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Kavango Resources (KAV)

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Tuesday 20 April, 2021

Kavango Resources

Strategic Partnership with Spectral Geophysics

RNS Number : 9579V
Kavango Resources PLC
20 April 2021
 

PRESS RELEASE

 

20 April 2021

KAVANGO RESOURCES PLC

("Kavango" or "the Company")

 

Strategic Partnership with Spectral Geophysics

 

Kavango Resources plc (LSE:KAV), the exploration company targeting the discovery of world-class mineral deposits in Botswana, is pleased to announce the signing of a strategic partnership with Spectral Geophysics Ltd ("Spectral") (the "Strategic Partnership").

Spectral is one of Southern Africa's leading firms in the use of ground-based remote sensing technologies to identify high-speed electromagnetic ("EM") conductors at depth. Spectral has specialist knowledge and expertise in mapping subsurface geology beneath Kalahari cover. This experience is particularly important to exploration of the Company's Kalahari Suture Zone ("KSZ") Project in Botswana.

 

Highlights

v Spectral has completed two Time Domain Electromagnetic ("TDEM") surveys in the KSZ. The second of these, at Target A2, identified:

A large conductive anomaly, which is approximately 1km in strike with a large decay constant (~340msec) that could indicate presence of metallic sulphides

A second possible discrete conductor to the west of A2, which requires further surveying.

v Under the terms of the Strategic Partnership:

Spectral will share with Kavango its technical knowledge to optimise future underground remote surveys of the KSZ

Spectral will prioritise the assignment of its advanced surveying technologies to the KSZ for a period of 24 months

Kavango will share with Spectral results of independent assessments on any data gathered from remote surveys

Kavango's field exploration team will provide additional support to facilitate more rapid deployment of remote sensing technologies to target areas.

v In return for securing priority access to Spectral's technical expertise and advanced remote surveying technologies, Kavango has agreed to issue Spectral:

3,000,000 ordinary shares in the Company at 3p per share (the "Partnership Shares"). The Partnership Shares will be lodged with the Company's broker and are subject to a 12-month lock-in.

3,000,000 warrants in the company exercisable at 4.25p per share with the following vesting conditions

I.  1,000,000 warrants vest on completion of the next 5 TDEM surveys in the KSZ

II.  1,000,000 warrants vest on completion of a further 5 TDEM surveys in the KSZ

III.  1,000,000 warrants vest on completion of a further 5 TDEM surveys in the KSZ

 

Michael Foster, Chief Executive Officer of Kavango Resources, commented:

"We are delighted to announce a Strategic Partnership with Spectral Geophysics and its founder Cas Lötter .

Cas is one of Africa's principal experts in subsurface geological surveying. Under his leadership, Spectral is now among the Continent's leading specialists in ground-based EM surveys, having worked on projects in 18 countries for many of the world's largest mining firms.

In addition to this, Cas has personally interpreted over 100,000 line kilometers of helicopter EM data and was directly involved in the target identification that led to the T3 and A4 Dome copper discoveries in the Kalahari Copper Belt.

With Spectral's assistance and experience, Kavango will now be able to deploy more sophisticated methods and remote sensing technologies into the Kalahari Suture Zone. Following the success of the first two TDEM surveys we completed at Hukuntsi, this is a major step forward for Kavango and significantly bolsters our exploration capabilities."

Cas Lötter, founder of Spectral Geosciences, commented:

"I have been intrigued by the potential of the Kalahari Suture Zone for over 30 years. However, it has only been in recent years that technology has improved to the point to allow for effective surveying at depth, beneath the Kalahari cover.

I was happy to be invited to work on the KSZ Project last year. It is a technically-complex environment to work in, but my team and I have developed sophisticated methods to enable us to step up to this challenge. The fact that our data has stood up to rigorous external validation further strengthens my belief that our partnership with Kavango could yield substantial results.

Now that we have seen the results from our first TDEM surveys, I am even more encouraged by what we have already found. We have learned a lot from the first phase of surveys and applied these lessons to the next round of surveys, which are well underway."

 

About Cas Lötter & Spectral

Cas Lötter had his first experience with mapping geology below the Kalahari beds in 1985 when he located the mafic/ultramafic contact of the northern limb of the Molopo Farms Complex, using aeromagnetic, ground magnetics and gravity. Since that time, he has been involved in exploration projects for minerals and groundwater below the Kalahari stretching from the northern Cape of South Africa to eastern Namibia and further north through western Zambia into the southern DRC and into Zimbabwe in the east. He was especially active in Botswana where he has been a resident since 1993, the year he established geophysical consulting and contracting company, Spectral Geophysics. Spectral serviced several multi-nationals and a plethora of Canadian, British and Australian juniors eg. Rio Tinto, BHP-Billiton, Anglo American, Phelps Dodge, Falconbridge, First Quantum etc. in the search for diamonds, gold, copper, nickel, lead-zinc, uranium and manganese. Spectral has also been involved in projects in South Africa, Namibia, Angola, DRC, Congo, Zimbabwe, Mozambique, Swaziland, Lesotho, Kenya, Tanzania, Uganda, Ivory Coast, Senegal, Ghana, Mali, Eritrea and CAR.

Cas Lötter, in his personal capacity, has also been involved extensively in consulting assignments in India (processed and interpreted 100,000+ line km of helicopter EM data)  and Iran (training of local geophysicists in electromagnetic surveying and processing). In Africa, he was directly involved in projects which led to the discovery or mapping of a resource eg. Kalgold on the Kraaipan Belt in South Africa, Lumwana and Sentinel on the Zambian Copper Belt, Golden Ridge, North Mara and Geita in Tanzania. He was also closely involved with the geophysical mapping of the T3 deposit in the Kalahari Copper Belt and commissioned, planned, supervised, processed and interpreted the helicopter electromagnetic survey which led to the discovery of the A4 dome deposit near T3.

Spectral's main areas of expertise are advanced processing and interpretation of airborne and ground electromagnetic data as well as 3D modelling of Induced Polarisation / Resistivity data. Spectral is currently concentrating on deep electromagnetic prospecting for metallic sulphides using the gold standard in transmitter and receiver technology available from Australia. Spectral has extensive experience with the application of TDEM and SQUID sensors in electromagnetic prospecting and have applied the technology successfully in Botswana, South Africa and Namibia over a period of six years.

Terms of the Strategic Partnership

Kavango and Spectral have entered into a Strategic Partnership, whereby Spectral will share with Kavango its technical knowledge to optimise future underground remote surveys in the KSZ.

Kavango has incentivised Spectral to prioritise physical surveys of the KSZ and to deploy its most powerful remote sensing technologies. The Strategic Partnership will involve Spectral making recommendations concerning the use of specific techniques and technologies to maximise the chances of success, identifying any large-scale conductors that may exist in the KSZ.

Kavango will share with Spectral results of any data analytical work it receives from third party geophysicists, employed to provide independent assessment of survey data. Kavango expects any third party analysis will help augment and calibrate future surveys conducted by Spectral in the KSZ.

In return for Spectral's commitment to the Strategic Partnership, Kavango will issue Spectral 3,000,000 Partnership Shares, at an issue price of 3p per share. The Partnership Shares will be held with First Equity for a 12-month lock in period

In addition, Kavango will issue Spectral with warrants to subscribe for up to 3,000,0000 new ordinary shares, exercisable at 4.25p a share with a 4-year exercise period from the date of signing the strategic partnership agreement between Kavango and Spectral (the "Partnership Warrants"). The Partnership Warrants will vest in 3 tranches, set out in the table below:

 

Spectral Partnership Warrants Vesting Tranches

Tranche

Exercise Price

Number of Warrants

Life of Warrants

 

Vesting Condition

1

4.25p

1,000,000

4 Years

 

Warrants vest on completion of FIRST 5 ground-based remote sensing surveys in the KSZ

2

4.25p

1,000,000

4 Years

 

Warrants vest on completion of SECOND 5 ground-based remote sensing surveys in the KSZ

3

4.25p

1,000,000

4 Years

 

Warrants vest on completion of THIRD 5 ground-based remote sensing surveys in the KSZ

 

 

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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 additional information please contact:

Kavango Resources plc   

Ben Turney

[email protected]

 

First Equity (Joint Broker)

+44 207 374 2212

Jason Robertson 

SI Capital Limited (Joint Broker) 

+44 1483 413500

Nick Emerson

 

Note to Editors:

THE KALAHARI SUTURE ZONE

Kavango's 100% subsidiary in Botswana, Kavango Minerals (Pty) Ltd, is the holder of 14 prospecting licences covering 7,573.1km2 of ground, including 12 licences over a significant portion of the 450km long KSZ magnetic anomaly in the southwest of the country along which Kavango is exploring for Copper-Nickel-PGM rich sulphide ore bodies. This large area, which is entirely covered by Cretaceous and post-Cretaceous Kalahari Sediments, has not previously been explored using modern techniques.

The area covered by Kavango's KSZ licences displays a geological setting with distinct similarities to that hosting World Class magmatic sulphide deposits such as those at Norilsk (Siberia) and Voisey's Bay (Canada). 

The Norilsk mining centre is about 2,800km northeast of Moscow and accounts for 90% of Russia's nickel reserves, 55% of its copper and virtually all of its PGMs. Kavango's licenses in the KSZ display a geological setting with distinct geological similarities to the magmatic sulphide deposits at Norilsk. Magma plumbing systems are a key feature of these deposits.

KSZ DEFINITIONS

High Speed EM Conductors: are bodies of highly conductive minerals such as graphite, magnetite and metal sulphides, which conduct electricity very rapidly provided the mineral grains are in contact with each other.

Gabbro/gabbroic:   A coarse grained, medium to dark coloured rock, formed from the intrusion of mantle derived molten magma into the earth's crust. Gabbroic rocks (or "gabbros") are formed as the molten magma crystallizes and cools.

Gabbroic sills:   Relatively thin, planar, horizontal bodies of solidified gabbroic magma that intruded into layers of sedimentary rock whilst still molten.

Karoo: The Karoo System covers 1.5 million km2 of the semi-desert region of Southern Africa. Rocks in this system formed 180-310 million years ago.

Massive sulphide: When a deposit consists almost entirely of sulphides it is termed "massive". When it consists of grains or crystals of sulphide in a matrix of silicate minerals, it is termed "disseminated".

Metal/Magmatic sulphide: Deposits of sulphide mineral concentrations in mafic and ultramafic rocks, derived from immiscible sulphide liquids. To view a video of how metal/magmatic sulphides form please visit -

https://twitter.com/KavangoRes/status/1316004057895645186?s=20   

 

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