Shares in Kavango Resources (LSE:KAV) bounced 2.2pc to 2.3p today after the newly-listed exploration firm announced that it has further built up its position in Botswana’s prospective Kalahari Suture Zone (KSZ).
The business has acquired three new prospective licences covering 2,300km2 in the KSZ, an extended magnetic anomaly where it is looking for nickel, copper, and platinum group metals-rich sulphide orebodies. Kavango now holds 15 licences covering c.80pc of the entire KSZ, which, according to the firm, contains distinct similarities to the Norilsk/Talnakh deposits in Siberia, host to the world’s largest Ni-Cu-PGE mine.
Kavango said the new licences will allow it to properly cover critical areas of prospectivity following the completion of the first phase of an airborne electromagnetic (AEM) survey earlier this month. The AEM survey identified 26 conductive anomalies over the KSZ, some of which coincide with geochemical anomalies that have been previously discovered by Kavango.
Two of the new licences announced today are contiguous and immediately adjoin the northern area covered by the first phase of the survey.
Kavango’s chief executive Michael Foster said: ‘Extending our land position to a total of 9,231 km2 following the assessment of our recent work provides the Company with an important strategic ground holding on the highly prospective KSZ. It is worth emphasising again that the KSZ is a 450km long under-explored magnetic feature of geological significance in the south-west of Botswana. Results of our on-going exploration programme in the KSZ area will be provided to the market in the near future, as they become available.’
Despite making steady progress in Botswana since listing in July, Kavango has struggled to attract the attention of investors to date, with shares presently sitting below their 2.5p listing price.
However, Mike Moles, one of Kavango’s founders, told us last month that he expects the entire programme to be finished by the end of 2018, with the firm providing regular updates throughout the process. He added: ‘We think it is essential to keep updating the market about the progress of the programme and any significant results we encounter along the way.’
With this in mind, it is certainly encouraging that shares have reacted favourably to today’s news. If Kavango can deliver further positive updates as the AEM progresses, it will be interesting to see if it can break ahead of its placing price.