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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.
Personally I think it’s a distraction as KAV could have drilled 2-3 holes with the money at Hillside/Nara. Slightly frustrated KAV are 2-3 months away from Hillside assay results and probably 3 months away from Karakubis drilling so 6 months for those assays. Let’s assume Nara drilling commences in a month, there won’t be any meaningful news unfortunately for 5-6 months.
The timelines for assays tended to be 3 months when core was sent Bots-JHB but KAV are likely to use ANTECH LABORATORY which is c100 miles NE of Bulawayo. BT did say early new year suggesting the lead time is much shorter. You would hope KAV will release results for the first two holes fairly soon.
If you want some interesting reading which is highly applicable to Hillside as similar greenstone belt, check out Pambili's NI 43 -101 report.
https://static1.squarespace.com/static/6278138e6055e5734ae318ed/t/640ff40688b9152f5fa25bb0/1678767122779/2023.03.10_PNN_Updated_NI_43-101_Happy_Valley_Mine.pdf
Karakubis is "Q1"
Nara was "immediately after Hillside" and BT said that was finished in early/mid Dec, the problem was they completed 3 drills but didn't have enough time for a 4th. On the whole, I agree its probably a good thing drilling a 4th hole at Hillside because they'll need to make a decision on the option by the end of Jan. The drilling has been a lot deeper c330m per hole although I was rather hoping the bulk mining prospect was much shallower.
At Nara KAV have upgraded the target from 500k to 1m oz so fingers crossed
New tweet, looks like they're cutting cores a bit odd when BT said assays "early in the new year". Secondly they've decided to drill more at Hillside when BT said they'd finished and were starting at Nara and they'd moved equipment. Just wish BT & KAV do what they say.
KAV drilled 3 diamond holes c1000m at Hillside, the anecdotal suggestion is they found a lot of gold. Cores sent to a local assay office with results possibly in Jan. Drilling will start at Nara in week 2 or 3 of Jan 24.
KAV processing geophys for Karakubis, drilling expected end Mar 24.
Investors cannot discount geological risk, if there's nothing there you move on.
I agree the track record hasn't been great but KAV and BT have made significant changes over the last 12 months so my prediction is gold & lots of it in 2024. If Karakubis (and they have the regional expert) comes off its ultimately worth 6-10p/share.