"You can’t see the forest for the trees."
 
It’s an old cliché, but there’s something to it.
 
It is easy to get lost in detail, to forget about the bigger picture.
 
Don’t get me wrong, it’s in the detail where the most exciting data often reveals itself. It’s why we spend so much time and energy analysing the information we gather from the various surveys we carry out across our projects.
 
But sometimes, when you spend so much time zoomed in, you forget to zoom out too.
 
You forget to take in the wonder of the forest, having become so distracted by how attractive the trees are.
 
At our various projects across the Kalahari Copper Belt, there’s been so much data flying around the place that I feel this has happened a little.
 
Be clear: exploration lives and dies on making discoveries.
 
And making discoveries all comes down to finding hard evidence in the ground. That’s why you focus so much on the detail.
 
But the smart money is always ahead of the game. It sees things that little bit earlier. It takes a risk, sure, but why—what justifies that risk?
 
There are many factors. But I think one of the key ones is being able to see the bigger picture, being able to see the trees AND the forest.

There’s momentum building around the KCB

Right now, I think there’s a lot of trees to see in KCB.
 
Not literally. It’s pretty arid land. But as far as detail goes, there’s all manner of data coming out that is extremely encouraging.
 
Across the 12 licences we’ve got interest in in the region, and recent news has been very positive.
 
For example, the recent soil sampling at Mamuno looked to confirm the underlying geology we’d already mapped, suggesting the presence of anomalous copper.
 
Likewise, the same work confirmed two major drill targets at licence PL082/2018, where the red metal is interspersed along strike lengths of 8km and 27km.
 
As I write, we’re planning drill campaigns that could extremely significant.
 
But as I say, sometimes it pays to step back too.
 
It pays to look at the bigger picture.
 
Being on the ground in the KCB recently allowed me to see it myself. There’s a buzz there, things are moving, momentum is building.
 
We’re not the only company to realise the potential here.
 
Sandfire, Cobre, and Cupric Canyon are all in the region, too.
 
Why?
 
They also see the forest as well as the trees.
 
Indeed, competition for licences is fierce, which is why it’s so positive that we’ve got exposure to 12 in the area, covering a massive 5,257 sq km.
 
But zoom out again...
 
From the detail of what’s going on under the surface...
 
To the companies who see the potential…
 
To the fact that the demand for copper is only set to increase.
 
As Nathaniel Bullard writes in Bloomberg: "Demand for the metal used in solar panels, wind turbines and power lines will far outstrip supply."
 
He goes on…
 
"Copper is one of the essential elements of today’s economy, and tomorrow’s. It’s in the turbines and solar modules that generate electrons, the transmission and distribution lines that carry electricity to consumers, the home wiring that delivers it to dishwashers and iPhones, and the motors that move everything from elevators to electric bicycles.”
 
“I think of copper as a common carrier, so to speak, of decarbonization. It is literally the wiring that connects the present to the future."
 
That’s my emphasis.
 
Because it's an important point to remember. It's another reason why what's happening at the KCB is so exciting.
 
Bullard sites a research report carried out that suggests:
 
"Copper demand will increase by more than 50% between now and 2040."
 
That’s huge.
 
This is the forest. This is the bigger picture that our work at the KCB is playing into.
 
It’s why I’m so positive about our progress right now, why we’re pushing hard not just at the KCB but across our interests in Botswana where things are all moving in the right direction.
 
We’ll keep analysing the detail, learning what we can from the data...
 
But we’ll be keeping an eye on the bigger picture too. Because right now, it’s looking very interesting.

Take a look at this picture:

It looks like an unassuming road sign, signalling the turn off to a town called Hukuntsi.
 
In fact, that’s exactly what it is.
 
Chances are, very few people have ever heard of Hukuntsi.
 
But as we drove past this sign and into Hukuntsi itself, I couldn’t help but think about Norilsk in Russia, perhaps one of the most successful mining regions in the world today.
 
Before the extensive discoveries of nickel and copper at Norilsk, I doubt anyone would have heard of it either.
 
Of course, we don’t know if Hukuntsi will become as big as Norilsk, or if there’ll be any significant discoveries at all.
 
But how I felt driving into Hukuntsi sums up how I felt throughout my trip to Botswana.
 
The idea that I could very well be witnessing and visiting places that could one day be considered legendary, at least in the world of mining...
 
Well, we’ll see.
 
Indeed, the whole trip, I must say, was incredible.
 
Not just because I saw so much that made me excited about the potential of the projects we have on the ground in Botswana, but because the people, the culture, the general sense of excitement and togetherness, was brilliant.
 
Botswana is a beautiful place.
 
As I mentioned in my last Boots on the Ground dispatch, the intel we’ve been getting has been excellent too.
 
And I’m sure you’ve seen that it’s been a busy period for news out of many of our key projects.
 
It was great. But so was meeting so many like-minded people face to face. You get to pick up a lot more insight and detail when you’re there in person.
 
Here we are with the team from the LVR project:

After the excellent exploration results at the LVR licences, we’re very pleased with how this project is coming along and the team involved are great. We spent quite a bit of time last Sunday on PL082 and, I have to say, you can feel the excitement around the targets we’ve identified.
 
One thing that really struck me on this licence was that this is one of the smallest in our portfolio but is a company maker in its own right. The primary target zone is 27km long. I can’t think of another small cap junior exploration company valued at our current market cap that has so many high-quality, large-scale targets on its books.
 
We’ve got big plans for the whole Kalahari Copper Belt, and we’re keen to get drilling. My overriding sense is that once we make one discovery, this will be the catalyst for a significant positive rerate in our share price, as the market truly starts to grasp the potential Kavango has to offer.
 
I expect some more key developments there before too long.
 
Indeed, when you’re on the ground and meeting so many people, you really get to sense the buzz around what’s going on, and there is a real buzz around the whole KCB right now.
 
Now that we’re on the verge of securing 100% of the licences from Power Metal, we are primed to become one of the largest landowners in the area, and will have access to some of the most prospective ground.
 
Hopefully, that will eventually be reflected in the buzz around Kavango itself.
 
The visit to the Botswana Stock Exchange was a particular highlight. There is nothing to report right now, but I have a number of initiatives I’m working on, so let’s see where they take us:

Over at the KSZ, things are looking very interesting too
 
Of course, though it’s important to be having the right conversations and the right meetings, my trip wasn’t just about shaking hands.
 
I was keen to get out on the ground and see for myself what’s going on.
 
Before we visited the KCB, we were over at the Kalahari Suture Zone.
 
In fact, here I am inspecting some of the deepest rocks that have ever been recovered from the region:

As well as being some of the deepest samples we’ve ever extracted, what’s more significant is that fact that we now know—thanks to Richard Hornsey’s report—that they are medium enriched for platinum group metals.
 
This is positive news and because of the work on the ground, we’re upgrading our exploration models as fast as we can to see just how much of an opportunity this could be.
 
Meeting the teams at the Tshane (KSZ/Ditau) and Ghanzi (KCB) basecamps was a real pleasure, and I must say to them, and to everyone who looked after us on the trip, how much we appreciated it their hospitality and hard work.

I’ve mentioned the KCB and KSZ and I should mention Ditau too.
 
You will have seen the significant news that we’ve intersected a gold mineralizing system there.
 
And that we’ve identified copper and iron oxides too.

There’s still work to do, but naturally, there was a lot of excitement and it’s the first time the more experienced members of our team were able to perform a review of the physical cores.
 
That the area is rich in iron oxides and has anomalous copper and gold could be significant.
 
As ever, we’ll keep you posted on how it develops and as soon as we know more, so will you.
 
All in all, as you can probably tell from all the positive news that’s been coming out in the past week or so, our boots on the ground trip to Botswana was a real success and a real pleasure.
 
Will the places I visited one day be as well known in our circles as the likes of Norilsk as I wondered at the start?
 
I can’t say for sure.
 
But the buzz I felt on the ground, the excitement and dedication people bring to the area to find out, and the significant results that are now starting to emerge from the various projects we have there...
 
It fills me with a lot of confidence.

Things are moving.
 
And fast.
 
After the proof-of-concept report we had compiled by Richard Hornsey recently, we’ve just struck a deal with Tamesis to help us bring on more investment to help take things to the next stage.
 
That could mean a joint venture, an earn-in or a more direct investment...
 
The end game is the same.
 
Bottom line: we’re looking to draw as much value for shareholders out of the opportunity we have at the KSZ as we can, and all these recent developments will help do exactly that.
 
It’s an exciting time.
 
But the work never stops.
 
Indeed, I write this to you not from my usual base down in Hampshire, but from my hotel in Gabarone, Botswana.

(Touching down in Botswana.)

That’s right, this instalment of Boots on the Ground really does live up to the name.
 
After arriving earlier in the week and catching up with various contacts, I met up with the Kavango team.

(Team Kavango set for business.)

We’re here for a whole host of meetings and presentations, before heading out this weekend to do some field work that I’m very excited about.
 
In fact, talking of excitement, as a small aside, I was very excited to get to meet a geophysics legend the other night, the great Cas Lotter.
 
Cas has been in the game for decades and there isn’t much he doesn’t know about what’s going on beneath the surface of the earth.
 
It was an absolute pleasure to get a chance to talk to him and pick his brain.
 
Cas is involved in a lot of exciting projects at the moment, and we spoke of how positive we both feel about where things are heading generally in the mining space right now.

(A genuine pleasure to meet Cas Lotter.)

Now it’s back to business, though…
 
Myself, Hilary, Brett and Tipps have all got a lot of work to do over the next few days and we are very interested to see how things are progressing out in the field.
 
As you can imagine, with all that’s been going on recently, and with everything we hope to learn from this trip, there’ll be a lot of news coming very soon.
 
But I can give you a few insights right now into what’s happening on the ground here.
 
Indeed, I can tell you that there is a lot of drilling going on around the Kalahari Copper Belt.
 
From what I’ve been seeing and hearing, this story is much bigger than I think many realise.
 
In fact, there are new mining pits from previous discoveries in the KCB that are being prepared for production, which is obviously a very bullish sign.
 
I’m keen to speak to more people and figure out just how big the scope is, but even from the conversations I’ve had already, I’ve picked up a whole host of helpful pointers for how to optimize our own drilling later this year.
 
That’s one of the great things about being on the ground like this. You really do get to see what’s really going on and can draw a lot from the lessons that others have learned.

It’s already been a great trip and there’s still a lot to see.
 
Of course, I’ll keep you updated here and elsewhere. But for now, I must get moving—exciting times ahead.
 
Though, before I do sign off for now, as you may have seen, we announced this week that one of our co-founders Mike Moles is retiring.
 
The fact of the matter is, we would simply not be where we are today without Mike’s work and everyone here at Kavango is eternally grateful to all the fine guidance he’s given.
 
The good news is, he’s agreed to stick around to guide us still, so though he’s stepping down in an official capacity, we’ll still have his wealth of experience on our side.
 
Thanks again, Mike. I know you’re as excited about Kavango’s future as I am.
 
And I’m sure you are too, dear reader. Things are coming together very nicely.
 
I’ll be in touch again with more news soon.

You have a hunch there’s something in the ground.
 
You stake that land.
 
You do a few surveys, check there’s something there and then drill to make sure.
 
If there is something there, you’re sorted. If not, it’s back to the drawing board.
 
If only exploration was as simple as that.
 
And as quick.
 
Sadly, it’s not. Yet I think a lot of the stress and strain of being an investor (and in running an exploration company) is that we still, to some extent, think it should be as simple as that.
 
The truth is it takes time.
 
It can take a lot of time.
 
Take what we’re doing with Kavango.
 
Ever since our founders Mile Moles and Hilary Gumbo first had a hunch there was something in the ground at the KSZ in Botswana, it’s taken a long time to get to where we are today.
 
I know that some investors, especially those who’ve been on board from the early days, will wish we’d have got to where we are today faster, but when you take a step back and consider the sheer amount of work involved, you realise why exploration takes as long as it does.
 
Frankly, I’ve had to learn this myself the hard way. Living through the whole process and all the ups and downs that go along with it.
 
I remember when we started carrying out surveys of the KSZ (the Kalahari Sutra Zone), and we started to see some very promising formations.
 
I think even then, a little part of me thought (despite my better knowledge) that once we drilled, we’d be away.
 
But you soon realise that even surveys can be time consuming in themselves (especially when you’re using new technology and pushing the boundaries as we’ve been doing here at Kavango), you realise exploration is a patience game.
 
Still, once surveys are done, you’re eager to drill.
 
Yet, once again, there’s a misconception that the drilling will give you a clear “yes or no” answer.
 
But it doesn’t work like that.
 
By this point, the data is really starting to pile up. Things are getting complicated. There are options, choices to be made. One choice might lead you down one path, a different choice another.
 
All the time there’s the financials to consider, which choice you make will influence the capital you’re spending.
 
But you consider the data, you make a call, you drill and move to the next stage.
 
The next stage?
 
Testing.
 
Indeed, the “yes or no” answer (that I wish there was), is just an illusion.
 
Drilling is one thing but testing the drill cores, figuring out what they’re telling you: that’s a whole other ball game.
 
Again, look at what we’ve been doing at the KSZ...
 
One of the key metals we’re looking for is nickel. But because of the slump in nickel a few years back, a lot of people left the market, a lot of the experts moved on, making it difficult to find them.
 
On top of that, when the world changed again and demand for nickel started rising as it has recently, so has demand for expertise in the area.
 
The upshot? Even finding the right people to test your drill results takes time.
 
Thankfully, we found the perfect guy in Richard Hornsey, a leading authority on the nickel sulphides, to come in an put together a proof-of-concept report for us.
 
But consider that report is over 300 pages alone.
 
It’s far from the “yes or no” answer we imagine drilling would offer.
 
At this stage, as CEO, and as an investor, it can feel like the whole process is against you: overloading you with data and slowing things down to a standstill.
 
But there is good news.

In taking the time to move through each stage in the true time that it takes, in moving from hunch, to surveying the ground, to building up a picture beneath the soil, to drilling, to testing those drill results thoroughly and properly...
 
It all builds up to give you a package—an opportunity—you can be truly confident in.
 
More than that...
 
By taking the time, by compiling a truly comprehensive picture of a place like the KSZ, you begin to massively reduce financial risk.
 
You’re now able to have confidence in the whole “system” below ground.
 
That’s crucial.
 
Why?
 
Because it means that even if a future drill campaign misses the mark for whatever reason, you know it’s not a fundamental problem. You know—because you’ve got confidence in the whole system—you can go again, pursue another area in the system where you’re likely to have better results.
 
In a hit and hope scenario, if you had not put in the time to do all the work, if you had rushed things, that wouldn’t be an option.
 
Once again, just take what we’re doing at the KSZ...
 
Without doubt, it’s taken longer than I would have hoped to get where we are now, but my word, I’m so pleased we’ve taken our time and done things properly.
 
Thanks to the work we’ve done, the surveys we’ve done, the drilling we’ve carried out so far, the data we’ve acquired, the reports we’ve had compiled, we are in a stronger position than we’ve ever been.
 
We can seek out new partners with real confidence, we can show that we’re serious about what we can do, and we can be confident, truly confident, in the prospective systems we’ve uncovered.
 
We can also show our investors the wait was worth it.
 
Of course, it takes time.
 
But to borrow that famous line, I do believe “good things come to those who wait.”
 
Sure, I know it’s easy in hindsight to say that exploration takes time.
 
And I know it can be seen as an easy excuse for inaction or delay.
 
But at the same time, I know anyone who’s been following what we’ve been doing at Kavango will know we’ve not been inactive, we’ve not delayed. Far from it.
 
In taking the time we have to truly prove how what we’re doing at the KSZ could be a game changer, we’ve done a lot of work. We’ve continued to move forward at all times.
 
Indeed, I think when you take a moment to step back like I have here and really consider the process of exploration, you realise that it’s only by taking the time that we have (and riding the ups and downs that come in doing so), that you see a company who is serious about what it’s doing.
 
Right now, we have a very exciting and very serious opportunity in front of us that I believe will soon attract a lot of attention.
 
And hopefully you can see how seriously rewarding the work we’ve carried out could be.
 
Yes, there’s a way to go. Yes, there is still work to be done. But I do believe that the time we’ve take to come this far will be more than worth it.

Have you read the book Atomic Habits by James Clear?
 
It’s good, and I recommend it.
 
I’ve been reading it recently and I’ve taken a lot away from it.
 
One thing that got my attention was something James Clear wrote about making small improvements and how, by doing so, over time they compound to create big ones.
 
I know it’s not a new idea, but it is powerful.
 
I’m sure you’re familiar with Einstein proclaiming that compound interest is the eighth wonder of the world.
 
“Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn't, pays it.”
 
But still, when I came across this section in Atomic Habits, it struck a chord with me.
 
I think it’s partly down to where we are right now with Kavango.
 
Here’s a snap from the book I found on Twitter:

You can see the idea right away.
 
If you aim to be just 1% better at something every day, the cumulative effect soon gives you a much greater return than the initial promise of a 1% gain might suggest.
 
As I say, I related to this because when I set out at CEO of Kavango, my plan was similar.
 
I wanted—still want— for Kavango to become a world-class minerals exploration explorer in Botswana...
 
I knew we wouldn’t be able to achieve it overnight. I knew that to achieve such a goal, we’d have to slowly build over time, improving, if you like, by 1% each day.
 
I feel like we’ve been doing that.
 
And right now, with all the momentum we’ve got behind us, I feel like that calm and considered approach is starting to pay off.

Applying the 1% rule to the bigger picture

I had this idea in my head for the rest of the day, and it got me thinking...
 
Sure, the idea struck me because it reminded me of the approach that we’ve been taking with Kavango…
 
Striving to make small, incremental improvements to our operation over time that could potentially accumulate into something much greater…
 
Whether it’s bringing in new team members...
 
Implementing a new training programme...
 
Or fine-tuning our exploration techniques to make sure we’re focusing our efforts in the most effective way we can...
 
They all represent incremental improvements that add up in the long run.
 
But then I started to wonder what would happen if you applied this idea to investment more generally.
 
In the exploration space, and particularly where small cap companies are concerned, let’s face it...
 
We’re looking for moon shots here.
 
We’re looking for opportunities that could potentially deliver us outsized returns.
 
That’s the aim. It would be silly to deny it.
 
But I think sometimes, in seeking those outsized gains (that are often realised in a short, sharp boom on discovery, or extremely positive news), we forget that it’s only with consistent and incremental progress that a company like Kavango can even hope to position itself to potentially deliver those much bigger returns.
 
Yes, it’s good to have grand ambitions...
 
But to achieve them, it’s worth remembering that you often have to take gradual steps.
 
I think it’s an interesting thought, and I hope you don’t mind me sharing it with you.
 
As I say, I’m feeling very positive about where we’re at with Kavango right now and with the momentum we have building, I’m excited about what the future has in store.
 
There’s lots of news to come and I’ll be sure to keep you up to date as ever, but in the meantime, as I say, if you’ve not checked out Atomic Habits, it’s well worth a read.

Over the last year we’ve quietly gone about our business in the Kalahari Copper Belt (“KCB”). But make no mistake, this is where we have focussed most of our operational energy.
 
We believe this is where we have our highest chances of success, and we are now nearing the point where we feel ready to drill.
 
Progress might have taken longer than we would have liked, but what matters now is where we are today and how we got here.
 
Since we first identified large potential target areas in our prospecting licence PL036, just over twelve months ago, the scale of our KCB opportunity has become clear.
 
Kavango has five exploration teams in the field. Since July 2021, four of these have been permanently hard at work in the KCB, surveying and sampling our ground in this exciting copper province.
 
It’s demanding, time-consuming work, but it’s vital if we are to maximise our chances of drilling success.
 
What’s important to remember is how much ground we have–5,348km². That’s equivalent to the size of Norfolk.
 
As I explain below, the geological setting of our land package is highly prospective for copper/silver deposits, with three projects that are particularly encouraging – PL36 (which is just south of the town of Ghanzi), the smaller PL082 (which is right in the heart of the Belt) and the Mamuno licences (set right against the Namibian border, with exploration ground held by Sandfire Resources immediately to the north and Rio Tinto to the west).
 
In other words, we have a huge amount to go for and we are using our resources carefully.
 
The key to this, really, is to ensure we have as deep an understanding as possible of our priority exploration areas, and that we define our drill targets as tightly as we can. We’re shooting for the bullseye and have confidence our meticulous approach will pay off.

Position of Kavango’s prospecting licences in the Kalahari Copper Belt

Pushing forward  

It all means acquiring the high resolution we desire of our target areas in the KCB takes time and focussed effort.
 
Take the geological mapping programme we recently completed, for example.
 
First, this involved compiling all available historical maps and information about the licences and even relogging local water boreholes. Then, our teams physically walked the ground, searching for features such as outcrop and other geological indicators. Once mapped, these were then used as vectors for further exploration.
 
It was certainly no overnight task, but it has already proven itself invaluable.
 
The work mapped multiple instances of the key “Ngwako Pan-D’kar formational contact” across our licences for the first time. These are areas where the two rock formations meet, and they are closely associated with the copper-silver deposits and discoveries elsewhere in the KCB.
 
The contacts go a considerable way towards validating our belief that the western half of the KCB is prospective for copper but has been overlooked because of sand cover.
 
But the work needed to ensure our drilling is as well-informed as possible by no means stopped there.
 
No, to heighten our target resolution, our next step has been to launch a high-resolution soil sampling programme centred around those mapped Ngwako Pan-D’kar formational contacts.
 
Without getting into too much detail, each sample–of which we are taking roughly 8,000–much be collected from a small, excavated hole, sieved, and inspected by our XRF Analyser. Batches are then periodically taken for interpretation before selected samples are sent to an independent lab in South Africa for multi-element analysis.
 
Again, this work is helping us to sharpen our targets.
 
As announced this week, a closely-spaced 5,145 soil sample programme on licence PL036 has confirmed four copper targets that fit our mapped Ngwako Pan-D’kar formational contacts. Critically, three of these conform to the previously identified Acacia, Morula, and Happy target areas while the fourth sits in an entirely new target area we’ve named Kudu.

pXRF Copper readings (+15ppm) and Zinc readings (+20ppm) displayed over the geological map (left) and Google Earth (right) at PL082

From here, work remains ahead of drilling.
 
At PL036, we will use our latest results to reinterpret geophysical data we acquired in 2021 and complete infill soil sampling where needed to help us rank our targets. We also plan to carry out a Controlled Source Audio Magnetotelluric (“CSAMT”) survey over the target areas aimed at learning more their subsurface structures.
 
Meanwhile, we expect to complete ongoing soil sampling and target delineation at our other two KCB project areas by the end of August. We are particularly excited about these, given PL082 is a possible analogue for Khoemacau’s 'Banana Zone' deposit, which sits to the immediate south of Ghanzi Ridge, and the Mamuno licences lie close to the central axis of the KCB adjacent to the Namibian border.
 
But the bottom line is we are moving ever closer to drilling at the KCB. In fact, preliminary discussions with contractors are already underway for a planned programme later this year.
 
And while their arrival might be taking a longer amount of time than some had assumed, if these holes are ultimately able to lead us to one or more areas of economic copper mineralisation, then it will have been more than worth the wait.

As readers will likely be aware, we recently released the results of a conceptual economic viability report for the iron oxide-copper-gold (“IOCG”) target we have at our Kalahari Suture Zone (“KSZ”) project.

We put a lot of thought into what this work could tell us before commissioning it. After all, most projects are drilled first and then get an economic study wrapped around them afterwards, assuming that attractive enough mineralisation is encountered.

But in the end, we came to the conclusion that the IOCG target at the KSZ merits a different, and perhaps more unconventional, approach.

The results of the study go a long way towards explaining why.

First off, the IOCG target at the KSZ is deep.

It’s true that the data sets exhibit striking similarities to the ones that were used in taking the original decision to drill the mother of all IOCGs, Olympic Dam, back in the 1970s.

But there’s also a crucial difference: the coincidence of the geophysical and the magnetic anomalies in the Great Red Spot portion of the KSZ lead us to suspect the presence of an IOCG deposit is a great deal deeper than the corresponding anomalies were at Olympic Dam.

IOCG mineralisation at Olympic Dam starts at depths of around 300 metres, whereas in our model of the KSZ, IOCG mineralisation would likely start at around 900 metres.

That’s a big difference for a small company like Kavango, especially when we’ve already got prospective nickel targets to focus on at comparatively shallower depths.

Our hope is that when we come to set our drill rigs turning once more, we can target both potential orebodies with the same set of holes.

But before we do that, we have to have a very clear idea that it really would be worth going down those extra three or four hundred metres.

Hence, we commissioned the study to examine the potential viability of an IOCG orebody at that location in Botswana, and at that depth.

Weighing up the risks and potential rewards

In creating the report, we selected various standard pricing assumptions such as US$1,600/oz gold, US$18/oz silver, US$3.50 copper/lb and US$28/lb uranium, and began to crunch the numbers from there. In choosing these prices we aimed for what we consider to be a conservative approach.

Three different scenarios that used various grades and assumed a 30-year life based on the discovery of 300mln tonnes of mineable ore delivered net present values (using a discount rate of 10%) of US$3bn, US$4.13bn and US$8.05bn for the project respectively. The lower number assumed a higher capex, and accordingly also delivered a lower internal rate of return, at 17%.

But the IRR for the project when modelled as an Olympic Dam lookalike ran up as high as 31% on that US$8.05bn NPV number.

And that is a big deal for a company the size of Kavango.

At this stage all these figures are conceptual only; there is no guarantee yet, for example, of what grade, if any, we might hit. However, the answer to the question as to whether the IOCG target is worth drilling looks like an emphatic yes for the time being.

But before we can say that with certainty, there is more work to be done.

We need to see if we can indeed drill both the nickel target and the IOCG as part of the same programme, we need to work out exactly how big we’d want the programme to be, and we need to work out how much it would cost.

Given the potential rewards on offer, the temptation might be to get back down there on the ground with the drills and get going as fast as possible. But geophysics-led exploration is a pain-staking business. We’d rather take our time and get it right.

For now, we know that the conceptual target is well worth it, and we are moving forward with renewed confidence.

Things are shaping up well at our Kalahari Copper Belt, or “KCB”, project in Botswana as the results of an extensive soil sampling and mapping campaign begin to come in.

And now that we have agreed to increase Kavango’s stake in the asset to 100%, we’re excited to continue pushing forward with exposure to as much of the potential upside on offer as possible.

The purpose of our ongoing work at the KCB is to identify drill targets for us to get to work on across our 287,100-hectare land package later in the year.

But in the meantime, the geology of our licence area is also beginning to make itself known to us and provide real grounds for encouragement.

As of 14 June, 3,478 of 8,000 planned soil samples had been collected. And these have already played a key role in establishing the location of several contacts between the well-known Ngwako Pan and D’Kar geological formations on our staked land. We’ve obviously made a lot more progress since.

The contact areas between the shallower D’Kar lithologies and the deeper Ngwako Pan sediments are closely associated with several copper-silver deposits and discoveries located in the wider Kalahari Copper Belt.

Importantly, these structures are known to stretch for thousands of kilometres across northern Botswana and into Namibia.

This is part of the reason why we have such a huge KCB landholding. After all, companies like Khoemacau Copper Mining (which has made much of the running in the Botswana copper scene over the past couple of years) are already breaking significant ground by taking a similar approach in the region.

Map showing KCB extension from Botswana to Namibia with Kavango/Kanye licences highlighted

Companies in the region have been able to identify economic grades of mineralisation close to zones where shearing, folding, and tensional failure has taken place between rock layers. In particular, Khoemacau has identified significant copper and silver deposits at the contact of Ngwako Pan and D’Kar, but primarily on the D’Kar side. So, the confirmation of the presence of Ngwako-Pan-D’Kar formational contacts on our ground is an important step towards validating our hypothesis as to the prospectivity of the western half of the KCB.

Major project upside

Establishing the KCB’s prospectivity had previously been difficult to confirm, due to the extensive sand cover that characterises the region. But we’ve taken a step forward in this regard with the deployment of the Tromino seismic technology, which we are using to map overburden and subsoil layers.

The Tromino has helped in designing appropriate soil geochemistry sampling techniques across various areas with different overburden thicknesses, and helps with subsurface mapping.  That information can now be combined with electromagnetic data gathered from airborne surveys that we’ve previously undertaken.

Tromino Orientation Survey Line 1, showing interpreted near-surface sediments 

 A Tromino surveying unit

It all means we can go into our preliminary discussions with drilling contractors with a fair degree of confidence.

The idea is to send the drill bit down to investigate in detail structural features in the vicinity of and above Ngwako Pan-D'kar formation contacts, and to see what comes back. And following our recent deal with Power Metal Resources to consolidate ownership of the KCB into a simpler structure, 100% of the upside now lies with Kavango shareholders. What’s more, with an independent report recently valuing our KCB land package at $6.02 million, the value of this upside could be highly significant. Especially when compared to our current market capitalisation.

All-in-all, the drill campaign at the KCB looks set to be an exciting one to watch, and we look forward to updating you all as to progress later in the year. If we can build on the momentum we have already established at the project, then our 100% ownership could prove to be a game-changer.

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.

The ironic thing about rare earths is they’re not actually that rare.

Not, at least, in terms of their abundance in the earth’s crust in general.

However, the key dynamic in the rare earths market right now isn’t how much there is overall, but instead where these 15 elements are based.

And the salient fact is, China currently dominates the rare earths market in a way that’s virtually unique.

Rough estimates suggest that the nation controls between 55% and 70% of the world’s rare earth supply in terms of production, and that it has an even tighter grip on processing capability.

So, if you’re in the market for rare earths right now, then China has got to be a huge factor.

However, this of course presents a significant problem to Western governments, many of whom are now establishing and/or solidifying domestic commodity supply chains as a major priority.

Indeed, China-Western relations have undeniably been turbulent in recent years, and in the wars of words and tariffs that have flown between various trading blocs, rare earths often get a mention.

The obvious question, then, is whether China would ever restrict the supply of rare earths into the West?

It hasn’t done so yet.

But it certainly has threatened to do so. And that’s been enough not only to give prices a significant floor, but also to sound alarm bells in the various European and American government departments tasked with keeping the international economy going.

Why?

Because rare earths are absolutely crucial in high tech manufacturing.

Neodymium is used in the magnets that are found in loudspeakers, and in computer hard drives; praseodymium is used in aircraft engines and in the manufacture of specialised glass; yttrium, terbium and Europium are used in the manufacture of electronic screens, and Europium is also used in the nuclear industry; lanthanum and cerium are used in the refining of crude oil; and neodymium, dysprosium, and occasionally terbium are used in the magnets that go into electric vehicle batteries and wind turbines.

Making progress at Ditau

Rare earths, in short, form a commodity group that is essential to any forward-looking modern economy.

And to many policy-makers, diversifying the source of these metals beyond China is becoming essential to mitigating supply chain risk.

That’s why rare earth projects around the world are increasingly gaining the interest and support of local governments.

Security of supply has re-emerged as a major factor in strategic economic analysis for the first time in several decades, and companies that hold rare earths projects are increasingly likely to find favour with regulators and governments alike.

What’s more, investors are waking up to their potential too.

Still, rare earths remain difficult commodities to focus on, precisely because China’s control over the price remains so strong.

And that’s why companies like us at Kavango hold rare earth projects in conjunction with other major assets.

Indeed, when pricing is weak, rare earths projects can take a back seat. But when, as is increasingly likely, supply gets constrained, companies with projects already on the go can accelerate them for rapid development.

In this regard, the Ditau project we operate and own along Power Metal Resources in Botswana is a perfect example.

Ditau was first identified as prospective in the 1970s, and is now the subject of renewed attention under our joint venture.

Our previous exploration identified 12 geophysical structures at Ditau, of which nine have clear indications of being “ring structures” with the potential to host carbonatite and other intrusive rocks.

Carbonatites, in turn, are the principal source of rare earth elements globally.

We are right now completing a drill programme over three of the most exciting of these targets:

• “i10”, a discrete circular anomaly of 2.2km diameter
• “i8”, a slightly larger ring like target of about 4km diameter
• “i1”, which may represent a possible large 7km x 18.5km magmatic intrusive complex, within which are circular structures indicative of potential carbonatite intrusive

We will continue to release results as we get them But the bottom line is, there’s a lot to play for here in Ditau.

It’s been a busy start to 2022 for Kavango, and we don’t plan on letting up the pace of activity at all as we move into the second half of the year.

In fact, we are carrying out work across several fronts in Botswana right now–including programmes at our Kalahari Suture Zone (“KSZ”), Kalahari Copper Belt (“KCB”), and Ditau projects.

So, with this in mind, let’s take a look at some of the highlights of the last six months and examine what is likely to be on the horizon between now and Christmas.

Our first major development this year came in February, when we delivered drilling results from the KSZ.

This work, which began at the tail end of 2021, was designed to hone in on Norilsk-like massive sulphide targets at depths of around 500m–an ambitious undertaking for a company of our size.

The data we retrieved was able to take our understanding of the KSZ to an unprecedented level. So, to reflect this, we are right now working on a Version 2.0 of our underground model for the project, including our latest insights into how we now think the geology works there.

Moreover, this round of drilling at the KSZ was also responsible for another exciting development.

Indeed, the lessons we learned from the data we retrieved re-opened a historically-raised theory that the KSZ might also host large-scale iron-oxide-copper-gold mineralisation similar to that at the world-renowned Olympic Dam project in Australia.

With our model suggesting that this mineralisation could lie underneath our primary zone of interest at around 1,000m, it’s another ambitious target for a junior explorer like ourselves. However, we are confident that we have the equipment and expert team necessary to push forward and investigate further.

On this note, one advantage across our entire portfolio that has become particularly evident this year is our access to state-of-the-art technology known as audio-magnetotelluric (“AMT”) surveying. For better or worse, the mining companies that preceded us two or three decades ago never had this their disposal.

So, why is it so useful?

Well, since first being pioneered in the field by nickel giant INCO back in 1991, AMT has emerged as an electromagnetic surveying technique that is invaluable when defining drill targets. And as such, we expect to continue using the technology to define areas of interest both at the KSZ and also across other areas of our portfolio.

What should you be looking out for?

This brings us neatly to Kavango’s second major undertaking so far this year: drilling at Ditau.

At the time of writing, much of the core we have drilled is still awaiting assay results. However, the early signs are already promising.

The ideal result would be rare-earth enriched core that could be used to open up a wider area of mineralisation, but we will have to see whether that plays out or not.

So, as the rest of 2022 rolls on, Ditau drill core is one thing to look out for.

But what else is on the cards?

At the KSZ, the plan is to go into our “target acquisition phase.”  This will involve combining data acquired from several different sources, including the upcoming results from a TDEM survey on an area of the KSZ known as the B1 Conductor.

The results of the ongoing AMT work will also be factored in, and once new targets have been decided upon, a full operational field plan will be put into place.

Separately, we are also looking to focus more than it has done hitherto on the southern portion of the KSZ to see if we can open up additional upside.

Meanwhile, over at the Kalahari Copper Belt project, a reverse circulation drill programme is set to get underway following a significant soil sampling effort.

Finally, while all that’s going on, an ongoing assessment of the recent drilling at Ditau will be taking place, and the likelihood is that the immediate follow-up will involve AMT, gravity surveys, and possibly some TDEM work too.

All-in-all, after an exciting start the year, the next six months stand to be very important for Kavango. As we continue to push forward, we look forward greatly to keeping our investors as updated as we can.

As Kavango’s work on the ground in Botswana continues to gather pace, we caught up with our chief operating officer, Brett Grist, to learn more about the experiences that shaped his career and led him to the position he fills today….

“I got into geology and mining from growing up in south-west England,” says Brett, a geologist with an impressive track record of working for exploration companies in Africa, the Middle East, Australia and the UK prior to joining us at Kavango.

For Brett, it all began back in one of England’s most prolific mining areas when he was a child.

“In north Dartmoor, there are a number of old workings around,” he says. “I used to spend my weekends running around those old mines.”

The interest became serious enough to take him to the Royal School of Mines in London, where he began to get an appreciation, he says, of what really makes a mining project work.

After university his next step was to go to Australia, where he worked on gold projects in some of the most famous districts based in the west of the country.

“My first job as a fresh-faced Pom in Australia was working on a rig in Coolgardie,” he says.

It was an old project, which allowed him to take what he calls “an archaeological interest” in the various stages that mines go through. What’s more, the company he worked for also had two operating mines, which allowed him to learn his way around a producing operation.

Once his Australian visa ran out, Brett returned to Europe, joined the well-known mining consultancy ACA Howe, and spent some time working on gold projects in Portugal.

But Africa was beckoning.

A passion for exploration in Africa

“I’d always wanted to go to Africa,” says Brett, and his chance finally came when an opportunity arose at Reunion Mining, a company that was eventually swallowed up by Anglo American.

First off, he worked for Reunion on gold exploration in Mali. Then, he jumped over to Ghana, to work up the Chirano project.

“Chirano was still in its early stages back then,” he reminisces, pointing to the fact that it subsequently got sold to Redback of Australia, and then on again to Kinross, where it was something of a centerpiece.

But as Chirano was changing hands, Brett decided to rejoin some of his peers from Reunion, who went on to form ZincOx.

ZincOx was a prominent constituent of London’s Alternative Investment Market for many years, most of which Brett spent working on its assets in Yemen. It was on the ground in Yemen that he really picked up the feel for community relations that he’s now beginning to bring to bear on behalf of us at Kavango in Botswana.

For as long as Yemen was stable it worked well for ZincOx. Brett was able to guide the project there through to the feasibility stage, negotiating with the government along the way, and engaging with ambassadors and the International Finance Corporation. And all the while he kept the community on side too, through open dialogue and measures such as ensuring effective training and employment were provided.

Eventually though, following the Arab Spring, the security situation became unstable, and it was time to leave.

Brett went back to Africa, where as CEO he got to lead work on Casa Mining’s Misisi gold project in the Democratic Republic of Congo.

“I joined that project at early-stage exploration and grew it into a 1.2-million-ounce resource,” he says. “Again, it was a very challenging environment. But the key to working successfully in situations like that is: don’t promise what you can’t deliver.”

After four years of working in the DRC, it was time to spend a bit of time at home, so Brett joined the Strategic Minerals subsidiary Cornwall Resources in its quest for tin, tungsten and copper in the south-west of England.

“We showed people you can advance an exploration discovery in the modern day in England,” he says. That’s a fine achievement in itself, and although it seems clear now, it wasn’t at all obvious just a few short years ago.

“Deep down, though,” continues Brett, “I wanted to go back to Africa.”

Brett was already acquainted with Kavango through connections related to Reunion and ZincOx. So, when the opportunity arose to join the company, he jumped at the chance.

Several things mitigated in our favour, he says.

First, Botswana is about as good a mining destination in Africa as it’s possible to get.

Second, the exploration opportunities on offer are highly prospective.

Third, the Kavango team combined youth and experience, energy and wisdom. The team on the ground, he says, is particularly strong.

He joined in February 2022, and we’re happy to say that it’s been all go ever since.

Botswana is well known for its wildlife, with lions, leopards, elephants, and all manner of other beautiful animals calling its sprawling savannahs home.

The big game we’re interested in at our Ditau project, however, lies under the earth rather than on top of it.

Indeed, because of the extensive Kalahari sands covering the area of Botswana in which the project is based, very little is known about what lies beneath the surface.

So, after gathering encouraging results from our initial surveying and mapping last year, we decided that we needed to drill to learn more.

Accordingly, in conjunction with our joint venture partner Power Metal Resources, we signed off on the targets we planned to drill at Ditau in March of this year. By the following month, we had already set the rigs turning, and the work continues to this day.

Our ultimate plan is to drill a total of six holes across three targets. The latest hole–into what we’ve dubbed the i10 target–has now completed.

At this stage, we’re still awaiting assays. However, as announced, it does initially appear that our drilling intercepted our targeted magnetic anomaly at the expected depth. In other words–so far so good.

This anomaly has a diameter of 2.2 kilometres, and we think there’s a possibility that it could be a carbonatite, in the fashion of other bodies discovered in the area in the seventies by Falconbridge.

However, the cores we extracted from the second hole have also given us an intriguing precious metals lead. The 29m “Zone of Interest” is like nothing any member of our team has seen before.

Whatever the assays return, there appears to be a lot going on in these rocks.

How did we get here?

What led us into this exploration campaign was the identification on our ground of several ‘ring structures’ of the kind we’ve just drilled at i10.

These in turn lie on a known trend of kimberlites and carbonatites that run across the northwest of Botswana and down into Namibia.

The ‘ring structures’ themselves were identified using geophysics, and often appear to be quite crater-like. Their size varies–they can be anything from a hundred metres to a couple of kilometres across–and handily, they are not usually that deep.

Of course, depth is a relative term when it comes to a junior mining company. But when set against some of our other operations, particularly the KSZ, drilling to 389 meters at the i10 target doesn’t seem overly ambitious.

Each of the three targets we’re drilling at Ditau has a different geophysical signature, and so it’ll be quite a steep learning curve when the assay results come back.

Already, though, there are some big positives.

Preliminary magnetic susceptibility readings taken on the core from the recently completed hole at i10 were highly elevated on material drawn from a depth between 293 and 321 metres. These readings coincide with a visibly altered section of the rock, so we are awaiting the assay lab results with considerable interest.

What’s more, sections of the core also contain siliceous and haematitic zones, which may be conducive to mineralization.

Ultimately, of course, what we’re looking for is elevated levels of any minerals, whether rare earths or precious metals, above what are known as ‘crustal norms’. If we get it, we’ll then be able to zone in on the richest areas.

The assay labs are busy at the moment, so it’s not clear how long we’ll have to wait before we know one way or the other for the holes we’ve already drilled.

In the meantime, our drilling continues.

Looking forward, a key operational milestone for Kavango will be a drilling programme on its licences in the Kalahari Copper Belt, which sits in the north of Botswana.
 
The targets on offer could potentially be very rich, as companies operating on nearby tenements have already demonstrated.
 
Indeed, the exploration efforts that led to the discovery of the T3 project, now owned by Sandfire, and the Khoemacau project, which was recently brought into operation by Cupric Canyon, have really put Botswana on the map for copper.
 
Prior to these exploration and development successes, investors tended to look north in Africa for major copper exploration and discovery opportunities – specifically to the more famous Copper Belt straddling the borders of Zambia and Democratic Republic of Congo.
 
But it takes a special sort of expertise and a lot of financial muscle to operate successfully in the DRC, and Zambia as a jurisdiction also has its challenges.
 
So, the emergence of Botswana as a serious copper destination has been welcomed in mining circles, and not least by us as a Botswana specialist.
 
At Kavango, we’ve long touted the attractions of operating in Botswana. But historically, the country has been more well known for its diamond prospectivity and its partnership with DeBeers.
 
Kavango doesn’t have any direct exposure to diamonds, but it does have the diamond industry to thank for helping Botswana familiarise itself with the ways and requirements of the mining sector. Investors will know that this is a two-way street. Botswana is no pushover, and has an extremely robust deal with De Beers.
 
On the other hand, the country is very keen to promote projects in other commodities to provide economic strength in depth, both in terms of exports and local employment.
 
So, it wasn’t just the mining industry that hailed the opening up of a new copper district in Botswana – the government did too.

Breaking new ground

The Kalahari Copper Belt runs broadly in a north-west to south-east direction, and trends across central northern Botswana and into Namibia.
 
Following the successful work on T3 and Khoemacau, many small mining companies have moved into the area. But Kavango has one of the largest landholdings, comprising 12 licenses and amounting to around 5,000 square kilometres of ground.
 
All but two of the licences inside this holding are held within at 50:50 joint venture with Power Metal Resources, and are likely to be the subject of drilling this year.
 
As it stands, we don’t know what the drilling will uncover.
 
But the precedents locally are very encouraging.
 
Kalahari Copper Belt discoveries have tended to be of a higher grade than the global average, and in this era of high energy prices that’s likely to be significant. 
 
Most of the mineralised zones discovered to date have occurred within 200 metres of surface, which again bodes well for the economics of mining.
 
True, exploration has thus far concentrated on where the sand cover is thinnest, and it may be that there are also opportunities deeper down.
 
But Kavango holds licenses over ground where the cover is thin, including licence PL082/2018, which lies just 35 kilometres north of T3.
 
We also hold ground close to the Namibian border, where early-stage work has just got underway. Not much exploration of significance has ever been done in this area, so it will be interesting to see what results that work, which includes mapping and the collection of up to 8,800 soil samples.
 
Sampling like this, in conjunction with geophysical data, will help us define drilling targets for later in the year.
 
Will we make a high-grade discovery on the KCB?
 
Certainly, the potential for an early discovery here is as good as it is anywhere across our portfolio. And with the copper price still holding up well, we can’t wait to get cracking.

At Kavango, we believe the scope and scale of our exploration portfolio is a testament not only to our ambition, but also to our focus.

Indeed, we have a very large position over the Kalahari Suture Zone in the southwest of Botswana, where we’re exploring for copper, nickel, and platinum group metals.

But alongside this, our exposure to the African nation also extends to the exciting Ditau Camp project, where we’re looking for rare earths and base metals, and a number of licences in the Kalahari Copper Belt, where the target is–naturally–copper.

So, what can we glean from the nature of this expansive land package?

Two things, we believe.

First, our geographical focus is clearly on Botswana.

And secondly, our focus is geared heavily towards exploration.

You see, Kavango is a company that knows how to play to its strengths, and the strengths in question here are the combined exploration expertise of our founders and the crack team of geologists we are employing to advance several of our projects simultaneously.

Since our inception, our vision has always been for discovery rather than production.

And the reasons are simple.

Exploration is in the blood of our operatives, as we’ve established. 

So, there’s that. But there’s also a far more economically-minded and pragmatic reason too.

In percentage terms, the real upside in mining lies in the discovery phase.

The famous Lassonde Curve, which models the life cycles and valuations of projects from early-stage exploration right through to production shows two big value uplifts – the first on discovery, the second at the point of production.

And ultimately, a great amount of value can be made at the first of these stages.

Of course, the discoveries have to be meaningful. But Kavango has never been about small fry.

The Lifecycle of a Mineral Discovery

Credit: Visual Capitalist

We are not a company that focuses entirely on finding a few hundred thousand ounces of gold here and there.

Not at all.

Our goal is serious and focussed exploration.

For example, if the hypotheses that underly our exploration effort at the KSZ can be proven, then Kavango may end up discovering one of the biggest nickel and/or PGM projects in decades.

Likewise, with the copper potential in the north and with the rare earths at Ditau– we are targeting big discoveries, and giving ourselves a chance to capture the value uplift on offer on that first upward stage of the Lassonde Curve.

Nothing is off the table, of course. But the idea of an exploration junior starting to focus on that second part of the Lassonde Curve by developing tier-one producing projects that stand up on the global stage is an extremely ambitious one.

At the present moment, in any case, Kavango is focussed on the more immediate term.

If we can add plenty of value at the early stage, then we can then decide whether to let bigger players shoulder the development and execution risk. And while that’s going on, we can continue to focus on the other assets in our exploration portfolio.

Will we exit our major projects completely, once a development scenario becomes realistic? That’s an open question, and one that can only be answered when the time comes.

However, there’s no doubt that when development does happen, it’s very unlikely to be Kavango that takes the lead.

Why would we? There are plenty of other companies that excel at that sort of work.

But in our case, all the experience we have built up identifying and investigating targets in Botswana make us one of the best-placed exploration companies in the country to make further discoveries.

It’s a no brainer to keep going with the exploration.

And in this context, our ongoing activities assume something of the aspect of a virtuous circle, as more and more knowledge is accumulated inside the company, and increasing amounts of data are generated.

Exploration isn’t easy, of course, and not every hole will be a winner.

But you only have to look at the companies that have dreamed big and then subsequently delivered to understand how much of a value uplift is on the table.

Two companies that have succeeded in this in recent years are Greatland Gold and SolGold. Although both still have exposure to the flagship assets that they discovered, they are no longer the operator or even the major shareholder.

Rather, they are letting other companies do the heavy lifting for them and this allows them plenty of room for manoeuvre to continue with exploration on other projects.

Another example from earlier times is Kiwara, a pure-play copper explorer in Zambia which hit a couple of very good intercepts and was then bought outright by First Quantum in a deal which delivered shareholders millions of dollars and a spectacular percentage return.

Which way will Kavango go?

Well, one thing at a time. First things first, the big drill hits are required.

But if they come in, then our options really start to open up, and our exploration portfolio will really start to hum.  

The ironic thing about rare earths is they’re not actually that rare.

Not, at least, in terms of their abundance in the earth’s crust in general.

However, the key dynamic in the rare earths market right now isn’t how much there is overall, but instead where these 15 elements are based.

And the salient fact is, China currently dominate the rare earths market in a way that’s virtually unique.

Rough estimates suggest that the nation controls between 55% and 70% of the world’s rare earth supply in terms of production, and that is has an even tighter grip on processing capability.

So, if you’re in the market for rare earths right now, then China has got to be a huge factor.

However, this of course presents a significant problem to Western governments, for many of whom establishing and/or solidifying domestic commodity supply chains is currently a major priority.

Indeed, China-Western relations have undeniably been turbulent in recent years, and in the wars of words and tariffs that have flown between various trading blocs, rare earths often get a mention.

The obvious question, then, is whether China would ever restrict the supply of rare earths into the West?

It hasn’t done so yet.

But it certainly has threatened to do so. And that’s been enough not only to give prices a significant floor, but also to sound alarm bells in the various European and American government departments tasked with keeping the international economy going.

Why?

Because rare earths are absolutely crucial in high tech manufacturing.

Neodymium is used in the magnets that are found in loudspeakers, and in computer hard drives; praseodymium is used in aircraft engines and in the manufacture of specialised glass; yttrium, terbium and Europium are used in the manufacture of electronic screens, and Europium is also used in the nuclear industry; lanthanum and cerium are used in the refining of crude oil; and neodymium, dysprosium, and occasionally terbium are used in the magnets that go into electric vehicle batteries and wind turbines.

Rare earths, in short, form a commodity group that is essential to any forward-looking modern economy.

And to many policy-makers, diversifying the source of these metals beyond China is becoming essential to mitigating supply chain risk.

That’s why rare earth projects around the world are increasingly gaining the interest and support of local governments.

Security of supply has re-emerged as a major factor in strategic economic analysis for the first time in several decades, and companies that hold rare earths projects are increasingly likely to find favour with regulators and governments alike.

What’s more, investors are waking up to their potential too.

Still, rare earths remain difficult commodities to focus on, precisely because China’s control over the price remains so strong.

And that’s why companies like Kavango hold rare earth projects in conjunction with other major assets.

Indeed, when pricing is weak, rare earths projects can take a back seat. But when, as is increasingly likely, supply gets constrained, companies with projects already on the go can accelerate them for rapid development.

In this regard, the Ditau project we operate and own along Power Metal Resources in Botswana is a perfect example.

Ditau was first identified as prospective in the 1970s, and is now the subject of renewed attention under our joint venture.

Our previous exploration has identified seven drill targets, each of which includes a possible carbonatite intrusive body lying within range of reverse circulation drilling.

All the targets are at a depth of 300 metres or less, and one, ‘Target I1’ is a large, intense magnetic dipole which spans 17 kilometres by eight kilometres and lies at a shallow depth just under the Kalahari sands.

As we’ve highlighted in recent announcements, there’s also the potential that Ditau is prospective for other base metals too–not to mention the fact that it’s long been known that niobium occurs on the ground.

So, there’s a lot to play for here, and in Botswana, a country well-known as a safe mining jurisdiction, Ditau is very much a key part of our portfolio as we gear up for drilling.

Botswana consistently hits the number one spot for Africa when the Fraser Institute does its annual ranking of the best places to go mining.

Typically, the top spots go to jurisdictions like Nevada, Saskatchewan and Western Australia.

But even in global terms, Botswana is no laggard.

In the most recent Fraser Investment Attractiveness Index, it placed 11^th, ahead of the Republic of Ireland, Queensland, British Columbia, and even the mighty mining province of Ontario.

So, to say that Botswana ranks highly as a mining investment destination is by no means a stretch. It’s Africa’s best mining destination bar none, and comfortably and consistently ranks within the top twenty in the world.

Why is this?

Put simply: politics and geology.

Botswana is famous in the mining industry for its lack of corruption, and perhaps more broadly as an island of relative stability in a continent that can at times be turbulent.

Going down Fraser’s Investment Attractiveness Index, Mali is the next African country that you come to, and Mali presents significantly elevated levels of geopolitical tension.

In old money, you might have expected South Africa to score highly, but in this day and age it’s actually in the 20 least attractive places to go mining, according to the Fraser survey.

But it’s not just a matter of politics, of course.

There’s also the question of the geological endowment.

Here Botswana is blessed in two ways. One, it’s already well-established as the leading African diamond producing country, and–after some manoeuvring over the past couple of decades–has come to an equable understanding with the world’s major diamond miner DeBeers.

DeBeers and the government of Botswana now operate a well-oiled joint venture operation known as Debswana, and this continues to be one of the biggest diamond mining forces in the world.

The history of diamond mining in Botswana goes back some decades, and the country has grown used to playing host to some of the world’s largest mines in this space.

This, in turn, has meant that as the country has opened up to exploration for other commodities, there was already a considerable body of in-country experience both technically and bureaucratically to draw upon.

Botswana is quite happy to diversify into commodities other than diamonds if the mineral endowment is there, and it has the technical and bureaucratic infrastructure already in place to allow that diversification to take place.

In fact, it’s well underway.

Kavango’s project areas in Botswana

A major investment by privately-held Khoemacau Copper Mining has just led to the opening of a new world-class copper mine that looks set to produce 60,000 tonnes of copper and around two million ounces of silver per year.

This is big time, but may only be the first of many such projects to come.

The T3 copper project, which is now in the hands of Sandfire, looks set to come on stream too.

And there are others coming along down the line as the pace of work on what’s known as the Kalahari Copper Belt accelerates.

The Kalahari Copper Belt runs roughly 1,000 kilometres from northern Botswana into Namibia, and has been the scene of intense exploration activity in recent years.

The geology is in many ways similar to the more famous Copper Belt that lies to its north, the one that straddles the Zambia-DRC border.

But in the case of the Kalahari Copper Belt, significant levels of cover have historically impeded exploration, and it’s only been in recent years with the advent of more advanced underground surveying techniques that companies have at last been able to build the confidence to put significant amounts of money into exploring the region.

Even allowing for that new technology, though, the first port of call for exploration companies has still been where cover is at its shallowest. Kavango Resources, though, also holds ground where cover is deeper and although this might be more expensive to mine, it could also be hiding great riches.

Though the country has many positives, Botswana’s biggest challenge has thwarted many. Until now.

How come no one saw this before?

That’s the first question you’d be forgiven for asking when you initially come across the extensive work we’re doing here in Botswana.

At Kavango Resources (LON:KAV), we’re in the process of uncovering what could be massively untapped sources of base and precious metal deposits.

The investigations we’ve already completed in the country suggest there could potentially be huge finds across our different project areas.

And, with each new update coming out of those projects, it seems the scope of the opportunity is only getting bigger.

Add to that the fact that Botswana itself is ranked by the Fraser Institute as one of the most attractive regions for investment globally—especially given its well-developed infrastructure and lack of corruption—and you do wonder...

Really, how come no one saw this before?

On that note, how did we, a relatively young company, manage to beat so many others to the opportunity?

Though there are naturally several factors contributing to our success so far, perhaps one of the most fundamental is technology.

Before now, others who’ve tried to explore areas around where we’re focusing have simply not had the equipment to do so.

You see, Botswana’s biggest challenge to explorers has always been the same:

The great Kalahari Desert.

It’s why, in our opinion, figuring out a way to explore beneath the African nation’s thick sand cover has always been the key to unlocking its true wealth.

A little patience goes a long way: overcoming the challenge of the Kalahari

The huge Kalahari Desert covers nearly 70% of Botswana and, though the ground beneath may potentially be rich with base and precious metals, the sand cover imposing the area has made proving so much more difficult.

Indeed, the well-known and daunting ‘Kalahari sand cover’ has foiled many who’ve tried to explore the region in the past.

For example, back in the 1970s and 1980s, an exploration team funded by the Canadian government looked to investigate the same Kalahari Suture Zone (known as ‘the KSZ’) that we’re now exploring.

At the time, limits in technology meant that the Canadian team were soon forced to give up and move on, leaving the KSZ still largely unexplored, hidden beneath the Kalahari sand cover.

However, one of our founders Hillary Gumbo felt the area still had potential. They understood that, if they had the right technology, then proving so would be a whole lot easier.

It’s one of the reasons that, as well as aligning ourselves so closely with Botswana itself, we’re also putting technology at the heart of everything we do.

In fact, by embracing modern mining exploration technology and experimenting with the latest breakthroughs, we hope to put ourselves at the forefront of metal discoveries in the country.

Three key technologies we’ve embraced to help unlock Botswana’s hidden wealth

Speaking with our CEO Ben Turney recently, it’s clear he personally believes very strongly that our adoption of modern technology is one of the smartest edges we have over the competition.

“It’s been game-changing,” says Ben. “It’s exciting to see the new ideas our partners develop and figure out ways in which we can use their tech to evidence further the potential present in areas that might have otherwise been overlooked.”

The three specific tech breakthroughs Ben cites as being most transformative for our fortunes in the Kalahari are TDEM surveys, AMT surveys, and improvements in the modeling software we’re now able to draw on:

• TDEM stands for Time-Domain Electromagnetic. It refers to a method of identifying what’s below the surface by essentially firing an electrical current into the ground and monitoring the electrical feedback that’s generated. You can quickly build up a good picture of which metals might be present based on the feedback recorded by the receivers on the surface.

Time Domain Electromagnetic (TDEM) Surveys
The technology to find Ni/Cu Drill Targets in the KSZ

• AMT stands for Audio-Frequency Magnetotellurics. Rather than using electric currents, AMT surveys map naturally-occurring energy sources in the ground, such as magnetic fields and the earth’s own electric field. These surveys are crucial in covered regions like Botswana because of the depth the survey can reach, mapping territory as far down as 500 metres or more below the surface.

• And of course, modeling software of varying capabilities has been available for decades, but in working with our various technology partners, we’re always keen to deploy the very latest methods. One key breakthrough in recent years has been the use of what’s known as ‘inversion software’, which uses seismic readings, together with other data, to physically map out the structure of the earth below ground.

As you can imagine, by combining these different technologies, it’s much easier to build up a picture of what’s in the ground beneath the Kalahari sand cover.

Where such detail and accuracy would have been impossible in the past, today companies like ours—who embrace the tech and use it drive their ambitions—are able to gather a much clearer picture of what’s going on during exploration.

Not only does it create more transparency around what’s going on beneath the surface, but it also helps us to be more transparent with investors too, which is something we pride ourselves on.

Always on the lookout for new ways to reduce risk and increase opportunity

Of course, when it comes to exploring, a company’s success relies largely on making a discovery.

But, as we all know, exploration is necessarily a speculative venture, and not all projects can come good.

The key, then, is to minimize the risk of embarking on projects that don’t lead to discovery.

This is why it’s so fundamental to embrace modern advancements in technology such as TDEM surveys and AMT surveys alongside the various developments being made in below surface modeling.

You see, by building more accurate imaging of what’s going on in the ground before needing to incur the massive costs that come with drilling, we’re able to expand our scope, cover more projects and bring greater opportunity to potential investors.

It’s a huge positive.

And it’s why we’re excited to continue to explore the next advancements in exploration technology too.

As the industry develops, so do we, and we continue to seek out ways we can take advantage of new technologies to help us unlock even more of the potential that the great country of Botswana offers.

And we’ll be sure to keep you informed of all the latest developments.