LONDON Stock Exchange-listed mineral exploration company, Kavango Resources, has signed an exclusive two-year option to acquire a gold exploration project in Matabeleland region, a major development set to transform the region’s mining value chain.
The incumbent claims holder will be paid US$4 million cash, which is the acquisition price.
The mining entity is committing to inject US$1 million into exploration at the Nara Project over the two-year option period.
Under its Nara project, Kavango Resources, which has presence in Botswana says the identified area has 45 contiguous gold claims measuring 10 hectares each in size.
It 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. The mines also produced credits of tungsten and silver.
Announcing the first gold exploration project in Zimbabwe, Kavango Resources, chief executive officer, Mr Ben Turney, said with the strong financial backing of Purebond, Kavango is now positioned to pursue the potential it has identified in Matabeleland.
“After extensive due diligence over the last 12 months, including four 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,” said Mr Turney.
He further noted that many 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.”
Detailing the Nara Project Option terms, the notice says to exercise the Option, Kavango has agreed to pay the current claim holder US$4 million cash, which is the acquisition price.
“Kavango has agreed to pay an option fee to the Vendor of up to US$220 000 over the two-year option period, split into four individual payments of US$55 000 each payable at the start of each half year of the option period,” it said.
“Kavango will commit to spend US$1 million on exploration at the Nara Project over the two-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, together with recommendations (where possible) on future development.”
According to the notice, Kavango believes the Nara Project has the potential to host a bulk mineable gold deposit. It said 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, which present a separate opportunity for potential near-term revenue generation,” it said.
According to the notice, 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 programme 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 programme before deciding whether to exercise the option to acquire the Nara Project.
The exploration programme will be initiated in the coming days and it is envisaged to contribute to employment creation.
The mining industry is one of Zimbabwe’s economic mainstays with the sector presently contributing about 70 percent of the country’s foreign currency earnings.
Gold is Zimbabwe’s single largest export earner and the sector employs thousands of people involved in small-scale artisanal mining or employed by big mines. – The Chronicle
