Kavango Resources Plc, a London-based metals exploration company with a focus on Botswana, has agreed to pay US$4 million for two gold mining properties in Zimbabwe with the hope of earning a sizable profit.
The miner signed a two-year exclusive option to purchase the Nara project, which consists of 45 contiguous gold claims in Matabeleland and has the potential to have a sizable bulk mineable gold resource.
According to the miner, the Nara Project produced between 150,000 and 250,000 tons of tailings, which creates a different option for short-term cash creation.
This week, Kavango disclosed that it has agreed to pay the existing claims holder US$4 million in cash as well as an option fee of up to US$220,000 over the course of the two-year option term, divided into four installments of US$55 000 each due at the beginning of each half-year.
Additionally, the miner will invest US$1 million in exploration at the Nara Project over the course of two years, with a minimum of US$500 000 in the first year.
Kavango will have time throughout the exclusive option term to conduct unrestricted field due diligence, including drilling and exploration activity.
The firm has been in concurrent discussions with a single investor about a potential £6 million equity fundraising via a non-brokered direct share subscription to support the new project.
Ben Turney, chief executive officer of Kavango Resources Plc, expressed confidence in Zimbabwe’s enormous mining potential. He said, Mining has a long history in Zimbabwe. However, throughout the past few decades, exploration and investment have been severely constrained. We think this offers Kavango a big possibility and a profitable finding.
While on monday afternoon in London, the miner’s share price increased 1,6% shortly after the most recent developments were revealed.