Kavango Resources Regulatory News (KAV)

PRESS RELEASE

8 September 2020

KAVANGO RESOURCES PLC

("Kavango" or "the Company")

3D Model confirms KSZ Norilsk style rock formations

Kavango Resources plc (LSE:KAV), the exploration company targeting the discovery of world-class mineral deposits in Botswana, is pleased to publish initial images from its computerised 3D geological modelling, developed from data obtained from Kavango's Kalahari Suture Zone (KSZ) project in south-western Botswana (the "3D Model").

These images confirm significant similarities between the northern (Hukuntsi) section of the KSZ and the giant Norilsk mining centre in Siberia. Norilsk accounts for 90% of Russia's nickel reserves, 55% of its copper and virtually all of its' platinum group metals.

Kavango increasingly believes that Hukuntsi has the potential to host very significant copper, nickel and platinum group metal deposits.

Highlights

v Kavango is the first company to prepare a computerised 3D geological model of the Kalahari Suture Zone (KSZ).

v Kavango's geophysical team is conducting the 3D modelling in conjunction with Mira Geoscience, a world leader in computerised 3D imagery of geological and geophysical data.

v The 3D Model incorporates thousands of data points, collected from:

- 2 phases of airborne electro-magnetic (EM) and magnetic surveying

- Drill hole data and CSAMT resistivity surveys over the northern (Hukuntsi) section of the KSZ

v The images depict flat lying Karoo gabbro sills in 3D, which bear a remarkable resemblance to those containing large deposits of copper, nickel and platinum group metal (Cu/Ni/PGM) rich massive sulphides in the Norilsk mining centre in Siberia.

- 10 district-scale sills identified, covering over 300km2 in aggregate

- Most of the sills lie within 400m of the surface, making them viable exploration targets

v Illustrative cross-sectional diagrams, highlighting "Norilsk style" rock formations and possible trap zones for massive sulphides are available on the Company's website

v Kavango's geologists will now work to select up to six of the most prospective targets for follow up exploration and drilling.

Michael Foster, Chief Executive Officer of Kavango Resources, commented:

"The imagery coming out of the computer-generated geological model is quite spectacular and potentially transformational for the Company.

We are now able to view the gabbroic intrusions in 3D. We can see their shape, size thickness and their depth from surface. We can clearly identify and locate the thicker parts of the sills for follow up EM surveying.

This is a major step forward in our exploration, which should culminate in an extensive drilling programme in the KSZ."

The Hukuntsi 3D Model

Over recent months, Kavango's geophysical team has been entering thousands of data points into the powerful Mira Geoscience 3D modelling software package.

The data includes proprietary data gathered by the Company from its surveying and drilling work in the KSZ, as well as data from third party sources such as other regional exploration drilling carried out in the 1970s and water boreholes. 

The initial imagery from the 3D geological modelling of the KSZ confirms that the Karoo sills (a 180M year old magma plumbing system) lie immediately above a much older and larger (Proterozoic) gabbro plumbing system.

It seems likely that both plumbing systems used the same deep-seated crustal faults and conduits to bring magma to the surface.

Although both systems contain gabbro, the Proterozoic rocks are distinguished by their much higher magnetic susceptibility.

Encouragingly, most of the Karoo sills lie within 400m of the surface. This makes them viable targets for further field exploration.

Positive geological comparisons between Hukuntsi and Norilsk underground rock formations

The Karoo sills at Hukuntsi display the characteristic "gull wing" and "keel" morphology in cross section, which is typical of those seen at Norilsk.

Two sample cross-sections (marked "A-B" and "C-D") can be seen on the Kavango website (KSZ Project) alongside a schematic diagram of a typical Norilsk type sill (S.J. Barnes et al 2015. Ore Geology Review. V76). These can be seen on the link below:

https://www.kavangoresources.com/media/attachments/2020/09/07/kav-hukuntsi-3d-model-with-airbone-em-and-cross-section-a-b-3.pdf

https://www.kavangoresources.com/media/attachments/2020/09/07/kav-hukuntsi-3d-model-with-airbone-em-and-cross-section-c-d-11.pdf

https://kavangoresources.com/images/2020/09/07/norilsk-x-section.jpg

From the Norilsk schematic, one can see that massive sulphide accumulations usually occur in the thicker "keel" of the sill.

Typically, the Cu/Ni/PGM content of the gabbro in the "gull wings" is low, since much of these metals have combined with free sulphur and gravitated as a heavy sulphide liquid into the "keel" prior to crystallisation.

Cross-section "A-B" illustrates a sill with more pronounced "gull wings" and a shallower "keel", which is a possible trap zone for massive sulphides.

Cross-section "C-D" illustrates a much thicker sill, with less pronounced "gull wings" and two "keel" possible trap zones that have deeper basements.

Through its 3D Model, Kavango has identified dozens of similar "gull wing" and "keel" formations across the 10 district-scale horizontal sills located at Hukuntsi.

The identification of such a concentration of "Norilsk style" geological structures is promising.

Following further analysis this summer of data and core samples gathered from the KSZ, there is increasing evidence that Hukuntsi could host multiple magmatic sulphide deposits.

Kavango's recently updated petrology report for the KSZ (announced 6 August and prepared by Dr Martin Prendergast) confirmed exceptionally high sulphur readings in core samples taken from the Company's 2019 drill campaign.

Dr Prendergast also noted that all of the copper and over fifty per cent of the nickel resides in the sulphides, which suggests that free sulphur was available for the development of a dense copper-nickel rich sulphide (immiscible) liquid phase.

Meanwhile, Dr David Holwell's Mineral Systems Review (MSR) (announced on 29 April) has confirmed the presence of 12 key geological features in the KSZ, associated with other world-class magmatic sulphide Cu/Ni/PGM deposits worldwide. These include the substantial commercial deposits found at Norilsk (Siberia), Voisey Bay (Canada), Raglan (Canada), Jinchuan (China), and the Thomson Nickel Belt (Canada).

Next steps at Hukuntsi

Kavango's geologists will now select six of the most prospective "keels" at Hukuntsi for large loop, low frequency EM surveying to test for massive sulphide concentrations, which are known to be highly conductive.

The Company expects this work will result in the identification of high-priority targets for future drilling.

The first draft of Dr Holwell's MSR of the KSV can be read here -

https://www.kavangoresources.com/media/attachments/2020/04/29/mineral-systems-review-of-the-ksz-botswana.pdf

To view a short presentation by Kavango's Chief Geologist, Mike Moles, about the KSZ's potential to host one or more 'Norilsk style' deposits please visit -

https://twitter.com/KavangoRes/status/1286236091972976641?s=20

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

Michael Foster

mfoster@kavangoresources.com

SI Capital Limited (Broker)

+44 1483 413500

Nick Emerson

NOTE TO EDITORS

The Kalahari Suture Zone

Kavango's 100% subsidiary in Botswana, Kavango Minerals (Pty) Ltd, is the holder of 12 prospecting licences covering 8,324.7km2 of ground, including 10 licences over a significant portion of the 450km long KSZ magnetic anomaly in the southwest of the country along which Kavango is exploring for Copper-Nickel-PGM rich sulphide ore bodies. This large area, which is entirely covered by Cretaceous and post-Cretaceous Kalahari Sediments, has not previously been explored using modern techniques.

The area covered by Kavango's KSZ licences displays a geological setting with distinct similarities to that hosting World Class magmatic sulphide deposits such as those at Norilsk (Siberia) and Voisey Bay (Canada). 

The Norilsk mining centre is about 2,800km northeast of Moscow and accounts for 90% of Russia's nickel reserves, 55% of its copper and virtually all of its PGMs. Kavango's licenses in the KSZ display a geological setting with distinct geological similarities to the magmatic sulphide deposits at Norilsk. Magma plumbing systems are a key feature of these deposits.

KSZ Definitions

Massive sulphide: When a deposit consists almost entirely of sulphides it is termed "massive". When it consists of grains or crystals of sulphide in a matrix of silicate minerals, it is termed "disseminated".

Gabbro/gabbroic: A coarse grained, medium to dark coloured rock, formed from the intrusion of mantle derived molten magma into the earth's crust. Gabbroic rocks (or "gabbros") are formed as the molten magma crystallizes and cools.

Gabbroic sills: Relatively thin, planar, horizontal bodies of solidified gabbroic magma that intruded into layers of sedimentary rock whilst still molten.

Karoo: The Karoo System covers 1.5 million km2 of the semi-desert region of Southern Africa. Rocks in this system formed 180-310 million years ago.

Magma Plumbing System: Magma plumbing systems are composed of stacked horizontal sills connected to each other via vertical dykes. A continuous flow of magma (containing "free" sulphur) through a magma plumbing system may have allowed the accumulation of metal sulphides in certain trap sites within the sills. This is because metal sulphides are heavy and tend to sink to the bottom of magma. Over time, accumulations of metal sulphide could have led to the formation of economic deposits of Copper-Nickel-PGMs. 

Primary sulphides: Are sulphide complexes (or crystals) that form as the magma cools and are composed of elements that are present at the time of initial crystallization. Secondary sulphides may form after the magma has solidified either by the introduction of new elements into the rock or by re-mobilising elements already present through changes in pressure, heat etc.

Sulphide mineralisation: If there is sufficient sulphur in the molten magma, it will tend to combine with metals (Cu, Zn, Ni, Co, Pb, PGEs etc.) to form metal sulphide complexes, which may coalesce to form massive sulphide deposits. If the melt is sulphide poor, the metals will be taken up into the silicate minerals that form as the magma cools and will not usually form economic deposits.