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A large seller has been evident for the last 3-4 months & they're prepared to sell down to 0.6p. either someone destressed or they got the shares very cheaply, my bet is the old founder Foster or perhaps shares given to suppliers in leu of payment. You wonder why they don't hold off 3-4 months and then sell into a bounce. No matter, PIs can use this period to accumulate until there's either decisive news or the seller is gone.
I suspect we'll hear a lot more about Karakubis in the next two weeks. The licences are in between Rio (Namibia) to the west and the Sandfire Motheo copper mine to the east. The Kalahari Copper Belt (KCB) is a district copper region with at least two +$bn mines plus others in the pipeline. What they're looking for is a D'Kar/Ngwako Pan contact 200-300m deep, typically anticline folds. Its not easy because much of Botswana has a thick sand cover so there's very few physical signs at surface. Last year Kavango bought ENRG's neighbouring licences in a forced sale to form a very large strategic block, ENRG had drilled 5,000m in other parts of the licence areas without success, more recently geophysics identified 3 dome structures & ENRG were ahead of KAV in their development although KAV now think they've found similar structures on their original licences. Kavango are now using the regional expert Dave Catterall, important because he's focussed efforts away from more developed licences to the new Karakubis/ENRG area so I'm hoping KAV will share some of the new geophysics in the next few weeks.
Note the operating mines grades are typically 2% Cu & 15g/t Ag but sometimes as high as 6% Cu in places.
New video 14 minutes long and well worth listening to.
https://www.youtube.com/watch?v=wPtYNjVyeVg
This is low cost mining, oxide which is easy to process, no expensive mines, very little automation, very cheap labour. Profit will easily be $1,000/oz. Yes its small scale even with the third stamp mill but its about developing a mining business.
It’s just lack of news flow
There's a lot of news flow to come over the next few months:
Nara drilling
Hillside option decision (KAV has already said yes)
Karakubis geophysics and drill targets
Karakubis drilling campaign
Hillside assays
Nara assays
Some decent good news and KAV re-rates.
RNS out and 2 dumps at Nara, represents c$6m of free cash flow perhaps more, this is low lying fruit as no actual mining. The point about the option exercise date is true although they could exercise earlier but Nara is big c1moz target & lots of drilling required.
Legalwolf: in mid Dec BT mentions two tailings dumps in a Q&A although he's only mentioned Nara by name. The underlying issue is Nara is a 2 year option (c17 months left) so it would be surprising if KAV starts production before the option exercise and as of yet KAV has not started drilling (anytime next couple of weeks). I don't recall talk about Hillside tailings but it would seem the most likely because KAV have stated their intention to exercise the option, note expiry was 25th(?) Jan but they agreed to extend 3 months due to a new capital gains tax. My only request is the tailings have low capital requirements and a fast payback. I'm expecting KAV to list its shares on the Vic Falls Stock Exchange at some point to get a concession on gold sales as there's a rule which says > c3000oz then company gets 75% USD & 25% ZWL.
No idea what production is feasible without megabuck investment, perhaps $1m required per 1000 oz??? In the latest interview BT talks about the ZIM operation being net profitable which is probably implying $2-3m profit from tailings.
Re PL082: the underlying issue was a failure of geophysics to recognise syncline & anticline when the latter was more associated with mineralisation. It was pretty unforgivable.
Karakubis has recognisable dome structures ie anticlines similar to Sandfires mine. Still lots of geological risk but they are looking in the right area.
Near term cash generation will be modest $1-2m but it all adds up and contributes towards exploration. CEO is now Zim based & that’s the real focus for KAV.
If they find commercial grades at Karakubis KCB when drilling starts in 1-2 months then it has the potential to be very large but let’s not kid ourselves there is risk and even the likes of Sandfire have struggled at times, in KAVs favour is the regions expert Dave Catteral is leading the exploration.
The starting point of £6m is wrong because it was basically 4.5m as of Nov. Then they acquired ENRG'S KCB licences for cash, can't recall cost was in region 1.5m-2m. Hillside is c$500k +shares although this has been delayed 3 months. Nara is more expensive but option has 18 months so not a current cash flow. On-going drilling likely $200-300k per month whilst drilling. KAV will have central overheads c100k/mth. So KAV can probably get away with late summer/early autumn before cash runs out.
Geologists create a hypothesis based on gathered evidence and past experiences. Exploration is inherently risky so if the mineralisation isn't there you move on. I think its pretty clear BT has two throws of the dice left Karakubis and Hillside/Nara, its also clear the market isn't buying hype but it will respond to if KAV create genuine value. Pambili & Nara tailings lack scalability, but there are three significant value events in the next 6 months.
1) 4 targets drilled at Hillside , cores awaiting analysis.
2) Karakubis drills expected April(?), has the potential if they locate a mineralised system to be extremely large
3) Nara where the target size has been increased to 1moz Au
This is not ramping, there are real geological and country risks to consider. KAV have two regional experts who are in demand by other explorers, for example Dave Catterall reviewed KAV's KCB licences and decided to focus on Karakubis despite it being less developed than other licence areas, KAV then acquires ENRG's neighbouring licences with multiple dome structures.
Legalwolf & others have stated the share price is very cheap, lets just say nothing is really priced in at this point but there will be multiple rolls of the dice in the next 6 months.