02 May 2024
Kavango Resources
("Kavango" or "the
Company")
ZIM - Hillside Option Exercise
Update
Kavango Resources plc (LSE: KAV), the Southern
Africa focussed metals exploration company (the "Company"), is
pleased to announce that it has agreed updated terms for exercise
of the Hillside Call Option with the vendors of the Hillside
Project ("Hillside") and Leopard South Project ("Leopard
South").
Summary
· The
Sellers and Kavango entered into call options in respect of the
Hillside, Leopard North and Leopard South projects in a Call Option
Agreement ("The Call Option") dated 25 July 2023, (announced
>>> 25 July 2023). The Call Option had an initial
term of six months, expiring 24 January 2024. This was
subsequently extended, pending finalisation of terms following
introduction of the Special Capital Gains Tax in
Zimbabwe.
·
Kavango served notice of exercise to the Sellers, effective
23 April 2024 (announced
>>> 23 April 2024).
· Sale
and Purchase agreements for Hillside and Leopard South were signed
by the Sellers with Kavango on 30 April, with what Kavango
considers to be improved commercial terms. The main components
comprise:
- $600,000
cash consideration to be paid to the sellers of
Hillside.
- $50,000
cash consideration to be paid to the sellers of Leopard
South.
- Option
on Leopard North extended to 30 June 2025, which Kavango may
exercise in return for payment of $100,000 and the issue of
34,125,000 shares in the Company. A further $1,000,000 of shares
are to be issued in the Company in the event that a code compliant
resource in excess of 200,000 oz gold is defined.
- Kavango
to assume responsibility for up to $350,000 of debt owed, which is
repayable at $10,000 per month.
- Kavango
has granted a royalty of 5% of gold production on the properties,
capped at a value of $1,500,000, and which Kavango may at its
option buy out within 12 months for an issue of 63,125,000 shares
in the Company.
·
Completion is subject to satisfactory transfer by the Sellers
of the mining claims into Kavango's Zimbabwe subsidiary, and on the
Company paying the Zimbabwe Special Capital Gains Tax ("SCGT") due
on the transaction.
Ben Turney,
Chief Executive of Kavango Resources, commented:
"Following successful completion of yesterday's
£3.08million financing, we've finalised terms on exercising the
Hillside project option.
In completing this transaction, Kavango becomes
the sole owner of a significant ground holding in a highly
prospective area for large-scale gold mining. Our recent drill
results from Hillside have confirmed the region's great potential.
Highlights from our first two holes included 7.2m @ 9.95g/t at
Prospect 2 and 2.53m @ 29.08g/t at Prospect 4. We plan to return
soon with the drill rig to follow up on these targets to test for
bulk-minable ore bodies.
Meanwhile, through Kavango Mining, we will
continue to increase profitable gold production at Hillside.
Encouragingly, production in April was just over 1kg, representing
a second consecutive profitable month. It is encouraging that this
business unit is performing better than expected and before we
invest in new equipment. We will shortly announce a capital
investment programme to grow production over the coming
months.
I must congratulate all our team for the
excellent work they are doing. Our exploration team is performing
extremely well and the Kavango Mining team has got off to a great
start. We are laying a strong foundation in Zimbabwe to build a
successful business together."
For further information please
contact:
Kavango
Resources plc
Ben Turney
+46 7697 406 06
First Equity (Broker)
Jason Robertson
+44 207 374 2212