UK-listed Kavango Resources says it is in the late stages of discussions over a potential two-year option to acquire a gold exploration and development project in Zimbabwe as well as separate talks for an equity investment.
The mining company said the project area in Zimbabwe covers a number of contiguous gold claims over a 3.4-kilometre strike that has supported historic high-grade underground mining and recent surface small-scale mining operations.
Provisional terms of the option would allow Kavango to perform unrestricted field due diligence – comprising exploration and drilling – ahead of deciding whether to exercise the option to acquire.
Kavango has completed extensive preliminary due diligence ahead of negotiating the deal, including two field visits to the project area.
The company is also in talks with a single investor regarding a potential conditional equity investment of US$7.5 million via a direct subscription.
The finance provides us a lot of opportunity, both across our existing portfolio & for new projects,” CEO Ben Turney says. “A hell of a lot of work has gone into what could be a game changer for Kavango.”
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.