Kavango Resources Announces New TDEM Loop – What Does This Mean?

Kavango Resources (LON: KAV) shares are pretty much unchanged after the company announced “new TDEM loop designs” in the KSZ. Of course, it would be nice to know what this means but more important to us as traders the question is will this move the Kavango share price? In this very short term, we already have our answer – the share price hasn’t moved much, a percentage point or two, on the back of the announcement.

The point though is to work through what this might mean in the medium to longer term. What is really being said here is that some interesting things have been found, it has been possible to sort through to the things which need to be investigated more thoroughly and that’s what is going to be done.

This is just how it works for junior miners like Kavango Resources. In order to build a mine and create revenue and profits it is necessary, obviously, to find a mineral deposit that is worth mining – that is defined as one that will produce a profit if you do mine it. The work of a junior mining company is that process of finding and proving a mineral deposit that is worth mining.

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Which is exactly what Kavango is attempting to do in the Kalahari Suture Zone (KSZ). The basic problem is that there’s an awful lot of geology out there. So, it’s necessary to be selective, which can be started by aerial surveys, a bit of Mark I Eyeballing and checking old artisanal workings. That gives an idea of where there might be something.

Further investigation then happens, which is what Kavango is doing right now. For example, there are a couple of areas (“conductor targets” in the jargon here) which are definitely something different. They show different magnetic and conduction properties than the surrounding areas. Those differences are also those associated with nickel and copper occurrences – both are electrical conductors of course and one is highly magnetic.

From this it has been possible to build a prospective – note the prospective there – map of the geology down there. The next stage is to test this more thoroughly. Are those measurable differences what we think they are, in detail? If so we might well have what we think we have, a large metal sulphide deposit right where we think it is.

Assuming that turns out to be true then more research – drilling, sampling – will take place and so the process continues.

This specific announcement from Kavango Resources isn’t, if we’re honest about it, much of a price mover. But the results of this next stage of work could be. For this junior mining process is the continual build up of evidence to show that there is a mineable, profitable, deposit down there. So, each new piece of evidence that adds to that probability adds to the valuation. Adding new TDEM loop designs isn’t the news – the results of having added new TDEM loop designs might well be