Kavango signs first Zimbabwe gold option

Kavango Resources plc has signed an exclusive two-year option to acquire a producing gold exploration project in Matabeleland, southern Zimbabwe.

MINES AND TAILINGS

The Nara project comprises 45 contiguous gold claims, each of 10 hectares, and covers four historic mines.

Total recorded historic production, between the early 1900s and early 1960s, from underground workings amount to 92,000oz gold averaging 9.76g/t.

The company said that the site, which also produced tungsten and silver credits, held “considerable prospective potential for a modern commercial gold operation”.

Operations also generated approximately 150,000 to 250,000 tonnes of tailings which present “a separate opportunity for potential near-term revenue generation”.

Kavango will conduct field due diligence including surface mapping and geochemistry, geophysics, surface drill testing, underground sampling and underground drill testing.

The company will also assess the commercial potential for processing the tailings.

Kavango has agreed to pay the current claims holder US$4million cash, and an option fee of up to $220,000 over the two-year option period split into four individual payments of US$55,000.

Kavango will commit to spend $1m on exploration at Nara over the two-year option period, with a minimum exploration spend of $500,000 in the first year.

If the company declares a code-compliant gold resource of more than 500,000 ounces of gold it will pay up to $1m in Kavango shares.

BULK DEPOSITS

Chief executive Ben Turney added that the company had conducted initial due diligence over the past 12 months including four visits to Nara.

“The greenstone belts in Zimbabwe host prospective rocks for bulk-mineable gold deposits, according to Kavango’s internal review and analysis.

“Many of these belts share notable similarities with some of Australia’s most prolific gold-producing regions.”

He added that exploration and investment in Zimbabwe had been “severely limited” over recent decades although in 1980 the country produced more gold than Australia.

“The country has yet to experience the bulk-mining boom Australia did midway through that decade.

“We believe this presents a significant opportunity for Kavango and a commercial discovery.

“With the strong financial backing of Purebond, Kavango is now positioned to pursue the potential we have identified in Matabeleland alongside our portfolio in Botswana.”