Kavango shares jump 19% after Great Red Spot update and an oversubscribed placing
Kavango Resources PLC (LSE:KAV, OTC:KVGOF) said it found a second target at its Great Red Spot (GRS) prospect in Botswana with characteristics similar to BHP Group Ltd’s huge Olympic Dam polymetallic operation in Australia.
The iron oxide copper-gold (IOCG) style model indicates a second mineralisation style possibly present within the GRS in addition to the existing potential for nickel/copper sulphide deposits, said Kavango in a statement. This is a “significant development” for the prospectivity of the GRS, it added, as IOCG deposits are an alteration “overprint” of the host geology when they form. The next steps will be further audio-Magnetotelluric (AMT surveys) over the GRS and a final report of an economic potential study.
A presentation of the GRS IOCG exploration model will be made to shareholders in the next week. Kavango also raised £750,000 over the weekend through what it said was a heavily oversubscribed placing at 3p per share, with offers for “double” the amount received.
Ben Turney, chief executive, added:
“It is important to be careful when comparing a geophysical model to an existing ore deposit. Geology is complex and no two deposits are the same.
“We first appreciated the geophysical similarities between Olympic Dam and the Great Red Spot in November last year.
“Rather than rush to publish, we’ve instead worked diligently on this new target over the last six months. We’ve been mindful that while the tectonic settings of Olympic Dam and the GRS are similar, the host geology and alteration could be very different.
“Our comparison with Olympic Dam is led by rigorous geophysical modelling. The correlation of the magnetic data with gravity data over the GRS is very similar to the nearly coincident magnetic and gravity anomalies originally identified at Olympic Dam.
“In addition, the shape and size of the modelled magnetic bodies of both Olympic Dam and the GRS almost mirror one another. The distinctive “crown shape” is particularly noticeable.
“The concentration of magnetite encountered corresponds to what could represent a larger zone of magnetite close to the centre of the GRS. If this model proves to be correct it could be a physical indicator of an IOCG system.
“What is particularly exciting about the new IOCG target in the GRS is that it is in addition to our existing nickel/copper sulphide model, stacked beneath it.”
Shares in London-listed Kavango jumped 19% to 3.45p in early trading.
