Kavango to raise US$20 million for exploration, development

London-listed Kavango Resources plc, an exploration junior in the African mining sector, has announced its intention to raise as much as £15 million (US$20 million) to accelerate its exploration and development efforts in Zimbabwe.

The funding is crucial as the company aims to capitalise on the untapped potential of the region’s gold and copper deposits.

Kavango has two key projects in Zimbabwe; the Hillside Gold Project, which is located in the Archean Greenstone Belt, and is known for its potential for gold deposits. The Hillside project is Kavango’s first 100 percent owned project in the country.

“The greenstone belts remain underexplored and underdeveloped, presenting a significant modern opportunity,” said Kavango.

The second one is the Nara Gold Project, situated approximately 18 kilometres southeast of the Hillside project. It contains four historic past-producing gold mines and is currently undergoing due diligence and field exploration.

These projects are part of Kavango’s broader strategy to explore and develop mining opportunities in Zimbabwe, leveraging the region’s rich mineral resources. The company has reported operational profitability at the Hillside project, with an average production of approximately 1 kg of gold per month as of now.

In the future, it intends to commission a 100t/d gravity gold recovery plant by the end of the first half of 2025, which is expected to significantly increase production capacity as gold production grows at Hillside. The plant is designed to be modular, allowing for expansion as needed.

The Nara project contains four historic past-producing gold mines, with a combined total recorded production of over 90 000 ounces of gold. Kavango is currently completing due diligence and field exploration to assess the potential for underground mining at Nara. The project has not seen modern exploration along more than 4 km of strike, indicating significant untapped potential for discovering new gold deposits.

There is also a historic tailings dump at Nara with a resource totaling more than 6 000 ounces of gold, which could contribute to production if economically viable recovery methods are established.

Both projects present significant production potential, with Hillside focusing on immediate production increases and Nara offering long-term exploration and development opportunities.

Kavango’s ambitious fundraising initiative comes at a time when the mining industry faces several challenges, including regulatory uncertainties, fluctuating commodity prices and the need for sustainable mining practices. However, Kavango is positioning itself to mitigate these challenges through a robust strategy focused on local engagement and operational efficiency.

The balance between the inherent risks of the mining sector and the promising opportunities in Zimbabwe could define the company’s trajectory in the coming years.

The company’s first-mover strategy in Zimbabwe is positive, as it seeks to identify and develop economic, bulk-minable gold deposits. By focusing on high-grade shear-hosted deposits, Kavango aims to bring these resources into production in the near term, potentially enhancing profitability and operational resilience.

Kavango’s plans include the acquisition of new projects, investment in mining development and a listing on the Victoria Falls Stock Exchange, which could further enhance its visibility and credibility in the market. The company is also focusing on exploration and development costs in Zimbabwe, particularly at its Hillside and Nara projects, which are expected to yield significant returns.

The proceeds from investors will be strategically used to support exploration, operational sustainability, project acquisitions and market presence, positioning Kavango for future growth and success in the mining sector.

Approximately £3.37 million is allocated for exploration and development costs in Zimbabwe, specifically for drilling at both the Hillside and Nara projects. This investment aims to accelerate exploration activities and enhance resource identification.

About £1.76 million will be used for general working capital, covering operating expenses and overheads over the next 18 months. This ensures that the company can maintain its day-to-day operations effectively.

Part of the proceeds will support the company’s listing on VFEX, and funds will also be allocated to a capital investment programme aimed at increasing small-scale production, particularly at the Hillside project, which is expected to enhance overall production capabilities.-ebsnessweekl