Last checked at 26 Jun 2023 12:57
PRESS RELEASE
26 June 2023
KAVANGO RESOURCES PLC
("Kavango" or "the Company")
Option to acquire Zimbabwe gold project
Kavango Resources plc (LSE:KAV), the Southern Africa focussed metals exploration company, is pleased to announce it has signed an exclusive 2-year option to acquire a producing gold exploration project in Matabeleland, southern Zimbabwe (the "Option").
The Nara Project comprises 45 contiguous gold claims (the "Claims"). Kavango believes the Nara Project has potential to host a bulk mineable gold deposit.
The Nara Project area has supported historic high-grade underground mining and continuous surface small-scale mining and custom milling over the last 30 years. This has generated approximately 150,000 to 250,000 tonnes of tailings (the "Tailings"), which present a separate opportunity for potential near-term revenue generation.
Under the terms of the Option, Kavango will have full access to the Nara Project area to conduct field due diligence, through a comprehensive exploration program. This program will include (but not be limited to) surface mapping and geochemistry, geophysics, surface drill testing, underground sampling, underground drill testing and assessing the commercial potential for processing the Tailings.
Kavango will complete its exploration program before deciding whether to exercise the Option to acquire the Nara Project.
Ben Turney, Chief Executive Officer of Kavango, commented:
"After extensive due diligence over the last 12 months, including 4 visits to Matabeleland, we are delighted to announce our first gold exploration project in Zimbabwe.
The greenstone belts in Zimbabwe host prospective rocks for bulk-mineable gold deposits, according to Kavango's internal review and analysis. Many of these belts share notable similarities with some of Australia's most prolific gold-producing regions.
Zimbabwe has a strong tradition of mining. However, exploration and investment has been severely limited over recent decades. In 1980, Zimbabwe produced more gold than Australia but the country has yet to experience the bulk-mining boom Australia did midway through that decade.
We believe this presents a significant opportunity for Kavango and a commercial discovery.
With the strong financial backing of Purebond, Kavango is now positioned to pursue the potential we have identified in Matabeleland alongside our portfolio in Botswana."
The Nara Project
The Nara Project includes 45 contiguous gold claims (10 hectares each in size) and covers four historic mines with total recorded historic production from underground workings of 92,000oz gold averaging 9.76g/t (from the early 1900s to the early 1960s). These historic mines also produced credits of tungsten and silver.
Given the extent of the project, its regional geological setting, the historic high-grade underground potential and the sustained small-scale mining activity, Kavango believes the Nara Project holds considerable prospective potential for a modern commercial gold operation.
Nara Project exploration plan
Kavango has prepared an exploration plan for the Nara Project, which will include (but not necessarily be limited to):
- Surveying the Tailings
- Assessment of the historic mine shaft and possible underground drilling and channel sampling (subject to safety)
- Soil geochemical surveying along the strike extent
- Scout drilling to test artisanal workings/shafts
- Other drilling and surveying, as budget permits
Kavango will initiate its exploration program in the coming days.
Nara Project Option Terms
Kavango has entered a 2-year exclusive binding option to buy outright 45 gold claims in Matabeleland, Zimbabwe (the "Nara Project"). The 2-year option period will allow Kavango to perform an appropriate exploration program to assess the Nara Project's potential.
To exercise the Option, Kavango has agreed to pay the current claims holder (the "Vendor") US$4million cash (the "Acquisition Price").
Kavango has agreed to pay an option fee to the Vendor of up to US$220,000 over the 2-year option period, split into 4 individual payments of US$55,000 each payable at the start of each half year of the option period (the "Option Payments").
In the event Kavango exercises the Option, any Option Payments paid to the Vendor will be deducted from the Acquisition Price.
Kavango will commit to spend US$1million on exploration at the Nara Project over the 2-year option period, with a minimum exploration spend of US$500,000 in the first year. Should Kavango not exercise the Option, Kavango will turn over all exploration data to the current operator of the stamp milling operation at the Claims (the "Current Operator"), together with recommendations (where possible) on future development.
Kavango has the right to exercise the Option at its sole discretion, subject to the Company being up to date with the Option Payments and spending commitments. Kavango has the right to cancel the Option at any point during the option period and to exercise the Option at any time during the option period.
Performance Consideration
On declaration of a code-compliant (e.g. JORC or equivalent) gold resource containing in excess of 500,000 ounces of gold (inferred category or above) at the Nara Project by Kavango, the Company will pay the Vendor or his designate/s a payment in shares to a value of up to US$1million in shares in Kavango (the "Performance Consideration Shares").
The aggregate value of the Performance Consideration Shares will be calculated on the basis of the table below:
Resource size (number ounces contained Au in inferred or above resource category) | Performance Consideration shares to be issued to Vendor (in US$) |
500,000oz | US$500,000 |
750,000oz | US$750,000 |
1,000,000oz or greater | US$1,000,000 |
The aggregate issue price of the Performance Consideration Shares shall be calculated based on stage gates using the following structure:
- First issue of one quarter of the Performance Consideration Shares shall be 1.8p per share
- Second issue of one quarter of Performance Consideration Shares based on the closing price of shares traded in Kavango Resources Plc on the date six months after 23 December 2023;
- Third issue of one quarter of the Performance Consideration Shares based on the closing price of shares traded in Kavango Resources Plc on the date twelve months after 23 June 2024;
- Fourth issue of one quarter of the Performance Consideration Shares based on the closing price of shares traded in Kavango Resources Plc on the date 18 months after 23 December 2024.
Further information in respect of the Company and its business interests is provided on the Company's website at www.kavangoresources.com and on Twitter at #KAV.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF REGULATION 2014/596/EU WHICH IS PART OF DOMESTIC UK LAW PURSUANT TO THE MARKET ABUSE (AMENDMENT) (EU EXIT) REGULATIONS (SI 2019/310) ("UK MAR"). UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION (AS DEFINED IN UK MAR) IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.
Further information in respect of the Company and its business interests is provided on the Company's website at www.kavangoresources.com and on Twitter at #KAV.
For further information please contact:
Kavango Resources plc
Ben Turney
+46 7697 406 06
First Equity (Broker)
+44 207 374 2212
Jason Robertson
Kavango Competent Person Statement
The technical information contained in this announcement pertaining to geology and exploration have been read and approved by Brett Grist BSc(Hons) FAusIMM (CP). Mr Grist is a Fellow of the Australasian Institute of Mining and Metallurgy with Chartered Professional status. Mr Grist has sufficient experience that is relevant to the exploration programmes and geology of the main styles of mineralisation and deposit types under consideration to act as a Qualified Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'.