In an investor prospectus Kavango Resources has cautioned of potential significant funding challenges for its Zimbabwe projects as it moves closer to a secondary listing on the Victoria Falls Stock Exchange (VFEX), this week,Mining Zimbabwe can report.
By Ryan Chigoche
The miner, which operates locally through Kavango Zimbabwe, said its assets remain at an early stage of development and have yet to generate revenues.
Although directors believe existing proceeds will be sufficient for near-term working capital needs, the company stressed that advancing its exploration portfolio will demand fresh capital.
If mineralisation is confirmed through drilling, Kavango will require further funding to define JORC-compliant resources and complete feasibility studies.
This process is expected to take more than two years, followed by another two years or more to prove commercial viability.
That timeline underlines the importance of timely financing, which the company admits will depend heavily on investor appetite, global commodity and financial markets, and the regulatory environment.
According to the prospectus any delays or unfavourable terms could affect its financial standing and potentially result in the loss of licences. This risk is particularly pressing at the Nara project, where a tailings resource has already been identified and could be forfeited if capital is not secured in time.
To mitigate this, Kavango plans to exercise its option over Nara using proceeds from a potential UK subscription, while simultaneously looking to the VFEX for additional exploration capital.
The upcoming listing seeks to raise US$13.5 million to support the company’s ongoing operations and projects. As of last week, Kavango’s market capitalisation stood at US$44.24 million, which the company says reflects investor confidence in its long-term growth prospects.
The listing also ties into a broader trend in Zimbabwe’s mining sector. Authorities have positioned the VFEX as a gateway for foreign investment, offering hard currency capital at a time when junior miners often struggle to raise funds.
In recent years, the bourse has become increasingly attractive to resource companies, even as firms like Kavango highlight the long and uncertain path from exploration to production.
