LONDON based Botswana focused metals exploration concern Kavango Resources Plc has agreed to pay US$4 million for two gold mining projects in Zimbabwe amid expectations for a lucrative return. The miner signed an exclusive two year option to acquire a gold exploration project in Matabeleland in the Nara project has 45 contiguous gold claims, and believes it has potential to host a bulk mineable gold deposit.
The miner said the Nara Project has generated approximately 150,000 to 250,000 tons of tailings, which presents a separate opportunity for near-term revenue generation.
Kavango this week revealed it has agreed to pay the current claims holder US$4 million cash, and have agreed to pay an option fee to them of up to US$220 000 over the two-year option period, split into four individual payments of US$55 000 each payable at the start of each half year.
The miner will also commit US$1 million in spending on exploration at the Nara Project in the two years, with a minimum exploration spend of US$500 000 in the first year. The exclusive option period is expected to give Kavango time to perform unrestricted field due diligence, including exploration and drilling work.
To support the new project the company has been in parallel talks with a single investor concerning a possible £6mln equity funding, via a non-brokered direct share subscription. Kavango Resources Plc chief executive officer, Ben Turney expressed optimism in the vast mining potential in Zimbabwe.
“Zimbabwe has a strong tradition of mining. However exploration and investment has been severely limited over recent decades. We believe this presents a significant opportunity for Kavango and a commercial discovery,” he said.
Soon after announcing the latest developments, the miner’s share price went up 1,6% in London on Monday afternoon.
Source NewZimbabwe
