Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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Hi Legalwolf,
In the following video Willem Middelkoop of the Commodity Discovery Fund talks about his investment strategy. Now that we hopefully have 'discovery' hole I will be surprised if we don't see some investment from funds. Someone might want to give him a nudge...
https://youtu.be/IXvz2_-4dM4
Legalwolf - The majors still hold the cards even without investing in KSZ. Why step-in now when nobody knows if/what KAV have in the KSZ... little is proven to date.
Even if KAV 10-bag on a 'discovery' a £200m market cap KAV is cheap as chips. The major's will still hold all the cards as KAV won't be able to fully prove up or produce from the licence given the 700m depth mine without the help of a major. Even if KAV discover the next Norilsk it dosen't mean they will get a good deal out of it. Look what happened to RKH when it found oil in Falklands etc.
Looking good so far for KAV, keep up the good work. Have a good feeling about this one.
Is it surprising that none of these majors (or an insti) have taken some kind of holding in the company already? When I first came across KAV and the comparisons with Norilsk/Voisey Bay, it's one of the things that I wondered about. I've had other investments where a major has seen the potential in the junior and has positioned itself in this way into the junior. Given the promise at both KSZ and the KCB, I'm just wondering why none of the majors have taken a strategic position already?
One example of this Chesterfield Resources (CHF, a junior copper explorer) where Polymetal International (a large mining company) have taken a holding in CHF primarily because CHF hold a large land package in Cyprus. Now I'm also invested in CHF, but would argue that KAV and its projects appear much more exciting and with a lot more potential that what CHF has in Cyprus.
Is this surprising, or would it be more surprising if a major/insti had made a move already?
Yes, thanks folks, very informative.
Thanks Keith and everyone for great posts.
Thanks Keith,
I agree AA would be a likely partner/purchaser.
I hadn't appreciated that licence PL365/2018 was the extent of the KSZ. I had assumed that the SFR licence immediately above this had similar geology and therefore SFR would be interested in the cores KAV recovered.
Ella/F79.
I should probably confirm that the second part of my post is purely speculative - I really don't know what we have, and I suspect that Mike & Hillary can't be sure either at this stage.
For A2-1, there are several possibilities:
1. TDEM hasn't been as accurate as hoped for, and they have missed the target.
2. A reading in the low 000s Siemens may be high grade disseminated sulphides rather than massive sulphides, but not necessarily Ni & Cu sulphides.
3. TDEM may actually have located a deeper target (not necessarily an orebody). With this possibility, I found it interesting that Ben tweeted "Hitting ultramafic rocks & chalcopyrite (#copper sulphide) in the Proterozoic at 650m is a game-changer for the #KSZ. The historic assumption had been potential mineralized zones would be too deep to find targets with remote sensing tech" implying that remote-sensing tech had actually found the target, not accidental drilling. However, I think it is very unlikely that they can re-enter what was a problematic hole, they would need to start over.
4. They do not want to, or can not for reasons of commercial confidentiality, reveal what was found re "sulphides" in A2-
Next steps. They clearly want to get on with B-2, and I would be very surprised if that is not next. However, clearly having TWO sets of prospective mineralisation is causing re-evaluation of plans - another Ben tweet "Adapt or die in this game. Metals exploration is high risk and can take many unexpected turns. We can’t wait to see what happens next"
Seriously, no one knows if or how the plans will change. We now appear to have twice the opportunities, for a 10% increase in the market cap. Crazy. Just hold tight & hang on.
Sandfire. They are NOT a major player. Their current interest & expertise is in sedimentary Cu, NOT magmatic derived NI-Cu-PGE. They may be a potential partner for the KCB, but not the KSZ. For the KSZ, I would put my money on Anglo-American, particularly if KAV find a lot of PGEs, A-A are the majority shareholder in Anglo-American Platinum (formerly Amplats), and of course have major interests in Cu & Ni. Glencore or BHP would be next on the list.
I got the impression from Ben that the Mike Moles presentation, probably with Hillary, is maybe week after next. Makes sense, they will have finished A2-2, and decided on where to go next, and have had time to knock up some slides.
Enjoy the Q & A with Ben, it is 3.00am my time, and all the questions I would want to ask are price-sensitive, so he could not answer :-)
'Keith, thank you. I think I speak for everyone when I say that we greatly appreciate your participation on this board'
Agreed
Thanks Keith. I'm certainly aware of the activities and testing that need too happen before we get to any potential answers and meanings of it all.
I even have the patience to wait for it but as you said in your post 'lets have a look at the pieces that have been revealed so far' Which is what I am talking about.
After all it was your speculative post that I was commenting on Keith ;)
We will all speculate and that's absolutely acceptable. My point was have I interpreted your post broadly correctly or missed the point?
Atb
Keith, thank you. I think I speak for everyone when I say that we greatly appreciate your participation on this board
Thanks Keith- great read.
Obviously we are all really excited to know what's in the core, both for A2-2 and A2-1.
If we are talking to majors presumably they will give some access to expertise. I would like to think that if we share our cores with Sandfire that we will get some limited access to their expertise - they will be very interested having licence areas just above KAV.
I am hoping that we will get reinterpreted TDEM surveys early next week which should add another small piece to the jigsaw.
I would love to hear from Mike Moles but I assume he will terribly excited but also extemely busy trying to help in understanding what we have and the best way to progress it. A presentation, even on a subject you know inside out takes time to prepare - particularly if it is for shareholders.
I assume our exploration licences will cover us for anything that we may find in the core - I had a quick look online but I am still not 100% clear.
KeithOZ - is there any need or argument now for KAV to go back to A2-1 and drill deeper there (and into the Proterozoic)?
Thanks for the posts KeithOz - really helpful when it comes to trying to understand the findings so far. "Whatever has been seen, it is interesting enough to drill a 2nd hole in the same area, and twin the future holes as well, even though this means delaying the exciting KCB drilling."
This was the point that I was making yesterday. When the drill and team are on the ground already, better to explore thoroughly and do what's necessary rather than move on simply because that's the original plan. But this might be a question that BT can address on the twitter - although it might be that they need to have a think about this once they have completed A2-2.
F79 - simple answer is I don't if there is or where is the A2 orebody, we will find out sooner or later. PLease note the end of yesterday's RNS "The Company advises shareholders that thorough analysis is required of all core samples retrieved from Hole TA2DD002, before any conclusions can be drawn as to what has been encountered so far. This analysis will include (but not necessarily be limited to) assay testing and whole rock analysis." Applies to both formations, both holes.
Apologies I even proof checked it but sadly very badly....you can hopefully make out my points albeit a poor quality post!
Good posts Keith thanks.
The fact they have found something where the model thought they would and that arget b is such a high reading is indeed something exciting. As it's what they have found this far.
It's also exciting that both he Proterozoic and karoo both seem to have potential.
If I'm understanding you correctly you're saying that the two drill holes so far indicates an ore body somewhere potentially between the two holes. Likely closer to the first hole?
I suppose the previous surveys may not have identified this bigger or body as it potentially sits deeper than they survey as we now believe its deep in the Proterozoic?
Am is interpretation broadly right. Or way off (albeit as you say a jigsaw without all the pieces)
As for JV, sale etc I'm hoping this ends up playing out as the voisey bay did...
For anyone unfamiliar here is an infographic https://www.visualcapitalist.com/the-story-of-voiseys-bay-the-discovery-1-of-3/
Atb
Part 2.
A2-2 – We have a 2nd shot at the Karoo, so can appraise the continuity and differences over a distance of 1km. Less sulphide blebs, further away from a potential orebody. We also have our first look at the Tshane. It is very possible that both the Tshane and Karoo magmas have intruded through the same feeder zone. If so, there will have been multiple magma washes, increasing the likelihood of large amounts of metal sulphides. The Tshane appears to be F'd up, to use Mr Moles' technical terminology – apparently by migration of magmatic fluids, possibly from the later Karoo age events, maybe by some additional event we don't yet know about. That's good, since magmatic fluids push minerals through the rocks as they migrate, and deposit them as they cool. Also, there are thick zones (zoneS – plural !) of pegmatite, within other coarse grained rocks. This is very good news, since it means that the magma has cooled very slowly (pegmatites have very big crystals, which only form slowly out of the melt). Slow cooling magma allows time for liquid metal sulphides to coalesce, and being dense, accumulate in pools which then solidify into orebodies. Pegamatites are often a source of exotic minerals, which could be a bonus to the Ni-Cu-PGE that we are hoping for. Chromite has been spotted, which is often associated with Ni.
What we don't know yet.
1. The mineral concentrations in either series, nor the positions of any obvious orebodies – but B2-2 at 8200S might just be the ultimate 'proof of concept'.
2. How deep the Tshane goes – orebodies are likely to be at the base of the formation, so may be beyond the limits of easy detection and/or mining. Noril'sk was found a long time ago because of surface outcrop, but is currently mined to around 1500m.
3. If we do find an economic deposit, are they going to occur all over our licence areas?
4. Clearly KAV can not evaluate or develop such a vast project on its own. Ben has said multiple times that majors will be involved shortly - is this a sale / auction or a JV?
Part 1.
Geology is a bit like a secondhand jigsaw puzzle – you need to get an idea of the whole picture, but you don't have all the pieces. It's going to be at least 3 months, possibly not until early next year, before Messrs Moles & Gumbo get enough pieces to have a good idea of what the picture looks like. Since we are all too impatient, let's have a look at the pieces that have been revealed so far.
What we already knew.
The KSZ is a series of massive crustal cracks to one side of an ancient craton. There have been 2 major intrusions of potentially mineral-bearing magma – the Proterozoic (Tshane) 1Ga and the Karoo 180Ma. The Karoo is known to be related to a magma plume from beneath the Kaapvaal Craton, we're not so sure about the origin of the Tshane. Both sets of magma have been intruded through sulphur-rich overlying sediments (Transvaal and Olifantshoek ironstones for the Tshane, Kalahari coal beds for the Karoo).
Systems such as this elsewhere (Noril'sk, Voisey's Bay) are associated with Ni-Cu-PGE deposits, where the resulting sulphur saturation vacuums up the contained metals, and binds them as sulphides. If the magma flows recur, the more chance there is of sulphide deposits forming, since fresh supplies of magmatic metals are washed through the system. The longer the magma has to cool, the greater chance of finding concentrated orebodies.
What we have discovered with the A2 boreholes.
A2-1 – there are indeed sulphides present in the Karoo, at relatively shallow levels. If sulphides are present as visible blebs, then it is likely that a significant massive sulphide orebody is close by. Whatever has been seen, it is interesting enough to drill a 2nd hole in the same area, and twin the future holes as well, even though this means delaying the exciting KCB drilling.