Chronicle Editor
ZIMBABWE’S mining industry plays a vital role in the nation’s economic landscape, serving as a significant driver of growth and foreign investment. However, to fully realise the sector’s potential, the establishment of a robust and reliable supply chain is crucial. This supply chain would not only support exploration and mining companies operating within the country but also attract increased foreign investment.
One company taking proactive steps to address this need is Kavango Resources, a mineral exploration firm with a growing presence in Zimbabwe. Through its strategic investment in Equity Drilling, a local drilling company, Kavango is actively contributing to the development of a comprehensive supply chain for the mining industry. Equity Drilling’s capabilities in providing drilling services, equipment and expertise serve as a vital link in the supply chain, catering to the operational requirements of exploration and mining companies.
By partnering with a local provider, Kavango not only supports the Zimbabwean economy but also ensures the availability of reliable, cost-effective and responsive drilling services – a critical component in the exploration and extraction of the country’s mineral resources.
“We’re taking a 45 percent stake in Equity Drilling, our drill partner in Zimbabwe. We’ve spotted a commercial opportunity to build a supply chain to service metals exploration companies in the country. There has been little modern exploration in Zimbabwe, as such, local service provision is limited. “By providing Equity Drilling with loans to purchase two drill rigs, we take key steps towards achieving two of our core goals, which are accelerating our own mining and revenue-generating activities in Zimbabwe and modernising Zimbabwe’s gold exploration/mining sectors,” said the company in a statement.
This symbiotic relationship between Kavango and Equity Drilling exemplifies the kind of collaborative efforts that can strengthen Zimbabwe’s mining sector. By fostering the growth of local suppliers and service providers, the industry can become more self-reliant, reducing the reliance on imported goods and services and ultimately enhancing the overall competitiveness of the sector.
Moreover, the development of a robust supply chain can act as a powerful catalyst for attracting foreign investment. Multi-national mining companies seeking to establish operations in Zimbabwe will be drawn to the availability of a reliable and well-integrated network of local suppliers, service providers and infrastructure. This, in turn, can lead to increased capital inflows, technology transfer and job creation.
The partnership between Kavango and Equity is rooted in the former’s Capital Investment and Financing Programme (Cap-Ex Programme), which comprises staged capital raises for investment into specific value-generating projects.
The primary objective is to define mineable gold resources and acquire plant and equipment for larger-scale production. The first phase of the Cap-Ex Programme has been designed to maximise near-term revenue generation in Zimbabwe, in a disciplined and focused manner.
“We are extremely pleased with the rapid progress and achievements Kavango is making in Zimbabwe. So far, this approach has delivered highly encouraging results. In little over a year, we’ve gone from a standing start to being able to launch today’s capital investment programme at our Hillside Gold Project. We have a number of work streams running in parallel to maximise our speed of growth. “We commenced small-scale gold production at Hillside in March. Since then, we’ve built our mining and production teams and made modest improvements to the plant and site. We’ve also hosted several site visits by mining experts. In parallel, our exploration team has worked hard to deepen our understanding of Hillside’s geology and structural setting. It is thanks to their efforts that we are now able to move into resource drilling,” said Kavango CEO, Mr Ben Turney. He added, “With the strong foundation we have put in place, we are ready to initiate the first phase of our Capital Investment and Financing Programme.
This will involve a series of staged capital investments into revenue generating opportunities for Kavango. Highlights of the first phase will include resource drilling of our highest ranked deposits at Hillside and then, assuming results are favourable, building a 100 tonnes a day modern gold processing plant.” With the partnership with Equity
Drilling, the company noted that Kavango said they had identified a commercial opportunity to build a supply chain to service metals exploration companies in Zimbabwe. “There has been little modern exploration in Zimbabwe. As such, local service provision is limited. Kavango made an initial loan to Equity Drilling of US$240 000 in Quarter two 2024 and will lend a further US$240 000 during Quarter three 2024.
The Start-Up Loans are for the purchase of two drill rigs- one diamond rig and one multi-purpose rig- and will be repaid through gross profit generated from drilling contracts. “The Cap-Ex Programme will consist of a series of financing initiatives to fund development of Kavango’s mining and revenue generating activities. The board initially expects to raise money through standard issues of equity, with Purebond, the Company’s largest shareholder, acting as cornerstone. As Kavango’s business grows and the Company establishes a track record of success, the board anticipates accessing other pools of capital to fund growth,” said Kavango.
By nurturing and strengthening such local partnerships, Zimbabwe can thus easily bolster the competitiveness of its mining industry, attract foreign investment and ultimately, contribute to the realisation of its ambitious economic development goals.
Bongani Ndlovu
Online Reporter