Kavango Resources, a UK-listed mineral explorer, has made its first investment in Zimbabwe with an option to buy 45 gold claims, saying it sees opportunity in a country that has seen years of low exploration activity.
The company will pay US$4 million for a two-year exclusive binding option for the gold claims in Matabeleland.
Industry experts say low investment in mineral exploration over the years means that many potential resources have gone untapped. Kavango CEO, Ben Turney, says this presents a chance for exploration companies to strike commercial discoveries.
“Zimbabwe has a strong tradition of mining. However, exploration and investment have been severely limited over recent decades. In 1980, Zimbabwe produced more gold than Australia but the country has yet to experience the bulk-mining boom Australia did midway through that decade,” says Turney.
His company has committed to spending US$1 million on exploration at the Nara Project over the two-year option period, with a minimum exploration spend of US$500,000 in the first year. Should exploration show a gold resource above 500,000 ounces, Kavango will give the seller US$1 million worth of Kavango shares.
Kavango says it believes the Nara Project has the potential to host a bulk mineable gold deposit. Previous workings in the area have produced up to 250,000 tonnes of tailings – the waste from mining operations – which Kavango also hopes may yield some gold.
Kavango was founded by Zimbabwean geophysicist Hillary Gumbo and partner Mike Moles, and was listed on the London Stock Exchange in 2018. It currently has operations in Botswana.
Zimbabwe is thirsty for new investment in its gold industry, which is currently dominated by small scale miners. Formal miners include Caledonia Mining, which owns Blanket Mine and is developing two new recent acquisitions, as well as Kuvimba Mining House, which runs Freda Rebecca, plus Padenga’s Dallaglio and RioZim.
Caledonia’s CEO Mark Learmonth has called Zimbabwe the “last frontier” for gold investors because it has not invested enough in exploration.