Kavango raises USD8.4 million for expansion as prepares for litigation

(Alliance News) - Kavango Resources PLC on Friday said it has successfully raised approximately USD8.4 million with two subscriptions, one in the UK and one in Zimbabwe, where it is listed on the Victoria Falls Stock Exchange.

The London-based precious metals exploration group raised about USD4.7 million in Zimbabwe at the equivalent of a penny per share, and a further GBP2.8 million in London at the same time, at an approximate 33% premium to yesterday's close.

Chairman & Interim Chief Executive Officer Peter Wynter Bee bought 20 million of the subscription shares for a total of GBP200,000.

Kavango expects the newly issued 630 million shares to start trading on March 16 on both exchanges.

The proceeds of the fundraise will be used, in conjunction with existing cash resources and committed funds, to fund the further expansion of the Hillside gold production, as well as the acquisition of the Nara gold project, which is, however, expected to be entangled in legal proceedings before being completed.

Kavango announced on Monday that the acquisition is pending, likely litigation after the seller of its option exercise to purchase the entire project, consisting of 45 claims, has defaulted on the terms of the agreement, which was supposed to be completed last week following an extension.

The company said it intends to "pursue all avenues to protect the interest of its shareholders, including but not limited to enforcing the contract and seeking compensation" by Simon John Bowman, the seller, and his operating company, Romjack Mining Ltd.

"Whilst the company embarks on claims... [it] will continue to increase gold production at the Hillside Gold Project and the farm-out of the company's portfolio located in the Kalahari Copper Belt", Kavango added.

Kavango shares were up 6.7% at 0.80 pence each on Friday at midday in London.

By Martin Miraglia, Alliance News reporter

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