1.9 million tonnes of silver.
ASX-listed miner MOD Resources was working on a similar high grade copper-silver project nearby called T3 before it was snapped up in a £93 million takeover by Sandfire in October 2019.
News that exploration will get underway is the culmination of years of hard work by both Power Metal and Kavango to understand the region and the metals these structures hold.
The Kalahari Copper Belt extends a vast 1,00km-by-250km from northeast Botswana into central Namibia. Both countries are safe, mining-friendly jurisdictions.
And as The Economist noted recently, copper prices have been rising in tandem with gold, an unusual state of affairs during a period of manufacturing slowdown. As gold rose towards $2,000 per ounce, copper surged to a two-year high of over $6,500 in July 2020.
Economic downturns usually result in a predictable decoupling in the prices of the two metals. As gold climbs with investors seeking a safe haven, copper tends to dip as construction projects fall away. The steep shock caused by the Covid-19 pandemic did see copper prices drift from a peak of $6,300 per tonne in January to just over $4,700 in March. But despite lockdowns covering most of the western world, the price of copper did start climbing again and has continued this general trend into the latter half of the year.
With copper now behaving much more like gold, Power Metal Resources and Kavango Resourcesare perfectly placed to take advantage.
Johnson added: “Power Metal is seeing a number of its projects launch exploration programmes and it is particularly positive to see the expeditious launch of exploration at the KCB JV in Botswana.”
Author: Mark Sheridan
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