Kavango Resources Regulatory News (KAV)

PRESS RELEASE

09 May 2022

KAVANGO RESOURCES PLC

("Kavango" or "the Company")

KSZ - Second Mineralisation Target Type at the GRS

The Great Red Spot (the "GRS") has been recognised as a large-scale exploration target in Botswana for major metal and mineral deposits since the mid-1970s. However, technology has only advanced sufficiently in recent years to allow effective exploration of this.

Kavango Resources plc (LSE:KAV) has been conducting exploration over this 5km x 8km magnetic body since 2018. Most recently, the Company drilled exploration holes KSZDD001 and KSZDD002 in this area. Initial results from KSZDD001 (announced 16 November 2021) provided Kavango with an exploration lead that appeared to support a late 1990's theory about the GRS, in that it could host a form of Iron Oxide Copper-Gold ("IOCG") style mineralisation.

IOCG systems can host highly valuable copper, gold and uranium ores. The large size and relatively simple metallurgy can produce extremely profitable mines.

Following six months of additional field exploration and detailed desktop analysis, Kavango confirms it now believes the GRS conforms to an idealized model for a large IOCG-style system.

The Company believes this is a significant development for the prospectivity of the GRS. IOCG deposits are an alteration "overprint" of the host geology when they form. Therefore, Kavango believes the IOCG model represents a second mineralisation style possibly present within the GRS, in addition to the existing potential for nickel/copper (Ni/Cu) sulphide deposits.

Highlights

- IOCG mineralisation model for the Great Red Spot ("GRS") first proposed in late 1990s

- This is a second possible mineralisation style for the GRS, which Kavango is now targeting in addition to the Ni/Cu sulphide model

- Initial contact with Proterozoic basement host rocks at 950m depth

- Draft economic comparables study confirms potential viability of the modelled IOCG deposit type at this depth in this region

- Great Red Spot exhibits similar geophysical signatures to the Olympic Dam IOCG ore deposit in Australia. These include:

- Coincident aeromagnetic and ground gravity anomalies, with clear spatial and structural symmetries

- Similar "crown-like" shape in inversion results (morphology)

- Strong 30 milliGal Gravity anomaly (announced 21 January 2021)

- Multiple zones for possible alteration (heterogeneities) identified by 16km of advanced Audio-Magnetotelluric ("AMT") surveys

- Physical property testing of core samples recovered from Hole KSZDD001 in November 2021 revealed concentrations of magnetite

- KSZDD001 intercepted a limb of the magnetic modelled "crown"

- Magnetite zones are associated with other IOCG deposits

- Kavango's interpretation of the magnetic model of the GRS, projects that the magnetite content intensifies closer to the centre of the GRS

- Regional geological setting supports the prospectivity of the GRS to host multiple ore deposit styles:

- The GRS sits on the western edge of the Kaapvaal Craton

- It lies in the nexus of 4 interpreted significant regional faults

- Enhanced probability to host large magmatic intrusions and alteration systems, due to the structural complexity and tectonic location

- Next steps

- Further AMT surveys over the GRS

- Final report of an economic potential study for the IOCG model

- Kavango to present the GRS IOCG exploration model to shareholders in the next week

Ben Turney, Chief Executive Officer of Kavango Resources, commented:

"It is important to be careful when comparing a geophysical model to an existing ore deposit. Geology is complex and no two deposits are the same.

We first appreciated the geophysical similarities between Olympic Dam and the Great Red Spot in November last year. Rather than rush to publish, we've instead worked diligently on this new target over the last 6 months. We've been mindful that while the tectonic settings of Olympic Dam and the GRS are similar, the host geology and alteration could be very different.

Therefore, we sought to gather more evidence that the GRS could contain an alteration system, before publishing this new large-scale target.

Our comparison with Olympic Dam is led by rigorous geophysical modelling. The correlation of the magnetic data with gravity data over the GRS is very similar to the nearly coincident magnetic and gravity anomalies originally identified at Olympic Dam. In addition, the shape and size of the modelled magnetic bodies of both Olympic Dam and the GRS almost mirror one another. The distinctive "crown shape" is particularly noticeable.

Where we feel we have an edge over the original Olympic Dam exploration programme is that we now have Audio-Magnetotelluric ("AMT") technology. AMT allows us to measure resistivity deep into the Earth's crust, to map rock types and areas of alteration. With the sophisticated modern inversion software available to Kavango, we are able to produce very clearly defined section views. This could prove to be invaluable as we advance this project.

The magnetite lead is also an intriguing one. While KSZDD001 was not targeting the IOCG target, it did (inadvertently) intercept one of the limbs of the magnetic "crown". The concentration of magnetite encountered corresponds to what could represent a larger zone of magnetite close to the centre of the GRS. If this model proves to be correct it could be a physical indicator of an IOCG system.

What is particularly exciting about the new IOCG target in the GRS is that it is in addition to our existing nickel/copper sulphide model, stacked beneath it. We also continue to rapidly advance this nickel/copper sulphide program and look forward to publishing the next phase of TDEM results.

Meanwhile, there is much more work we need to do on the IOCG target in the coming months. The next steps include publication of the final report of the economic comparables study that we have commissioned and also to complete the next phase of AMT surveys to enhance our model."

Summary of IOCG exploration theory

Kavango proposes an additional exploration target zone for the Great Red Spot (the "New Target Zone"). The New Target Zone is in addition to and lies beneath the current target horizon for the Karoo hosted nickel/copper sulphide exploration program.

The New Target Zone meets the criteria of a coincident magnetic and gravity anomaly, that was used by Western Mining in 1975 as sufficient justification to drill their Olympic Dam target. The Great Red Spot magnetic anomaly inversion is very similar to an inversion of public domain data for Olympic Dam, in terms of size and morphology.

The New Target Zone has also exceeded these criteria with the addition of long 8km Audio-Magnetotelluric profiles, which have identified resistivity changes that could relate to the identification of alteration within the GRS.

An IOCG model was first proposed for the GRS in the late 1990's. The addition of new geophysical data and inversion technologies have greatly enhanced this opportunity, by providing new resolution in detail and depth on this target.

Kavango commissioned an independent economic comparables study to test the viability of the New Target Zone as a viable economically interesting target. The draft report confirms this and Kavango will release the final report on completion.

Geological Setting

The Great Red Spot is on the western margin of the Kaapvaal Craton, which Kavango interprets as a promising location for magmatic intrusions and mineralising systems. It lies at the nexus of 4 interpreted regional geological structures.

Kavango's interpretation of available regional data leads the Company to conclude that the Great Red Spot is located in an enhanced position for the potential for multiple ore deposit models, including both the IOCG and Ni/Cu magmatic sulphide systems.

Idealised IOCG model and Olympic Dam summary

IOCG systems are often multi-kilometre mineralised "overprints" of local host rocks. They can vary a great deal in their composition but do share several common characteristics. IOCG systems are known as "alteration" systems, meaning that mineralisation formed during hydrothermal phase transitions. These hydrothermal phases are driven by deep magmatic intrusives that act as heat sources. This means, an IOCG system can "overprint" the host rock lithology with both alteration and mineralization. 

Typically, IOCG systems feature both hematite and magnetite alteration zones (forms of iron oxide), which can host copper, gold, cobalt, silver and uranium.

Olympic Dam comparison with the Great Red Spot

Olympic Dam is a large multi-kilometre scale IOCG alteration system that was discovered by Western Mining in 1975. It has been mined and extensively studied. Although Olympic Dam is considered unique, IOCG deposits are numerous and many are mined.

The New Target Zone at the Great Red Spot was first proposed in the late 1990s. The addition of new geophysical data and modern inversion technologies have greatly enhanced this opportunity, by providing better resolution of the target in detail and to depth.

Kavango has used three separate data sets to develop its geophysical model for the New Target Zone, including:

- Airborne Magnetic data

- Ground Gravity data

- Ground AMT data

The New Target Zone includes a coincident magnetic and gravity anomaly closely comparable to the one that was used by Western Mining in 1975 as the basis for testing the Olympic Dam target.

Kavango believes its use of AMT technology provides the Company with a more robust exploration model than the one used by Western Mining. AMT technology was not utilized at Olympic Dam and recent developments in inversion software have made the exploration technique even more powerful.

AMT sections taken by Kavango over the GRS indicate complexities below 950m within the Proterozoic host rocks, which the Company believes may represent initial indications of possible IOCG-style alteration zones.

Given the interpreted complexity and size of the possible alteration zones Kavango has identified using AMT, the Company needs to carry out further work to resolve each zone to allow for more effective targeting of potential mineralization.

Further AMT surveys have been commissioned and the Company will release results once processed.

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

Ben Turney

bturney@kavangoresources.com

+46 7697 406 06

 First Equity (Joint Broker)

+44 207 374 2212

Jason Robertson

SI Capital Limited (Joint Broker)

+44 1483 413500

Nick Emerson

Kavango Competent Person Statement

The technical information contained in this announcement pertaining to geophysics have been read and approved by Mr. Jeremy S. Brett, M.Sc., P.Geo., Senior Geophysical Consultant, Jeremy S. Brett International Consulting Ltd. in Toronto, Canada. Mr. Brett is a member of the Professional Geoscientists of Ontario, the Prospectors and Developers Association of Canada, the Canadian Exploration Geophysical Society, and the Society of Economic Geologists. Mr. Brett has sufficient experience that is relevant to geophysics applied the styles of mineralisation and types of deposits under consideration to act as a Qualified Person as defined under the Canadian National Instrument 43-101, Standards of Disclosure for Mineral Projects.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF REGULATION 2014/596/EU WHICH IS PART OF DOMESTIC UK LAW PURSUANT TO THE MARKET ABUSE (AMENDMENT) (EU EXIT) REGULATIONS (SI 2019/310) ("UK MAR"). UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION (AS DEFINED IN UK MAR) IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.