REG - Kavango Resources - ZIM: US$5m CLN secured from Zimbabwe Pension Funds

Kavango ResourcesAnnouncement

22/04/2025 07:00

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RNS Number : 6426F  Kavango Resources PLC  22 April 2025

PRESS RELEASE

22 April 2025

KAVANGO RESOURCES PLC

("Kavango" or "the Company")

ZIM: US$5m CLN secured from Zimbabwe Pension Funds

Kavango Resources plc (LSE: KAV), the Southern Africa focussed mine
development and metals exploration company, is pleased to announce that it has
issued a US$5million convertible loan note facility (the "Convertible") to a
consortium of Zimbabwe registered pension funds (the "Consortium").

The Convertible is interest free can be drawn down in three tranches by
Kavango and is convertible into new ordinary shares in Kavango at a conversion
price of the USD equivalent of 1p per share (the "Conversion Shares"). The
Company intends that the Conversion Shares issued under the Convertible will
be issued to the Victoria Falls Stock Exchange ("VFEX"), as part of the
Company's planned referral listing. The VFEX is a US Dollar based stock
exchange. A further update will follow concerning the VFEX referral listing.

Ben Turney, Chief Executive of Kavango Resources, commented:

"We are delighted to have secured this US$5million investment facility from
the Comarton Managed Pension Funds Investments Consortium. A key driver of our
strategy in Zimbabwe is to promote local shareholder ownership. The country's
goldfields are incredibly rich, and it is important that citizens are offered
the opportunity to participate in their future success, through long-term
equity investment.

Today's announcement sends a strong message that Zimbabwe is open for
business. We look forward to this investment acting as a cornerstone for our
introduction to the Victoria Falls Stock Exchange a little later this summer.

The Consortium is an influential group of individual pension funds in Zimbabwe
that collaborates on investments. Twenty-eight consortium members have the
mandate to invest in equities and have indicated their intention to
participate in the Kavango investment facility.

As part of a rigorous due diligence, several consortium members and members of
the investment committee conducted site visits to review the Kavango's gold
projects. It reflects the strong progress our team has made, in less than two
years of operations in Zimbabwe, that we successfully passed this process.

We now intend to use the Comarton funds for mine development and construction
of our first gold processing plant. Kavango currently aims to bring Prospects
1, 3 and 4 at the Hillside Project into production over the next 12 months,
using modern mechanised mining.

The Consortium's backing of Kavango is a powerful endorsement of the Company's
business model and we look forward to building on this relationship in the
coming years."

Richard Muirimi, the Group Managing Director of Comarton Consultants (Private)
Limited (Comarton) commented:

"The Consortium is excited at having secured a partner to walk with in their
fourth investment quadrant: the mining sector, having already successfully
executed on the: targeted Property sector, Tourism and Agriculture sectors.

This partnership with Kavango answers to the key Consortium investment focus
of bedding the actual asset in hard currency, benefiting from potential
capital growth, generation of long term hard currency free cash flows and
contributing to the development of sustainable businesses that create
employment and other benefits for Zimbabwean citizens.

With a firm focus on ensuring all the four quadrants generate hard currency
cash flows, this partnership will contribute to the enhancement of the payment
of hard currency quarterly USD pensions on the Comarton portfolio being
implemented from 1 January 2025.

We have found Kavango: a professional entity, accommodative to the local
realities, adaptive and sensitive to local traditions/practices as to set a
firm foundation for collaborative partnership for the benefit of; members of
our pension funds, all shareholders and Zimbabwe at large."

Convertible Loan Note Structure

The Consortium's agent and administrator is Comarton Consultants (Private)
Limited, which has signing authority on behalf of the Consortium.

The Convertible is interest free and subject to Kavango maintaining good
standing of the agreement with Comarton. The Convertible can be drawn down by
the Company over a twelve-month period in three tranches.

·    Tranche 1

At least US$500,000, paid in US Dollars and to be drawn down immediately for
mine development in Zimbabwe.

·    Tranche 2

US$1,500,000 equivalent paid through conversion of Zimbabwe Gold, the official
currency of Zimbabwe ("ZWG"), into US Dollars at the Bank of England's
exchange rate via the Reserve Bank of Zimbabwe to be drawn down over the next
12 months for the import of mining equipment for Kavango into Zimbabwe.

·    Tranche 3

US$3,000,000, paid in US Dollars and to be drawn down over the next 12 months
for mine development in Zimbabwe.

All funds raised through the Convertible will be used for mine development in
Zimbabwe and for the import of mining equipment into Zimbabwe.

All Conversion Shares will be issued at a price of 1p per share, with the
USD/GBP exchange rate calculated on the mid spot price as quoted by the Bank
of England at 1630GMT/BST, on the working day of receipt of a conversion
notice (or next working day if received after 1630GMT/BST).

Conversion of the Convertible into the Conversion Shares is automatic on
satisfaction, or waiver by the Company, of certain conditions precedent,
including the planned VFEX referral listing.

Conversion Shares will be issued directly to participating Consortium members
on a pro-rata basis and admitted to trading on the VFEX, once the Company has
secured its referral listing. A separate announcement on Kavango's planned
referral listing on the VFEX will be issued shortly.

Kavango's Operations in Zimbabwe

Kavango is exploring for gold deposits in Zimbabwe that have the potential to
be brought into production by the Company quickly through modern mechanised
mining. The Company is targeting both open-pit and underground opportunities.

Currently, Kavango has two projects on the same greenstone belt, Hillside and
Nara.

Kavango exercised its option to acquire Hillside in April 2024. At Hillside,
the Company has two high-priority targets that it hopes to bring into
production over the next 18 months; Prospect 3 and Prospect 4. At Prospect 3
Kavango is investigating the potential for a selective open-pit mining
operation and higher-grade mechanised underground mine. Meanwhile, at Prospect
4 Kavango is pursuing a high-grade mechanised underground mining option.

In parallel to this, Kavango has an option to acquire the Nara Project that
currently runs until the end of June 2025. The Company is exploring for;
large-scale, high-grade mechanised underground mining opportunities at Nara.
The primary target zone is around the historic N1 mine, where the Company is
assessing the potential to expand artisanal workings at depth and along
strike.

Further information in respect of the Company and its business interests is
provided on the Company's website at www.kavangoresources.com and on Twitter
at #KAV.

For further information please contact:

Kavango Resources
plc
 

Ben Turney

+46 7697 406 06

First Equity (Broker)

+44 207 374 2212

Jason Robertson

Nurture Investment Management (Financial Advisors)

+263 867 719 0999

Zinzile Mlambo-Ziki

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