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Kavango Resources (KAV): KSZ Hukuntsi – Drilling to commence in June

KSZ Hukuntsi -Drilling to commence in June

Kavango Resources plc (LSE:KAV), the exploration company targeting the discovery of world-class mineral deposits in Botswana, is pleased to announce drilling will commence on two “proof of concept” geological holes in the northern (Hukuntsi) section of the Kalahari Suture Zone (“KSZ”) in June.

Kavango’s primary objective is to become the first company ever to retrieve drill core from the bottom of the “keels” of the Karoo-age gabbros in the KSZ. The Company anticipates that drill-core from these holes will provide firm physical evidence of the KSZ’s potential to host ‘Norilsk-style’ metal sulphide deposits.

To this end, Kavango has awarded a contract to Mindea Exploration and Drilling Services (Pty) (“Mindea”), a company operated under the Botswana Citizen Economic Empowerment Policy, to design, engineer and drill a minimum of two 500m boreholes (the “Drill Contract”). Drilling is planned to commence by no later than 30 June 2021.

Mindea has agreed to accept payment for the Drill Contract half in cash and half in Kavango stock (at an issue price of 4.53p per share).

Highlights

  • Drill contract key terms:
    • Mindea to drill a minimum of two 500m “geological” diamond holes at Hukuntsi
    • Cost per metre calculated on possible depth per hole of 800m
    • Mindea to design and engineer all bore holes
    • All bore-holes to be cased from surface into the gabbro intrusive to allow for extensive testing and geophysical surveying
    • Bore-holes will be oriented -80° from the horizontal
    • Core samples (HQ and NQ size) to be recovered for geological logging, whole rock geochemistry and assaying.
    • Key safety protocols and COVID-security processes agreed
    • Mindea to accept over half its fee in equity in Kavango, to be paid through the issue of shares in the Company at an agreed price of 4.53p per share
  • Drill targets:
    • Final drill collar locations to be confirmed later this month
    • A minimum of one hole to be drilled into Target A2 (announced on 20 April 2020)
    • Analysis of other potential drill targets ongoing, with results expected shortly
  • Planned testing programme on all boreholes:
    • Downhole electromagnetic (“EM”) surveys to be performed by Spectral Geophysics, with an anticipated search radius of 300m-400m from the drill string
    • XRF testing of sand cores to be completed by Kavango’s exploration team.
    • Core for assay and petrological work will be split by Kavango staff in Hukuntsi
    • Whole rock geochemistry and assay testing of core samples to be completed at the SGS laboratory in South Africa
    • Additional analysis of geochemistry and petrological/mineralogical studies to be performed in the UK by academic consultants.
  • Site preparation:
    • Site visits completed, camp location agreed and two water sources identified
    • The Company has engaged with the local community to secure its support
    • Drill rig mobilisation expected within the next week
  • Ongoing discussions with Equity Drilling Ltd (a 49% shareholder in Mindea) concerning a future potential strategic partnership
  • Budget in place for more extensive drilling campaign later in 2021

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

“The Kalahari Suture Zone was first identified 45 years ago. The technical challenges of pursuing exploration under 70m of Kalahari sands and sediments proved too much for previous companies that attempted to unlock this region’s significant potential.

Through the deployment of modern remote sensing technologies, sophisticated data analysis and persistent hard work, Kavango now aims to become the first company to retrieve drill core samples from the bottom of the “keels” of the Karoo-age gabbros here.

If we are successful this will be a major achievement for the Company. 

We believe core samples from the bottom of the gabbroic “keels” could provide us with the definitive proof we have been looking for that the KSZ could host one or more major deposits of nickel, copper and platinum group metals.

I am particularly delighted to be working with Mindea Exploration and Drilling Services on such an important project. Mindea is a well-established national drilling contractor in Botswana, having worked for Debswana and DeBeers. Equity Drilling, one of Mindea’s largest shareholders, also operates a highly regarded drill school in Gaborone, the first of its kind in Africa.

Kavango is committed to investing heavily in Botswana. Working with such reliable local partners as Mindea and Equity Drilling is integral to our ambitious growth strategy.

The fact that Mindea has agreed to receive over half of its fees in equity suggests considerable faith in the potential of the KSZ to host metal sulphide ore bodies and a great endorsement of Kavango’s exploration approach. For a minimal cash outlay, we can make significant advances with the KSZ Project, while keeping a budget in reserve for a more extensive drill campaign later this year.”

Background

Over the last three years, Kavango has conducted extensive geophysical surveys over Karoo-age gabbros at Hukuntsi using airborne and ground-based based technology. In 2019 Kavango completed a successful orientation drill programme, data from which helped augment the Company’s extensive 3D Magnetic Model of the region’s subsurface geology (announced 8 September 2020).

On 30 November 2020 Kavango released results from its analysis of the 3D Magnetic Model, which revealed close similarities between the gabbroic rock formations in the KSZ and those at the Norilsk mining centre, in northern Russia.

In December that year, the Company initiated the first ground-based Time Domain Electromagnetic (TDEM) survey of the KSZ. This was the first time this powerful remote sensing technology had been used on the KSZ.

On 20 April 2021 and 5 May 2021, Kavango released details of the results from the second TDEM survey, which defined Target A2.

Links to the relevant announcements are provided below:

Ø 08 September 2020 – https://www.investegate.co.uk/kavango-resources–kav-/rns/3d-model-confirms-ksz-norilsk-rock-formations/202009080700072794Y/

Ø 30 November 2020 – https://www.investegate.co.uk/kavango-resources–kav-/rns/4-norilsk-style-target-areas-selected-in-the-ksz/202011300700068179G/

Ø 20 April 2021 – https://www.investegate.co.uk/kavango-resources–kav-/rns/ksz-hukuntsi—tdem-conductor-identified/202104200700039575V/

Ø 05 May 2021 – https://www.investegate.co.uk/kavango-resources–kav-/rns/ksz-tdem-update-and-warrant-exercise/202105051000016206X/

The Company now proposes to drill at least one 500m borehole into Target A2, with a second hole also planned in the area. Final confirmation of specific drill collar locations will be confirmed in the coming weeks.

About Mindea

Mindea Exploration and Drilling Services (Pty) LTD was formed in September 2019 by Equity Drilling Limited and Maureen Mokgaotsane (Geologist), Sebanka Lobatlamang (Geologist) and Eddie Babuseng (Attorney at Law) to provide complete exploration solutions to its clients in Botswana.

Mindea is currently operated under the Botswana Citizen Economic Empowerment Policy and is owned 51% by local shareholders and 49% by Equity Drilling. Over the coming years it is expected that Botswana nationals will wholly own Mindea, with Equity Drilling continuing to provide strategic and technical support.

Mindea operates to strict international safety standards and deploys the latest equipment to its projects. Mindea is rigorous in its planning and site preparation.

Reflecting the quality of its operations, Mindea has recently been awarded a 3-year contract by Debswana to drill various national projects in Botswana. In addition to this, Mindea is a regular drill contractor for DeBeers.

About Equity Drilling

The owners of Equity Drilling are extremely experienced drill operators, with extensive experience of successfully working on technically challenging projects across Africa.

Equity Drilling established Africa’s first Drilling School in Botswana, the Africa Mining and Drilling Institute (“AMDI “)

AMDI is Botswana Qualifications Authority (BQA) certified, which offers internationally recognised certification to all students wishing to be taught exploration drilling. AMDI has an exclusive working relationship agreement in place with the Australian Drilling Industry Association (the “ADIA”) and offer the ADIA’s DICAT curriculum with a strong emphasis on safety in the workplace.

AMDI also offers funds the delivery of pre-industry courses to students from local communities, who have had no previous work experience. This course prepares students for the work place and making them eligible for placement into the industry on graduation. Mindea’s own labour resources have been drawn from these pre-industry course graduates

About Target A2

Kavango estimates Target A2’s properties are:

–    1km length, which is open along strike

–    Extends between 250m to 700m below surface and is gently dipping

–    Decay constant of approximately 340msec and conductance of approximately 3000 Siemens, readings   which Kavango management considers are consistent with nickel sulphide deposits elsewhere in the world

–    Located in the right geological setting, at the bottom of a “keel” in the gabbroic intrusion, according to the Company’s Magnetic 3D-Model (8 September 2020)

————————————————————————————————————

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

bturney@kavangoresources.com

First Equity (Joint Broker)

+44 207 374 2212

Jason Robertson             

SI Capital Limited (Joint Broker)

+44 1483 413500

Nick Emerson

The Future Is bright, The future is Platinum

What was seen as a devastating blow by VW to the platinum market has suddenly become completely irrelevant to the metals future.

The price of platinum has risen 14% from its 7 year low of $893 at the beginning of October and all because Toyota is moving big style into hydrogen fuel cell cars, each of which needs an ounce of platinum as against a mere 2-4 grms for your average gasoline or diesel vehicle.

On the 16th October Toyota launched in Europe, home of the VW empire, its first first mass produced fuel cell car. Already the despair of only 2 or 3 weeks ago has disappeared and turned the market for platinum on its head.

Buy a fuel cell car in Japan and the Japanese government will give you $25,000, equal to 50% pf the cost of the car. Toyota is spending billions to try and reduce the amount of platinum needed by a fuel cell car but even if it reduces it by 50%, each car will still need 12-15 grms, double or triple the present amount per vehicle.

Because of VW’s ills,Toyota will quickly regain its crown as the worlds largest car maker in the very near future and Toyota sees its long term future in fuel cell powered vehicles.

The future for platinum lies not just in cars. By 2030 the Japanese government plans to install fuel cells into 10% of Japanese households, to replace grid electricity.

Other car manufacturers are bound to jump on the fuel cell bandwagon. Countries other than Japan are also bound to start using alternatives to “dirty” electricity.

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Mayhem Amongs The Miners (2)

Question – does it make sense for the worlds giant mining companies to be ramping up production when metal prices are in freefall. The answer must surely be – of course not – so why are they doing it ?

In iron ore Rio Tinto and BHP Billiton have increased production so much that they have created a glut and caused a slump in prices. On the 8th July iron ore hit an all time low of $44 per tonne.  The following day it rocketed by 9% and a further 3% on the day after that and now stands at over $50 per tonne. These are huge unexplained movements in the price of one of the worlds major commodities.

But these prices have to be seen in perspective. Iron ore halved in price in 2014 and has fallen a further 30% this year but for 25 years until 2004 the price had remained comparatively steady at never less than $10 and never more 14 per tonne. And then the great super cycle started. In 2005 the price rose by 71%, in 2008 it rose by 68% and in 2009 it reached the magic $100 per tonne. On the 16th February 2011 it peaked at a massive $191 per tonne and wasn’t the world a happy place in those halcyon days when the worlds bankers had just woken up to their new role as masters of governments and rulers of countries. Economic power had arrived.

In May South African production of platinum was increased by 88% over the previous May’s figure and the price of platinum fell to 2008 levels. Surprise, surprise.

In the first half of 2015 diamond prices fell by 3.4%, despite the fact that they don’t create diamonds any more. Every diamond dug up is one less for the future.

Gold is still collapsing and last week hit a 5 year low at $1080 per oz. Gold mining shares had a blood bath after an alleged bear raid by the Chinese. But despite that, gold is still worth nearly 3 times more than it was in 2004 when it stood at $400 per oz. before the start of the supercycle.

In the financial world, nothing goes up for ever, be it shares, commodity prices or whatever. A share which has a massive spike, always collapses even if the fundamentals for that share have not changed. The law of gravity always takes over in the end.The spike in gold and other metals was huge. All that has changed is that China is not growing as fast as it was. But believe the media and you would conclude that in a couple of years time, the Chinese will all be back working in the paddy field. How many times does one read that a fall in this and a fall in that is caused by slower growth in China. How can slower growth lead to a fall in anything. It can’t, it can only lead to a further rise. But from molehills come great mountains and thus can trends be accelerated and magnified until the next expert comes along and decides to try and reverse the trend.

So, why do those miners keep ramping up production – perhaps it is something very simple, like misguided fairly cluless management, trying to plan things too far in advance.

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