It’s an exciting addition to the Kavango Resources PLC (LON:KAV) portfolio: a joint venture on two copper exploration licences just a few kilometres away from the ground famously worked up by MOD, Metal Tiger (LON:MTR) and Sandfire (ASX:SFR).
The formal joint venture was signed in mid-February following an initial memorandum of understanding that was agreed in September of 2019. But it’s not likely to end there.
“We’re in the process of putting together quite a substantial land package in that area,” says Kavango’s chief executive Mike Foster.
“We have plans to extend our ground holding further.”
Partly that’s because of the huge prospectivity of the areas Kavango is targeting, but it’s also because of the positive reception the move has got in the market.
After all, investors are only too cognizant of the turn Metal Tiger was able to make on its investment in the nearby T3 project, which was eventually taken wholly-in house by MOD before MOD in turn was acquired by Sandfire.
The area is, says Foster, “one of the world’s most promising under-explored copper provinces
So, this is familiar territory for investors, and in the weeks after the MoU was first signed Kavango’s shares almost doubled, although they have since fallen back.
An exploration programme, which will get underway, should provide further interesting newsflow and may yet stimulate the market further.
In the meantime though, Foster, and non-executive director Mike Moles, are both keen to emphasise that the company’s original project – the one it was listed on – remains key.
“The new copper ground doesn’t necessarily take any of the pizazz away from the Kalahari Suture Zone,” says Foster.
“We don’t want people to think we’ve moved onto another project,” he says. “I think the motivation is to give investors a fall-back position. The Kalahari Suture Zone has high risk, and nobody else has got any results from there.”
But the thing about the KSZ is that allowing that it’s high risk, the potential reward is equally high. When Moles talks of comparisons he mentions Voisey’s Bay and Norilsk, two of the biggest polymetallic projects anywhere in the world.
“Most of the other big bodies of gabbro in similar situations as KSZ do have big deposits of massive sulphides in them,” he says.
“Indeed, there could be a large number of massive sulphides.”
The trick is to find them. To that end, Kavango has already undertaken an airborne geophysical survey which has penetrated down to depths of 400 metres, ground electromagnetics, and it has done some drilling.
“We are able to map,” says Moles. “We’re building up a picture.”
In a sense, he says, it’s a box ticking exercise. “You know what criteria you need for a project like Voisey’s Bay or Norilsk, you need to tock the right boxes, and so far we have. If we don’t find a massive sulphide on KSZ, then somebody else will in the future. But provided we can keep funding, we think we will.”
More magnetic survey work is planned, in particular the deployment of a bigger transmitter designed to produce a bigger current and allow the company to see past all the salted groundwater that’s previously interfered with the interpretation of data. And after that there should be more drilling.
At the same time, work on the copper ground will be beginning to gather momentum, so all told, it looks like there should be a healthy flow of news over the coming year. By the end of that process the company could look very different indeed.