KCB – Agreement to acquire six new PLs

Kavango Resources PLC

25 September 2023

 

25 September 2023

Kavango Resources PLC

("Kavango" or "the Company")

KCB - Agreement to acquire  six new PLs

Kavango Resources plc (LSE:KAV), the Southern Africa-focused metals exploration company, is pleased to announce that it has entered an agreement with Global Exploration Technologies (Pty) Limited ("GET"), a wholly owned subsidiary of ENRG Elements (ASX:ENRG) ("ENRG") to acquire a 90% working interest in six Prospecting Licences ("PLs") located in Botswana's Kalahari Copper Belt ("KCB") (the "Acquisition").

The PLs cover ground adjacent to Kavango's existing Karakubis Block next to the Namibian border, currently the priority focus in its KCB copper/silver exploration programme. The PLs are also adjacent to the Company's South Ghanzi block in the KCB, giving Kavango a single, contiguous project area to explore.

Kavango is particularly keen to test the combined potential of PL049/2020, PL052/2020 (in the Karakubis Block) and PL203/2016 (within the area to be acquiredand satisfaction of certain other conditions).  The Company believes these three PLs cover a single regional system that incorporates notable domal structures, which are key exploration targets in the search for large-scale copper/silver mineralisation.

Ben Turney, Chief Executive Officer of Kavango Resources, commented:

"The new licences join up our Karakubis and South Ghanzi blocks, providing us with a contiguous, highly prospective system to explore along strike from major discoveries such as Sandfire Resources' (ASX:SFR) T3 deposit and Khoemacau Copper Mining's Zone 5 deposit.

We now have uninterrupted control of the single system in this portion of the Kalahari Copper Belt (KCB). We believe today's acquisition significantly increases our chances of making a discovery here. We will  push ahead in the KCB, by reviewing exploration data for the new licence areas and the results of our recently completed IP surveys at the Karakubis project area. Our goal is to identify high-confidence drill targets to pursue in Q1 next year. 

With completion of the Purebond financing imminent, we are in an extremely strong position to execute our ambitious plans."

Figure 1: Map of Kavango's KCB landholding

Next steps in the KCB

Recent work by Kavango has included 30km of Induced Polarisation ("IP") survey lines over targeted areas within its Karakubis group of licences.

Kavango is, in conjunction with David Catterall, an expert on the KCB, completing a review of all available data for both Kavango's previous and these six new licences. Kavango has also recently appointed a new Exploration Manager for Botswana, Mr Leon de Waal, who will be leading the KCB work. Kavango's goals over the coming months are:

1.   To "level up" its exploration data coverage across its entire KCB holdings and,

2.   To identify potential sulphide bodies that will be ranked as targets for future drilling (announced >>> 25 July 2023).

The current "levelling-up" programme has been designed to field test a new geological interpretation. Kavango believes it has successfully identified the lower D'Kar/Ngwako Pan Formations, the contact of which is known to host the majority of copper-silver mineralisation elsewhere within the Kalahari Copperbelt, over PL036/2020, PL049/2020 & PL052/2020. The field mapping on PL036/2020 has effectively extended the area underlain by the lower D'Kar Formation and for which 5,054 samples have been collected.

Kavango believes the lower D'Kar Formation it has mapped across PL049/2020 & PL052/2020 (in the Karakubis Block)  extends into PL203/2016 (which Kavango has now acquired), where pathfinder minerals galena and sphalerite have been observed in historic drill chips.

Preliminary modelling of Kavango's recent IP survey data across an AEM target on PL049/2020 has already highlighted prospective domal structural trap sites (announced >>> 25 July 2023) for future drill targeting.

Acquisition terms

Kavango has agreed to acquire a 90% working interest in the six PLs by acquiring 90% of the issued shares of Icon Trading (Pty) Ltd ("Icon") and Ashmead Holdings (Pty) Ltd ("Ashmead"), two subsidiary companies of GET.

Kavango shall have exclusive right to appoint directors to the board of both Icon and Ashmead.

To complete the Acquisition, Kavango will pay GET a total of AUD$2.5 million in cash in the three following instalments:

-     AUD$1.5 million on the completion of the Acquisition

-     AUD$500,000 90 days after the completion of the Acquisition

-     AUD$500,000 180 days after the completion of the Acquisition

The names of the PLs, along with their existing owner, status, and expiry date, can be found in Figure 2 below.

PL Number	Company	Status	Expiry Date
PL127/2017	Ashmead Holdings (Pty) Ltd	2nd Renewal	30/06/2024
PL128/2017	Ashmead Holdings (Pty) Ltd	2nd Renewal	30/06/2024
PL129/2017	Ashmead Holdings (Pty) Ltd	2nd Renewal	30/06/2024
PL203/2016	Icon Trading (Pty) Ltd	3rd Renewal	30/09/2025
PL204/2016	Icon Trading (Pty) Ltd	3rd Renewal	30/09/2025
PL205/2016[1]	Icon Trading (Pty) Ltd	3rd Renewal	30/09/2025

Figure 2: Details of the GET PLs

The agreement will complete on the receipt of necessary permissions in Botswana on or after 30 OCtober 2023 and satisfaction of certain other conditions.

Under the terms of the transaction, Kavango will assume the benefit of the outstanding intercompany loans for historic exploration onto its balance sheet. Icon and Ashmead  will retain ownership of all historic exploration data gathered by them.

Financing update

Kavango continues to finalise the circular and prospectus for the forthcoming Stage 2 financing with Purebond (announced >>> 09 May 2023 for £4.6million at 1p per share). The Company expects to publish the Circular in the coming days and call the general meeting to seek approval from independent shareholders of a waiver in accordance with Rule 9 of the Takeover Code (Whitewash) in relation to this transaction.

In the event there is a delay in completing the Stage 2 financing, Purebond has indicated to Kavango's board its readiness to lend the Company sufficient funds to complete the Acquisition.

Further information in respect of Kavango and its business interests is provided on the Company's website at www.kavangoresources.com and on Twitter at #KAV.

For further information please contact:

Kavango Resources plc  

Ben Turney

[phone]

First Equity (Broker)

[phone]

Jason Robertson 

Kavango Competent Person Statement

The technical information contained in this announcement pertaining to geology and exploration have been read and approved by Brett Grist BSc(Hons) FAusIMM (CP).  Mr Grist is a Fellow of the Australasian Institute of Mining and Metallurgy with Chartered Professional status.  Mr Grist has sufficient experience that is relevant to the exploration programmes and geology of the main styles of mineralisation and deposit types under consideration to act as a Qualified Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'.

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