For Michael Foster, the Kavango Resources story begins when he was approached by a couple of friends, he had worked with 20 years ago for another mining company. What started as an idea shared by two scientists is turning into an exciting mining prospect.

“They came to me in 2017. They had spent a lot of their own money on this project in Botswana looking for copper, nickel, and platinum group metals,” explains Foster, now the CEO of Kavango Resources. “It was a very large project. They had licenses to carry out prospecting and had spent $1.5 million of their own money researching the site. It had got to the stage they needed to raise money in the public market, so they came to me in London and I looked at it and we did an independent evaluation.”

The company was listed in 2018. Foster worked with the company founders to put together a team of people and raise the necessary capital, making excellent progress.

“Botswana is probably the easiest country in Africa to operate in. The area we’re in is in Western Botswana. You can get there easily and it’s politically stable,” Foster says. “There’s potentially a lot of mineral deposits in the area, such as copper and nickel, buried that haven’t been discovered. Having done all of that carefully and systematically, this year we have funding to do some drilling. So at that stage, almost three years from listing, we are getting to the point of discovering if this is real or not.”

Raising money is a challenge for any mining project, especially given the cyclical nature of the industry.

“When there’s a low, raising money is more difficult,” explains Foster. “From 2012 to 2018 was a tough time for the mineral exploration industry, but fortunately we have the skills and you can always raise money for good projects.”

Skin in the Game

That the project is based in Botswana is a big plus- while there are countries investors and mining companies might avoid as a risk-factor, Botswana is politically stable with strong infrastructure. The location is only half the equation, however.

“Our other big selling point is obviously our people. We have a good complimentary skill base of geologists, geophysicists, and corporate people,” explains Foster. “A good combination like that is critical in a small company, particularly when it comes to managing risk.”

Of course, the first job is finding those people. Fortunately, as Foster points out, the mineral exploration industry is a small world, especially in Africa.

“The two founders and I have been in the industry for over 90 years combined. So between us, we know people from networking and conferences,” Foster says. “We were set up by a geologist and a geophysicist, which is a good base to start from in terms of skills.”

While the connections of Foster and the company’s founders are valuable, they also believe strongly in drawing from local talent pools.

“It’s important to use local expertise so we recruit from Botswana, including the University. The people are quite young and inexperienced but so long as they have the right attitude, we can train them up,” says Foster. “They become valuable members of our team and buy into our geological model of what we’re trying to do. They know the country, they know the people in the country, local communities and how things are done.”

Foster is clear that a company like Kavango Resources, particularly as a small company, needs a combination of technical and financial skills, as well as projects themselves that have potential. But there is more to it than that.

As Foster tells us, there’s one element that sets Kavango Resources apart.

“The final differentiator is that we all have skin in the game,” he says. “We all have very sizeable shareholdings in the company so our overheads are small, we all take minimal salaries, so our overhead is one of the lowest on the exchange with most of the money going back into the ground.”

A Question of Geophysics

Having the right people and enough capital are two key pillars for projects like this, but ultimately any mining operation comes down to finding minerals in the ground. In Botswana, that presents miners with a practical obstacle.

“Botswana is covered in sand, so there are huge challenges in terms of geology,” Foster says. “Luckily, geophysics has advanced hugely over the last ten years and we can do surveys by aeroplane, mapping down to 400 metres below the surface, as deep as you want to go. A long time ago you wouldn’t have been able to model that data, but we have been able to develop detailed 3D models.”

Even then, there are still risks, and managing risk is another challenge. This is why Kavango Resources is working across two project sites in Botswana. Now they’re reaching the point where they will find out if those risks pay off.

“The next four months we need to define exactly what we’re going to do with the drilling, because drilling is expensive and if you’re going down 300 metres that is going to cost money,” Foster says. “We’re doing a lot more geophysical work so that when we do drill, we’re not just going into sand. Then, probably around the beginning of the third quarter of this year, we’ll start a drilling campaign. At our second site, we did some flying last month and we’re awaiting the results. We have two projects and the bigger of the two we want to get to the point of drilling by the end of this year.”

It’s clear talking with Foster that this is a real moment-of-truth for the company.

“With projects like this I think there is usually a five-year window to prove what you’re trying to do,” he says.

But experience says Foster gives us reason to be optimistic.

“This is the sixth small company I’ve personally been involved with in the last 25 years and they’ve all gone from not very much to quite substantial sales,” he says. “You mustn’t lose sight of that goal or you can get too focused on the day-to-day stuff. We’re not looking for a small mine, we’re looking for a major deposit and the beginning of something big. When you are managing small companies and growing them, you have to put together the right team of people, and get the right timing.”