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Shares of Kavango Resources PLC (LON: KAV) fell 9.32% after the company raised £1.9 million via placement of 35.3 million shares at 5.5p each on Tuesday.
The company’s shares fell to the 5.2p level then rebounded as markets reacted to the share issue, which diluted existing shareholders.
Ben Turney and Mike Moles, Kavango’s directors, also subscribed to 1.1 million new ordinary shares at the same price worth £60,000, bringing the total amount raised to £2 million.
The mining company intends to expand the drilling operations at its Kalahari Suture Zone in Botswana, a joint venture held equally by Kavango and Power Metal Resources PLC.
Kavango intends to start drilling Target B after completing drill operations at the A2 and C1 targets.
Ben Turney, Kavango’s CEO, said: “Exploration results this year, across all our projects, have consistently surpassed our expectations. We are especially encouraged by the results of the TDEM surveys in the [Kalahari Suture Zone]. While the conductance of targets A2, C1 and B1 appear to suggest they fall within the range of massive sulphides, we take a high degree of comfort from the “negative” results of A1 and D1. The fact that the TDEM surveys have selectively identified EM conductors gives us the confidence we are using the right remote sensing technology to define specific drill targets,”
Kavango’s shares have just bounced off a significant resistance level from a technical perspective and are headed towards the 5p resistance level. However, the shares could reverse course and head higher if the level holds in future.
*This is not investment advice.
Kavango Resources share price.
Kavango Resources shares plunged 9.32% to trade at 5.35p, dropping from Wednesday’s closing price of 5.90p.
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