I recently asked you to get in touch to let me know the biggest question you had about what we’re up to at Kavango right now.
As I said when I started this newsletter, as much as possible I want this to be a two-way street.
So, if you ever have any specific issues you’d like me to explore, don’t hesitate to hit reply to this email and get in touch.
I had a great response to my last email, and I’d like to thank everyone who wrote in.
Today, I wanted to run through a handful of the questions I received and offer some further insight into what we’re doing—and where we’re heading—here at Kavango.
Indeed, the first question comes from Graham.
He asks:
“How far ahead does our current funding take us?
This is never an easy question to answer, as a number of variables come into play.
Put simply: it depends what we end up doing, and that, in turn, depends on the results we get in from our various work programmes.
That being said, our current programmes are fully funded out into next year, and if market conditions move the right way, money from warrants could also give us a considerable boost.
If we do get additional money, the decision would then have to be taken as to whether we expand and accelerate existing activities, or budget out further into the future.
Another consideration is that, with the breadth and strength of our portfolio, there is always the possibility that a funding partner might want to come in on one of our assets.
If that was to occur, then obviously new budgets would have to be drawn up.
Meanwhile, Shaun asks:
“What is the share price going to be if you make a discovery?”
It’s not proper for a company or any of its directors to speculate on where its share price might go.
So, I won’t.
But what I can talk about is volume. Experienced investors know that volume in any stock is key. It is something I watch closely with Kavango. Although our share price is down considerably over recent months, this has not been reflected by a similar increase in volume. This tells me that when conditions improve and if we can deliver in the field, then we should be well positioned for a strong recovery.
If the KSZ delivers up the types of mineralisation that we are hoping for, it could be transformational.
The discovery of a Norilsk-style deposit, or potentially an iron-oxide-copper-gold (IOCG) project lower down, would represent an enormous value-add and would undoubtedly be recognised as such by the mining industry and the wider market.
The effects of a discovery at the KCB might not be quite so substantial, but they would still be very significant.
Meanwhile we also have the Ditau drill results we are waiting on, in particular that 28m “Zone of Interest” from Hole DITDD004.
We’ll keep working to hopefully realise some of opportunities.
A very specific, but interesting question here from Marcus.
He asks:
“When do you expect to get the drill bit turning at the KCB?”
This something I’m particularly excited about, especially now we have announced the deal with Power Metal to buy them out of the Kanye JV.
Plans are ongoing to initiate drilling on the Kalahari Copper Belt and, at the moment, it looks as though the drill bit will start turning towards the end of the third quarter.
Preparatory work is already well underway…
Soil sampling is nearing completion…
And we expect to put out a further update on our progress and our plans for drilling at the KCB shortly. The mapping we have done in the first half has been extremely successful, where we’ve confirmed the Ngwako Pan-D’kar formational contact. This could prove to be an extremely important lead for us, in our hunt for copper/silver deposits.
Keep an eye out for that.
Meanwhile, Susan asks:
“How do you think current market sentiment will affect Kavango?”
Well, there’s no doubt that market conditions are tough right now.
Metals prices have been under pressure against a strengthening dollar and expectations of a slowing in the global economy generally.
Against that, there has been some respite from the lifting of the more onerous covid restrictions in China.
But two factors above all have been affecting sentiment in my view: inflation, and the war in Ukraine.
Inflation will take a while to get under control, but the war in Ukraine might end rapidly, given the right political will.
Meanwhile, investors remain cautious about allocating their funds into more risky sectors.
But that’s what dynamic companies like Kavango must always live with. At the end of the day, sentiment doesn’t create value, but the drill bit does.
So, regardless of what the market is doing, we get on out there and continue to make things happen on the ground.
And there we have it for this ‘mailbag’ issue. I hope you found that useful and thanks again to everyone who sent in a question.
I’ll be sure to do more mailbag issues like this in the future, so feel free to keep sending your questions in and I’ll save them up to answer together in a future instalment.
In the meantime, I’ll be back in touch soon with another edition of Boots on the Ground.
