PRESS
RELEASE
08 March
2024
KAVANGO RESOURCES PLC
("Kavango" or "the
Company")
ZIM: First Gold Production Commences
Immediately
Kavango Resources plc (LSE:KAV), the Southern
Africa focussed metals exploration company, its pleased to announce
the Company has formed a new subsidiary in Zimbabwe; Kavango Mining
(Pvt) Limited ("Kavango Mining"). Kavango Mining will become the
Company's mining arm in Zimbabwe and will move into revenue this
month.
Further, the Company is pleased to announce it
has signed its first contract to commence immediate gold mining
operations at the Hillside Project ("Hillside") (the "Mining
Contract").
Highlights
- Kavango to take over
existing mining operations at Hillside immediately.
- Kavango to fund
capital investment and will receive 100% of revenue
generated.
- Gold production at
Hillside has been consistently profitable for three
years.
- Kavango aims to
double current production to 1 kilogram ("kg") of gold a month over
the course of 2024.
- Current revenue at
Hillside is c.US$30,000 a month, which will be reflected in
Kavango's financial reporting from 01 March 2024 (the Mining
Contract's effective date).
- Kavango to develop a
mining 'growth point' at Hillside by upgrading the project's plant
and enhancing local community-led gold extraction to increase
near-term production.
Separately, Kavango has an option to acquire
Hillside (announced
>>> 25 July 2023), which Kavango is currently
renegotiating terms on. The Mining Contract is not contingent on
exercising the Option.
Ben Turney,
Chief executive of Kavango Resources, commented:
"From this
month, Kavango moves into revenue through gold production at
Hillside. Following announcement of our maiden gold resource
estimate at Nara, this is a second major milestone for the Company
this week.
Current
revenue at Hillside amounts to around $30,000 per month and the
operation there is already profitable. Continuous production at
Zimbabwe gold projects secures the ground and forms an important
part of any long-term development plan.
Our objective
is to become a significant gold producer in this country, and this
is our first step towards achieving this goal. If all goes well,
there are other production opportunities we hope to bring to
Kavango.
Gold
production at Hillside has been consistently profitable for the
last 3 years, despite capital constraints. As with most projects in
Zimbabwe, the lack of investment capital has held back
growth.
There are
currently two stamp mills operating at Hillside. Our immediate plan
is to add a third stamp mill and to start processing feed material
from the four prospects our exploration team has identified here.
We also plan to work towards small-scall underground mining to
increase production.
We aim to
double production to 1kg of gold a month at Hillside, over the
course of 2024. Meanwhile, we will continue our wider exploration
at Hillside as we seek to discover larger-scale bulk minable gold
deposits."
Gold
Production at the Hillside Project
Gold production is currently limited to mining
oxides near to surface using small-scale mining methods. Kavango
will seek to enhance and add to this, while continuing its wider
exploration for potential larger-scale bulk mineable gold
deposits.
Current production at Hillside is reported to
run at approximately 500g of gold per month.
There are two stamp mills on site and a
processing plant with room for immediate expansion. Current
production capacity is roughly 600 tonnes a month.
Gold is sold through Fidelity Printers and
Refiners, a gold refinery company wholly owned by the Reserve
Bank of Zimbabwe.
Current gross revenue from production is
roughly US$30,000 a month, at current gold price.
Kavango plans to add a third stamp mill to
Hillside and fund further upgrades of plant and equipment. This
will include capital investment in equipment and installation of a
higher load capacity electrical transformer.
In addition to this, Kavango will complete a
review of the potential for small-scale underground mining at
Hillside. The Company will provide further updates on this in due
course.
Headline terms of the Mining
Contract:
- Kavango will bear all
costs incurred for running and developing mining operations at
Hillside.
- Kavango will also
receive all revenue generated from gold production at
Hillside.
- The Mining Contract
can be cancelled with 6 months written notice given either by
Kavango or the current Hillside owner.
- In the event of
cancellation of the Mining Contract, Kavango will retain all
capital equipment and plant it has acquired at Hillside.
Historically, mining activity across Hillside
has been restricted because of a lack of available capital. As part
of Kavango's commitment to enhancing the local community supply
chain and developing a mining 'growth point', the Company intends
to invest locally in modern mining skills development and provide
access to equipment to support greater community-led gold
extraction. This will increase overall short-term production at
Hillside and will provide the Company with further valuable
exploration data to assess different styles of gold mineralisation
and ore being extracted.
Kavango Mining will perform continuous
monitoring and evaluation of near-surface mining at Hillside and
will appoint a general manager to ensure modern health and safety
standards in mining are adopted.
The Hillside
Project
The Hillside Project is southeast of Bulawayo
in southern Zimbabwe.
Hillside comprises 44 gold claims (the Claims)
and contains five historic underground mines.
Separate to the Mining Contract, Kavango has an
option to acquire Hillside. The Company is currently renegotiating
more favourable terms on the Option, following introduction of the
Special Capital Gains Tax (announced
>>> 23 January 2024).
The Company has designated four priority
prospects at the Hillside Project with a view to discovering one or
more larger-scale gold deposits that are suitable for modern bulk
mining. Kavango has started an exploration program at these four
prospects, which includes geological mapping, geochemical surveys,
geophysical programs, and drilling to assess the geology, style and
type of mineralisation, and distribution of grade.
Further
information in respect of the Company 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
+46 7697 406 06
First Equity (Broker)
+44 207 374 2212
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'.