Brandon Munro, Managing Director, Kunene Resources

Kunene set to begin drilling at Okanihova copper project in Namibia.

Brandon-Munro_MD_Kunene-Resources-BLOGThe past year brought many changes for Kunene Resources including a new joint venture with First Quantum Minerals. Could provide an overview of Kunene Resources’ operations in Namibia over the past year?

Brandon Munro (BM): Kunene is a listed company that has invested fairly heavily in geophysics and structural work. In February 2014, Kunene signed a joint venture agreement with First Quantum Minerals. First Quantum and Kunene Resources are attracted to the project because the geology in the area has a strong resemblance to the Zambian Copperbelt. This theory emerged in academic circles a decade ago but gained real traction after Kunene acquired the Kaoko Project license area and discovered cobalt for the first time in Namibia. Since then, we have established that the Kaoko Belt is an analogue for the Copperbelt through discovery of a horizon of copper cobalt, which is almost identical to the mine series in the Democratic Republic of Congo or the ore shale in Zambia. Kunene has had experienced academic and professionals from Zambia visit the project to confirm our findings.

Could you elaborate on Kunene Resources’ exploration work within Namibia?

BM: Kunene’s flagship exploration project in Namibia is the Okanihova copper project, which is part of the company’s Kaoko Project. The Kaoko Project comprises seven contiguous exploration licenses totaling 3,500 square kilometers (km). Up until the 1970s, the area was semi-prohibited and one was not allowed to enter without a permit. The conflict in Angola triggered even further restrictions on the area as it was used exclusively as a base for the South African armed forces. In 1991, Rio Tinto and AngloAmerican each held part of the ground. Just as they were to start drilling operations, both companies withdrew from exploration in the country. They left behind a substantial database from which we were able to gather our own interpretations, yet a significant amount of targets were left untested. At this point, Kunene Resources intends to begin drilling at the end of October 2014. We expect to drill a minimum of 3,000m at this stage, which is quite a small volume, given the number of targets that we have and the size of our landholding. Drilling will be done in conjunction with mapping and structural work around the area.

In terms of Okanihova, Otuziru and the Dolomite Ore Formation, can you elaborate on what stage each one of these targets is at?

BM: Okanihova is a copper sulfide target, which is still at a very early stage as Kunene has only completed 1,000 meters (m) of drilling. Kunene has found very broad intersections of low-grade primary sulfide copper, which is a very good sign of prospectivity, but it still requires higher grade and/or scale to become economically viable. There has been a significant amount of structural work done in a part of it, and it is our main focus out of the three. The Okanihova project and the Dolomite Ore Formation are financed through the First Quantum joint venture, as both of them are copper cobalt targets. $2 million of funding is secured, which includes 2,000 m of drilling and further investment is available based on prospectivity and positive results.

Otuziru is a lead zinc silver target where Kunene has completed and additional phase of drilling, identifying an ore shoot, but that is not really First Quantum’s interest.

What are the criteria that Kunene has to start developing an asset?

BM: So far Kunene’s strength has been in very early stage conceptual work. The company has an exceptionally talented Chief Geologist that has identified concepts that no one else has noticed. Kunene started as a private company funded by myself, and with that genesis we were able to create value through the intellect and drive of our geological team. Now that Kunene is in a listed format, we have moved along the development curve but we are still leading with talent and following that intellect with funding to test concepts and theories. Kunene has a good track record in attracting funding for our projects over the last three exceptionally difficult years.

Can you elaborate on the infrastructure in the surrounding area for the Kaoko project?

BM: There is a very unusual combination of virtually unexplored area and excellent infrastructure, which was ironically both created by conflict. Our license area is close to the regional capital of Opuwo, which has basic infrastructure such as a hospital, fuel stations, and an airport. There is a tar road running from Opuwo all the way to Windhoek and there are very good gravel roads running through the license area. There is a 320-megawatts (MW) power station, which is driven by hydropower, and there are power lines running through the licensed area. The biggest challenge in Namibia is water, but we are lucky to be close to the Kunene River. There is also a rail link not very far away.

Can you speak of Kunene Resources’ relationship to the Namibian Former Robben Island Political Prisoners Trust (NFRIPPT) and the importance that this has for Kunene’s CSR?

BM: When it comes to social responsibility, Kunene likes to regard itself as a leader in the industry. Kunene deploys its resources very intelligently as to have a significant impact on those around us. Kunene tries to have an impact firstly through our employment practices. Kunene has never used a machine to build a single road in the entire area. It is all done by hand, which has had a massive employment impact on the local area. A 5% shareholding in Kunene was given to NFRIPPT, which stemmed from a philosophical point of view. Kunene has been successful in Namibia and a large part of that is the ease of operating in the country. The NFRIPPT has contributed substantially to the stability and the nature of the peaceful handover that we had in 1991. For Kunene it is about recognizing the impact the NFRIPPT has had on how Kunene can run its business in Namibia. It is our way of giving back.

This interview was part of research being conducted by GBR for its upcoming Mining in Africa Country Investment Guide (MACIG) 2015. To participate in this report, please contact Sharon Saylor at ssaylor@gbreports.com.

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