SMALL CAP IDEAS: Kavango raises £3.5m for exploration in Botswana

What will the junior mining exploration sector look like in the next 12 months?

One possibility is that news flow in the industry is about to dry up as markets become even more difficult and money to pay for work in the field is increasingly difficult to find.

However, if that’s true, Kavango Resources will likely be a beacon of light in an otherwise bleak sector.

Because Kavango has just raised £3.5m at a share of 1.8 a year in new money to fund his ongoing exploration activities in Botswana.

It’s a big amount in an industry where a typical fundraiser could be £1 million, and there are plenty of companies that would settle for less than that.

But Kavango doesn’t just roam around “moose pasture,” as industry jargon would have it.

Rather, it sits on what could be some of the greatest discoveries to come out of southern Africa in years.

Big potential, big raise – it’s that simple.

In other words, this is no ordinary exploration company.

Each of the goals Kavango has in its portfolio could serve as a business creator, and each of them could absorb the full energy of a comparable peer on its own.

But Kavango benefits from a handy combination: the founders are seasoned experts in their fields, long-to-the-tooth and rich in experience, and also wise enough to know that running a business full-time is a job for a younger team.

So, Ben Turney was brought in a year or two ago to bring the energy and verve needed to turn exploration dreams into mining reality.

Can he do it? He hasn’t done it yet, but at least he’s moved the story forward pretty quickly in a short space of time.

Over the past few years, the company has done significant work on its flagship Kalahari Suture Zone project, leveraging new technology to develop new geological models, none of which have yet to disprove the original claim – that the KSZ could host for a large Norilsk-style deposit.

For those unaware, Norilsk is one of the largest nickel and platinum group metal projects in the world, and while there are differences between Norilsk and KSZ, particularly in terms of depth, the geological similarities are striking.

That depth is a problem. If there is Norilsk-style mineralization, it is likely to be between about 500m and 700m below the surface, through significant cover of the Kalahari sands and further into the bedrock.

Drilling like this is not out of the question for a junior miner, but it is extraordinary.

Not many companies would dare, much less would take on the challenge of descending deeper and deeper, to about 1,000 meters, where there may still be another mineralized zone, this time containing iron, copper and gold.

That kind of can-do attitude certainly sets Kavango apart from the pack — at the KSZ, the risks are greater, but so are the rewards.

What can they be? That’s impossible to say with any accuracy at this stage, but it’s worth noting that the company built around Norilsk is one of the largest in the world, and the iron oxide-copper-gold mineralization bears some resemblance to the Olympic Dam, one of de BHP’s largest and most valuable assets.

Kavango is thus exploration in style. Not for Turney and his team to drill a few small-scale boreholes looking for a few grams of gold here or there in some surface vein.

At KSZ, it’s all or nothing, with the crucial caveat that with £3.5m in the bank, the company can really do its best.

“We’re going to go a lot of meters into the ground,” Turney says soberly. That’s all.

And there is no doubt that the drilling will continue, let alone that sentiment in the exploration sector is bad.

In fact, the drills are already running on one of the company’s other projects, the Kalahari Copper Belt, where the broad target is another discovery along the lines of the one that Metal Tiger delivered not far away at T3 and ultimately made a significant profit. has been sold.

Altogether, some 37,000 meters of drilling will go into the ground here, the results of which are likely to ease the industry’s news flow in the coming months.

Turney thinks that if discoveries are to be made, it’s more likely that one will happen at the KCB first.

That in itself would be a business maker. But a discovery at the KSZ could do even more – it could change the whole face of the mining industry in Botswana and southern Africa.