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I think if I was in charge I would focus our drilling on the KCB for a bit. Drilling the KSZ is relatively expensive and relatively high risk, which is not ideal in our current situation of no partner and low share price. I don’t think it will be long before we have Mindea back in the field lining up that B1 conductor, but it would be nice to have a share price boosting discovery in the KCB and/or a partner first
CT - just listened to it and it has generated some mixed feelings for me. However, I do appreciate that BT has been more direct/transparent in his comments, after previously only really hinting about this. It certainly does now sound to me like they CURRENTLY have NO firm intention, let alone are planning, to return to the B1 conductor at this moment time. Rather, they are going to do some further TDEM work there, and get some more input from Hornsey, and afterwards, the BOD will sit down and decide the strategy.
During the interim period, BT will be focus most of his time on finding a JV partner for the KSZ. After being in talks with various parties over the last year or so, who have consistently said to KAV: 'this is all very interesting, but come back when you have something concrete/interesting to show us', is this 300 page report really going to be a game changer when it comes to attracting previously non committal/sceptical companies to come on board? Will KAV be able to attract a major at this early proof of concept stage, or is it more likely they will have to make do with another junior explorer, who is looking to add an exciting sounding project to its portfolio? Time will tell, but that is another concern, how much time might this JV search take?
IMO, there is also a risk to the JV strategy, which is that if they don't find a JV partner, in a timely fashion, after focussing all this effort on securing one, does that failure potentially then become a bit of an 'elephant in the room' when it then comes to future attempts to talk up the potential at the KSZ/B1 conductor. It then all sounds a bit more hollow, and harder to believe, to know that several companies might have taken a look at said 'no thanks'. There is also a part of me that is already thinking: what the heck, after all the bullish talk about the B1 conductor, after one 'failed' attempt, you've now got the jitters, as an exploration company? Not good messaging that either.
Overall, it does seem to me that, for the short to medium term at least, KAV are going to switch focus towards the KCB, and the KSZ is now seemingly 'parked' pending a JV, or KAV regaining their conviction. Does this mean that we now have to think of KAV as mainly a 'copper play' for the foreseeable future?
Legalwolf - you were right to think there has been some worry about drilling B1 and not finding anything, Ben says as much in the new Stockbox interview. And as I thought, it sounds unlikely they will drill this year. Hopefully we have some KCB drilling to look forward to in the meantime.
Listening to the Stockbox interview where BT emphasied that he would be spending "most of my time" on seeking a JV partner and his latest KSZ email missive (how much longer exploration takes, than he first thought):
"Without doubt, it’s taken longer than I would have hoped to get where we are now, but my word, I’m so pleased we’ve taken our time and done things properly......We can seek out new partners with real confidence, we can show that we’re serious about what we can do, and we can be confident, truly confident, in the prospective systems we’ve uncovered."
it may well be that his 11 day trip to JNB and Botswana includes some focus on potential JV partners - now that he is armed with a 300 page report too!
Must be excitement about his trip - latest email out to shareholders is half way back to that famous reference to the Kama Sutra Zone.
Have a nice relaxing flight knowing that some great people have contributed to you reaching Johannesburg safely :-).
https://mobile.twitter.com/Ben_Turney/status/1560336480643465216
Bozi - yes, I agree with your thinking. KCB next, and then see what materialises with the KSZ. It looks to me like that is the order that KAV will take as well. But I do feel that the stakes are high now, in that a 'disappointing outcome' at KCB will represent a hatrick of successive campaigns that have not produced the instant goods. So despite our desire for them to get out their and start drilling at KCB, it's probably just as well that they are taking their time with the current optimisation work.
I hear you Legalwolf.
Personally, I think we've done loads of work on the KSZ now, and varied work at that. We've got the various reports that deliberate on our findings and make recommendations for future activity.
Now it's time to move to the project of least (but still some) technical risk. Cobre should be a timely reminder of the upside case.
It's possible of course that the KCB doesn't yies the discovery either, in which case I think we have to take stock and admit that we've tested 3 very prospective areas in Botswana and haven't hit the bullseye. That's why we're an £8/9m market cap, with all the potential to the upside.
In the event that our ground is mineralised then everything the company has done from a corporate side to date comes back into view, i.e. the warrant bank and the runway to shareholder value for virtually everyone.
Agree D220.
Making a significant discovery in the KSZ strengthens our hand infinitely.
You also have to throw into the mix the options that KAV will undoubtedly have, if they make discoveries at either the KCB or at B1. As I understand it, KAV are currently budgeted for the next drilling campaign at BOTH of these projects, with much change to spare. A significant discovery at either would lead to a share price that is multiples of where it is now and the likelihood of a JV partner for the discovery. Under such a scenario, it might then open up the possibility of KAV going after some targets in the wider KSZ themselves, and free up its budget to do just that?
Anyway, I can see why the BOD are spending a lot of time thinking through strategy.
100% with you D220.
I would rather KAV drill the B targets first then JV if successful.
As Legalwolf says there is a risk in doing that, if they don't hit mineralisation on the B targets. That said while I accept that risk is present we know KAV have done all the right exploration and that includes POC drills and DHEM. KAV have a much clearer understanding and it's all showing all the right things for it to be one or several mineralised conductors.
I think it's absolutely the right thing to use this report and NDAs to progress discussion with JV partners but hope KAV retain their justified confidence and drill the B conductors first for the best possible deal.
Obviously this won't be the view of everyone, but I hope that's how it plays out.
Just have to let KAV to continue to progress and inform us all as it does.
I think provided they don't hit technical issues with the drill then the JV options could/will be significantly more favourable after we drill.
Atb. Have a good day all
I REALLY want KAV to have made a definitive discovery before they start doing any JVs. More risk but more upside...
Legal, that thought has crossed my mind too, and I remember the interview you are referring to. It's certainly a risk. From the conclusion of the report: "Contact metamorphism of carbonaceous stratigraphy has been observed in drill core to upgrade carbon to moderately conductive graphite. Although the observed conductivities are too low to explain modelled TDEM conductors, target discrimination should consider potential for non-sulphide conductors." A cautious assessment, but KAV have reported very high readings... it's a gamble, but one that needs to be taken sooner or later. Will a JV partner want to jump in now, or wait and see?
CT - I sometimes think that KAV are equally worried about drilling the B1 conductor and not finding anything of note. Which outcome might make then put a dent in their hopes of finding a JV partner. There was an interview from BT from a couple of months ago where he spoke about the risks of KAV going after their best targets and not finding anything.
Despite saying I wouldn't buy more here, I have just had another 500k shares at 1.91p for a family account. I'm calling bottom here!
Which is probably the kiss of death!
If KAV are still super-confident about B1, I suppose they would prefer to drill it themselves. This way, they can make a discovery and give themselves a much stronger bargaining position. The report outlines a lot of potential for the North and South KSZ. Any discovery at the B conductors will add massive weight to the report in the eyes of a JV partner.
Anything that takes KAV a step closer to a JV has to be a positive, as it is clearly necessary to find a JV partner.
Whilst KAV are saying that they will continue to make preparation for drilling the B1 conductor themselves, isn't this the target that would be most appealing to potential JV partners?
My take on today's news is that KAV has shortened the odds for a prospective JV investor. I would expect the report is written to play to the retained geologists in the majors. There is market-sensitive information in the report and that's the reason for the NDA. The point of the work, is to package up the KSZ into several potential plays, potentially with different JVs. (Be that north and south or whatever)
A larger miner might well throw $10m cash at the option for a JV with an enormous pay off and limited risk. Or who knows may just want to buy a slice of the KSZ at a price KAV can't refuse. If they are buying the next Bushveld that's a big deal and you wouldn't commit to that with anything less than a 300 page report with i's dotted and t's crossed.
The report and today's RNS is not to convince us investors as to the merits or demerits of the KSZ or to announce any particular new discovery. The JV plan is firmly in BT's sights. So we are one step further along the plan, which is a positive.
GLA
Blimey - over 300 pages of stuff. No I haven't read it, only available to potential JV partners with an NDA.
So the Karoo Noril'sk model appears to be confirmed, and KAV are going about locating potential orebodies in an appropriate manner using a combination of CSAMT & TDEM - obvious next step is to drill the B1 conductors to turn 'proof of concept' into 'proof'!
Interesting development is that the Tshane complex is prospective for PGEs on their own, as well as with NiCu. This is reminiscent of the Bushveld complex, the world's largest source of PGE. Tshane is close to the surface in the southern section of the KSZ, so I guess that is where they will start looking. But it's one hell of a big job - KAV's licences are underlain by 50 x 650km of Tshane.