Pangolin explores Botswana

Botswana is the jurisdiction of choice for Pangolin Diamonds (TSXV: PAN) founder and chairman Leon Daniels.

“Botswana is a great country — the geology is very good,” Daniels said in a phone interview from Uruguay in October. “It’s safer to invest in, in my opinion, than Canada,” he adds, praising its legal framework, infrastructure, and the ability to do field work year-round.

Daniels, who has 35 years of experience in diamond exploration and production, knows the country well. The geologist, whose work in diamond exploration in Botswana extends all the way back to 1980, was also a founder of Botswana-focused African Diamonds. The AIM-listed junior was taken over in 2010 by Lucara Diamond (TSX: LUC), which paid $100 million for its AK6 deposit — now the Karowe mine.

While Pangolin was still a private company, until the end of last year, Daniels used some of the proceeds from that takeover to fund it, acquiring four early stage exploration projects in Botswana.

Pangolin listed on the Toronto Venture Exchange in March, through a reverse-takeover transaction with Key Gold Holdings.

Even with a weak market for exploration, the junior has managed to get some traction.

It’s completed two modest financings: $2.2 million as part of its RTO, and $1.6 million in April.

“We’ve not had any problem raising money whatsoever — on both occasions we were oversubscribed,” Daniels says. “At present, we’re well funded until the middle of next year. We don’t run expensive operations and we own most of the geophysical equipment we use.”

The company’s stock has risen from under 10¢ in March to as high as 53¢ in October.

The stock’s latest leg up in October came in response to news from the 1,545-sq.-km Tsabong North project, in southwest Botswana. Pangolin announced that it had found one of the largest kimberlites in the world at its Tsabong North project, when what it thought was two separate pipes, Magi 01 and Magi 02, turned out to be part of a single intrusive complex.

With a surface area of 270 hectares, the Magi kimberlite is one of the largest kimberlites in the world. Daniels says Magi is at least 1,200 metres long east to west, and drilling at the kimberlite is stepping out a further 400 metres east and west. Pangolin plans to drill another seven holes at Magi, which has already seen three holes. The core drilling will be used to model the complex geology of Magi, potentially in preparation for larger-diameter drilling.

While Pangolin doesn’t know yet if Magi is diamondiferous, the project is located in a prospective area just north of the Tsabong kimberlite field that hosts Firestone Diamonds (LSE-AIM: FDI) MK1 kimberlite. At 180 hectares, MK1 is one of the world’s largest diamondiferous kimberlite pipes.

The other piece of news from Tsabong North in October was the discovery of a second kimberlite 12 km north of Magi, Martin 01. A hole drilled into the magnetic target hit kimberlite at 85 metres depth. Core samples have been shipped to a lab for processing. Geophysical modelling suggests Martin 01 could be 31 hectares.

More than 50 kimberlite targets have been identified at Tsabong North.

Pangolin also holds the Jwaneng South, Malatswae and Mmadinare projects in Botswana.

In early October, the company began drilling two holes to roughly 150 metres depth into a 120-hectare kimberlite target at Jwaneng South, which is located 50 km south of the world’s richest diamond mine, Debswana’s Jwaneng.

Pangolin has also drilled 10 percussion hammer holes into “diverse geophysical targets” at Malatswae, which is a prospective, but technically difficult area in northeastern Botsawa that has been successively explored and then abandoned by different parties since 1984. The drill results will give Pangolin a better understanding of the geology at Malatswae, which is about 70 km southeast of Debswana’s Orapa mine.

Lastly, at Mmadinare, in the country’s northeast, Pangolin is evaluating a near-surface volcanic intrusion with trenching.

In late October, Pangolin shares traded at 39¢ in a 52-week trading range of 8¢-53¢. The company has 65.7 million shares outstanding.