It’s been an extremely busy period for Kavango, and for me personally.
With so much going on, I’ve not had nearly enough time as I’d like to update you on the progress we’re making.
Thankfully, I’m back in the UK now after a research trip to Southern Africa, and I’m busy actioning many of the plans we’ve been developing.
In fact, you may have already seen our news release about our new strategic plan.
In case you’ve not had a chance to read the RNS yet, it’s worth reviewing the three key pillars of the strategy.
Here’s the first pillar:
1. Botswana Exploration
Kavango's technical team will execute the Company's updated exploration plan in Botswana, with the support of external expert exploration geologists. Over 2023, Kavango will conduct focussed exploration on the Great Red Spot ("GRS") in the Kalahari Suture Zone ("KSZ"), which will include drilling the B Conductors. Kavango will also continue further fieldwork and drilling in the Kalahari Copper Belt ("KCB") across its Karakubis block and investigate the Iron Oxide Copper Gold (IOCG) model for the GRS and the precious metal potential at Ditau.
The next key element is in regard to financing:
2. Botswana Project Financing
In parallel to the Botswana exploration plan, Kavango's commercial team will seek direct project funding to finance 2-year exploration programmes for the Company's KSZ, KCB and Ditau projects. Kavango has advanced all three projects to the point where direct finance will enable the Company to pursue much more extensive exploration. Expanded exploration programmes will include more widespread surveying (geophysical and geochemical), sharper targeting and extensive drilling. Kavango believes securing one or more project finance partners would significantly increase the chances of success in Botswana.
Finally, we’re looking to expand our portfolio:
3. Portfolio Expansion
Kavango will seek to acquire prospective metal exploration projects, with the potential for near-term economic discoveries, in Southern Africa. Following completion of its strategic financing in Q4 2022, Kavango is well-positioned to take advantage of liquidity weakness in the global exploration sector. The Company has put together a skilled exploration team, built a strong regional presence in Botswana and identified a pipeline of possible acquisition targets. The Company has been evaluating a number of these opportunities and is at advanced stages of due diligence for two possible acquisitions.
Of course, this is a high-level look at what we plan to do. Over the next few weeks, we’ll share more detail about our specific operational plans.
But today, I want to start unpicking the overriding plan by speaking openly about where we are right now.
The bottom line is, I believe we’re in a very strong position.
In Kavango, we have built what I think is a very good exploration company.
We have three excellent projects on our books, and we’ve now run many of the hard yards. Our ‘proof of concept’ drill campaigns have significantly deepened our understanding of our ground and enabled us to sharpen our focus in the next phase of exploration:
- We have plans in place for exploring the B conductors at the Kalahari Suture Zone
- We have the work we’re doing at Karakubis (which I’ll update you on soon), and...
- We have the precious metals lead at Ditau
With each of these projects, we are designing new work programmes that will give us clear decision points to act on and lead to clear results.
Indeed, it’s important to point out that, as a business, we have moved beyond the proof-of-concept stage in Botswana.
The next time we mobilise the rig it will be for discovery drilling…
Make no mistake. At Kavango we all understand the importance of this work and how it is imperative we make tangible progress.
But still, these are large-scale plays. There aren’t many companies of Kavango’s size that have tried to pull off what we hope to achieve and I understand that shareholders want to see progress, to see clear value being added.
To this point, I recognised last summer that we needed to balance our portfolio.
Botswana is a very positive jurisdiction, a very safe place to explore. But as I’ve spoken about before, the Kalahari sand cover makes it a very challenging jurisdiction too. Our entire exploration strategy is geophysics led. We have very little surface geology to work with, which makes our job that much harder.
That’s why, in the background, I’ve been working on expanding our portfolio into a new jurisdiction to help bolster our work in Botswana.
I’ve been out in the field, visiting potential sites and meeting local operators with an extremely experienced exploration geologist. My goal was to discover as much as I could on the ground about the jurisdiction I hope to take us into. Above all, I wanted to learn all I could about the practicalities and risks of the local operating environment, from logistical issues and the local employment market to the strength of local infrastructure.
My ultimate goal in all this is to add opportunities to our portfolio where there is clear (at surface!) geological potential and the chance of nearer-term commercial wins.
This is key.
The fact is that the technical work we’ve been doing these past few years has been focussed on really deep targets. While this has made our jobs harder, it has put us in a very strong position to be able to deploy our skills on “easier” ground.
I now want to put our technological edge to work and apply those advances (such as we’ve made with CSAMT) to areas where there is outcropping and, as I say, more attractive geology much closer to surface.
So, as part of our new strategic approach, we’re putting together a comprehensive plan to explore this new jurisdiction. Peter Wynter Bee, Brett Grist, and I will go to see our main new proposed project. As soon as I’m able to reveal more information about it, I will.
Ultimately, as I say, this is about balance.
More than anyone else, I am keen to deliver not just long-term success to Kavango shareholders, but near-term success too.
Our work over the last few years has placed us in a position to do that, but at the same time, it’s important to reflect on where we are and put in place a clear strategy that will enable us to realise our full potential.
The release of our new strategic plan is another step towards achieving this, and, over the coming weeks, you’ll see there are many more developments being realised that I hope will help us progress even further.
It’s a very exciting time and I’m looking forward to what the next leg of the Kavango journey may bring.
