Member Info for KeithOz

Hi Bamb, Yes, I'm equally way-over-sensibly committed to both KAV & HE1. If you've read my posts here on the KAV board in the last few days you will understand that my investment decisions are made on a rational, scientific & quantified basis. Despite that, a bit nervous with such stupendous possible targets being drilled by both companies simultaneously!

Hi Prof, yes I've seen Ben's table. While useful. I don't agree with it 100%, particularly for graphite, as I have mentioned in other posts today much higher conductivity can occur for graphite, depending on its purity and crystal flake orientation. I would reasonably rule out graphite for geological reasons (see my last post re. density), rather than these conductivity results.

Ella, I'm not a driller, but let me forestall some over-optimistic answers. I have seen previous posts describing going through the top 70m of Kalahari sands "like a knife through butter". If only. Try going to your friendly local sand dune and digging a hole 1m deep but only 20cm wide. Now extrapolate that to a hole 70m deep and 10cm wide. This is technically very challenging, and going through the sands will be slow work. Once the gabbro is reached, there is a different issue. Although this will have a reasonably consistent density and hardness, gabbro is very tough rock to drill. I really am not qualified to guess, but I will - 7 days to reach the bottom of the sands and sort out the borehole so it doesn't collapse, then a further 15 - 20 days to TD. Then visual inspection for sulphide mineralisation and portable xrf logging, which I expect to be reported in an RNS.
The core then needs to go to S. Africa for assay. Given the recent unrest and the impacts of Covid, I have no idea how long this would take, especially if the assayer has a backlog. Don't hold your breath.

Hi again FK79 & ibcc, re graphite & keel position. I think graphite is unlikely. Vein (100% pure) graphite occurs only in Sri Lanka, as far as I know. Just about all other graphite occurs as flakes in metamorphic rocks such as schists, usually at a grade of 5-10%. I don't see the conditions at the base of a gabbro intrusion as being conducive to formation of specific orebodies of high grade graphite. To me, there are two bits of vital information.
1. The external petrographic examination showed that Cu & Ni were present in the gabbro, but at lower concentrations than expected. At first sight this seems negative, until you realise this is the same as at Norilsk and Voisey's Bay. The suggested mechanism at all three locations is the intrusion of magma through sulphur-rich sediment-derived strata. The sulphur then combines chemically with the contained NI & CU, forms a dense metal sulphide liquid which sinks to the bottom of the magma pool, thus depleting the magma above. At Norilsk and the KSZ, this overlying strata is high sulphur coal measures, at Voisey's Bay it is sulphur and graphite rich gneiss - interestingly, there are no graphite rich orebodies at Voisey's Bay, which helps answer your first question.
2. The position of the KSZ targets at the base of the 'keels', as well as their shape, is exactly as for Norilsk. This fits perfectly with the proposition that they have formed by the settling of denser pools of liquid. Ni/Cu sulphides are denser than liquid magma, graphite is not, so which is more likely to be at the bottom? This is why we are so eagerly anticipating the drill results.

Thanks Icbb for the detail. I am deliberately not a member of HotCopper because they send you a vast amount of junk on a daily basis, and pass on your details to a wide range of sharks. Further confirmation that a high Siemens reading can be graphite - particularly true for Sri Lankan vein graphite. I am not in 100% agreement with Ben's table.

FK79 - I have already answered this to the extent of my knowledge, sorry, I really don't know any more details. TDEM has not been used extensively for this specific purpose, and the details you are after (and I would also very much like to know!) are usually only available under the terms of an inter-company confidentiality agreement. As I have said before, KAV is very unusual in releasing such details publicly, one of the reasons I am invested. If you go back through the recent KSZ-related RNSs, you will see that KAV submitted the TDEM results to 3 independent experts for analysis. This is a reflection of the need for accurate assessment of a newly developed exploration technique that is yet to be widely deployed for these purposes - I have never been personally involved with a TDEM survey, I stopped working in exploration before it was invented :-)

Hi Ella, re 8000+S orebody confirmations - the short answer is none that I know of, and I suspect that many companies will not release such detailed data because of its commercial sensitivity. This is quite possibly why the KAV share price remains low - for most of the investing community this appears to be a high risk unknown - they do not understand the multiple integrated exploration techniques that KAV have used, and know TDEM as a technique primarily for locating underground water.
However, Murchison (MUR:TSXV) did drill an orebody in Saskatchewan a few years back with positive results. This was located by coincident conventional magnetic and EM data, then they ran TDEM giving 5000S. Nickel Creek Platinum (NCP:TSX) had more mixed results in the Yukon, with a large 5000S body proven by drilling to be graphite (contrary to Ben's table), but smaller high conductivity (20000S+) bodies being confirmed by drilling to be massive CuNi sulphides. Sorry I can't be any more specific, KAV is very unusual for its detailed communications.

Yet further thoughts on yesterday's RNS. It says they are going to use IP and AMT to investigate Morula. While I am familiar with both time-domain IP and frequency-domain IP for relatively shallow targets, isn't AMT used mostly for very deep targets not easily assessed by other methods? I'm a little rusty here, anyone with more up to date knowledge in this area? Is this a hint that Morula is indeed potentially deeper than the anticlinal deposits?

Should have added - mineralised breccia zones can extend to considerable depths. I'm starting to feel guilty about the potential environmental impact of an open pit 18kms long, 2kms wide, and 1km deep.

Hi James, I think that you are asking how accurately predictive are various indicators such as conductivity readings. Many of these geophysical techniques have only evolved over the last few years, and were first used by the big miners . These companies typically do not publish full details of what they are doing, and with what result. This is because such activities are a minor part of their business, and are unlikely to have an effect on the share price, thus are not required to be made public. They are also commercially sensitive.
On their own, results from one type of survey are poorly predictive. Ben Turney has previously released a video on the early drilling of what is now our KSZ A1 area. The original drill hole was based solely on gravimetric data. TEDM this year showed that the high gravity reading was caused by a dome of intrusive gabbro, not by high-density mineralisation. However, a similar previously mapped gravity high at A2 gave a target for TDEM, which then confirmed a body with high conductivity. I do know of one TDEM survey by another company that indicated a body with over 8000 Siemens, which turned out to be dud, so nothing is certain.
In short, you need to increase your chances by using a number of different techniques, and where KAV has excelled is by integrating several different modern survey methods with academic interpretation. Ultimately, drilling and assay is the only certainty. There is still risk for our KSZ targets - they are in the right place, have the right shape, right geophysical responses, and should have the appropriate mineralisation - but there is still a chance that they could be Fe sulphides rather than Cu / Ni. Sorry, there is no definitive answer.

Please note, different does not necessarily mean better! For those who are not up to speed on KCB deposit formation, beneath the contact details of yesterday's RNS is an excellent layman's summary, suggest you read that first. I would then add to that summary, that the rock layers that are now hosts to mineralisation were previously folded and deformed in 3 dimensions, giving rise to anticlines, looking like downward-facing spoons, which acted as traps for the rising mineralised fluids. T3, A4, Cupric Canyon and our own Acacia are all examples of such anticlines. I was a bit puzzled looking at the earlier maps to see that Morula was the opposite of an anticline - a syncline, or upward-facing spoon that would not be expected to trap mineralisation.
Yesterday's RNS provides some interesting additional information on Morula: "It appears to be a linear zone of deformed rocks, lying where the syncline (between 2 anticlines) should be located." and "The clearly defined mineralised system appears to follow a large regional fault/shear zone". So Morula doesn't appear to be a trap, it could well be a feeder zone - a series of fissures through which mineralised fluids have risen, subsequently filling the traps.
This could be good or bad! Worst case is that the mineralisation has passed through and ended up somewhere else, and the pathfinder minerals at the surface are just a residue. Best case is that this shear zone is brecciated (filled with ground up bits of rock) which is often associated with the deposition of large amounts of high grade mineralisation. Without more detailed info, I can not comment further, but the highly experienced KAV geologists on the ground will certainly be aware of these possibilities and will have a very good idea of the potential. I would be very surprised if they were to release such a positive RNS if they thought Morula could be a dud.
Just my initial thoughts, not based on hard evidence, at this stage still high risk but maybe even higher reward. We need a whole flock of drills up there asap.

Hi Layla, congratulations on your 1st purchase. It looks like you can still buy more at the same price, even though the news just gets better by the hour.

I understand that Cupric Canyon are planning to go public early in 2022, at the same time as they start production. That should shine a light on KAV's value. The geology is identical to South Ghanzi - diagenetic deposition of copper sulphides between the D'Kar and Ngwako Pan formations. Cupric Canyon strike length is just over 4km, Morula is now 18km. CC has 500Mt @ 1.4% Cu. I'll let you do the maths, I need to go to for a pee (it's the excitement, not age)

Incredible. South Ghanzi area increased by 50% and no market reaction. Low turnover, no price change. While we do not yet know the grade or thickness, this is looking to be considerably larger than the nearby T3 project, in an identical geological setting. As a reminder, MOD resources sold T3 to Sandfire for AUD 167M in June 2019, equivalent to GBP 90M at today's exchange rate. So if grades are the same (and the pathfinder minerals soil samples look very good), and the project is twice the size, our 50% could be worth 4.5 times the current KAV mcap. No consideration of KSZ or Ditau. Either I am missing something obvious, or this is crazy.

Hi Layla, Power Metals also looks interesting, but does not have exposure to the KSZ, which I view as the big banana. It would seem that a lot of posters on here have exposure to both companies. My main concern, and why I am not a Power shareholder (after all, I can't afford to buy everything interesting) is that they have 15-20 projects with a wide range of minerals, spread across several continents. This will require an incredible amount of money, expertise, and management time to address properly, and I just can't see how they can manage that adequately. From my reading of this BB, the frequent posters here collectively hold about the same %age of KAV as the management, which gives a good indicator of sentiment to add to the technical viewpoints. I hope you join us on this journey!

You're correct, it was Inco, not Teck - I must be getting senile. As an afterthought, Voisey's Bay has very similar geology to Norilsk & the KSZ. VB had magma injected through sulphur and carbon rich gneiss, with N &KSK it passed through sulphur rich coal measures. In each case it is postulated that the sulphur reacted with the contained metals, forming dense liquid pools of metal sulphides which coalesced at the bottom of the cooling magma. We will find out if this theory is consistent later this year.

Hi DD, it wasn't you I was sniping at! You are quite correct to bring up Voisey Bay, even if it was 25 years ago. For the younger folk here, the excitement started with the discovery of an orebody 800m x 350m x 125m (have a look at our KSZ dimensions). When drilled, assays showed around 100m of almost 4% Ni, almost 3% Cu, plus a bit of Co. Inco & Teck (and Falconbridge? - can't remember all the details)both bought stakes, and further drilling indicated another two similar orebodies. This then turned into a 3-way squabble, with Teck finally paying $4.3Bn for the lot. Yes you read that correctly, and just for 3 orebodies. I suggest you come back to this post when we have assays for the 3 KSZ potential orebodies, and do the sums - the valuation could be anything between 0 and $10Bn. Place your bets now, folks!

Pt. 2.
Just before discovery, about 18 months ago, CHN had a market cap of less than 100M GBP equivalent. After discovery, and the drilling of around 150 holes to help define a resource (likely to be revealed in Q4 this year) the market cap is 1.25 Bn GBP equivalent. Even more interesting, it would appear from the presentation that the conductor that has been drilled, which is the only one yet definitively discovered, is smaller than any of the three that KAV has currently found at the KSZ. I estimate that CHN is currently a year ahead of KAV, but I suspect that KAV has the more interesting projects - we will have to wait a few months for details of KAV mineralisation, although I strongly suspect KAV will have the higher Ni & Cu assays in the KSZ, based on the comparative geology. To be clear, I do not have a shareholding in CHN, nor any links to the company, and make no recommendation. On the other hand, I have accumulated a substantial (for me) investment in KAV, for the reasons outlined above.

Anyone else have some thoughts on this? Any other comparative companies that someone would like to mention? Thanks for reading a rather long post :-)

Pt. 2.
Just before discovery, about 18 months ago, CHN had a market cap of less than 100M GBP equivalent. After discovery, and the drilling of around 150 holes to help define a resource (likely to be revealed in Q4 this year) the market cap is 1.25 Bn GBP equivalent. Even more interesting, it would appear from the presentation that the conductor that has been drilled, which is the only one yet definitively discovered, is smaller than any of the three that KAV has currently found at the KSZ. I estimate that CHN is currently a year ahead of KAV, but I suspect that KAV has the more interesting projects - we will have to wait a few months for details of KAV mineralisation, although I strongly suspect KAV will have the higher Ni & Cu assays in the KSZ, based on the comparative geology. To be clear, I do not have a shareholding in CHN, nor any links to the company, and make no recommendation. On the other hand, I have accumulated a substantial (for me) investment in KAV, for the reasons outlined above.

Anyone else have some thoughts on this? Any other comparative companies that someone would like to mention? Thanks for reading a rather long post :-)

Hello fellow Kavangoists. Since this is my first post on this board, although I have been lurking here for months, a little about me: I am an Australian-based retired geologist who has worked at director level in business development roles for large multinationals. I first invested in KAV about a year ago, and have been topping up every time the company has derisked a project. For me KAV has multiple attractions – potentially huge scale deposits, a highly experienced management team who have been diligently applying sophisticated evaluation methods, great investor communications, and obvious deal-making ability, coupled with what I feel to be a low valuation.

Ben has stated on several occasions that KAV is an explorer and developer, not a miner, and let slip that he has been in discussions with a number of mining majors. Presumably the strategy is either to farm-in an operator, or else sell projects outright. This raises the question as to what KAV could be worth in the future. Without a PFS, JORC resource, or even a discovery, this could be viewed as a pointless exercise, and I am a little cynical about claims on this and other boards that this could be a 10, 20 or even 100-bagger – all based on zero data except hope. However, I have been sorting through a large number of junior E&P outfits to see if there are any worthwhile comparators.

Over the weekend, there was a presentation by Australian-listed Chalice Mining (ASX:CHN) at the Noosa Mining & Investor conference, conveniently close to my base. I'm having problems linking to it, so I suggest you check this out by googling “Chalice Noosa presentation”. The similarities between CHN & KAV are fascinating. A quick summary of Chalice:

CuNiPGE Julimar project on the W. margin of a craton (Yilgarn Craton, W. Australia)
One confirmed conductor, at one end of a potential 26km mineralised corridor
Applications made for several thousand km2 nearby licences
Two additional projects at earllier stage (one CuNi, one Au)
Methodical use of sophisticated geophysics & geochem
Experienced, grizzly geologists + young, enthusiastic & communicative CEO

Sounds familiar? See Pt 2.