Kavango Resources Regulatory News (KAV)

PRESS RELEASE

20 April 2021

KAVANGO RESOURCES PLC

("Kavango" or "the Company")

KSZ Hukuntsi - TDEM conductor identified

Kavango Resources plc (LSE:KAV), the exploration company targeting the discovery of world-class mineral deposits in Botswana, is pleased to announce the identification of an electro-magnetic (EM) anomaly in Target Area A in the Hukuntsi (northern) section of the Company's Kalahari Suture Zone ("KSZ") Project.

The anomaly appears to be a large conductive body (the "Conductor") that lies between 250 and 700m from surface and appears to sit within the lower parts of a gabbro "keel", as predicted by the Company's proprietary 3D-Underground Model of Hukuntsi announced on 8 September 2020. Kavango believes this is in a promising geological setting.

Highlights

v The Conductor was identified through the analysis of data from the second Time Domain Electro-Magnetic ("TDEM") survey completed on Target Area A:

- The ground-based, fixed loop TDEM surveys have been deployed to search for super conductors within the deeper "keels" of the extensive gabbroic intrusions in the KSZ.

- The first two surveys (A1 & A2) were completed in close proximity to one another in Target Area A

- Spectral Geophysics Ltd ("Spectral"), who are conducting the surveys on behalf of the Company, concluded that the Conductor "is interpreted to be caused by a shallow dipping, discrete conductor at least 1km in strike with a large decay constant (~340msec) that could indicate the presence of metallic sulphides"

- The actual size of the causative source of the Conductor and its thickness will only be determined by drilling

- The Conductor is oriented on a plunging plane, with a minimum depth of 250m, and a maximum depth extension of 450m (that is to a depth of 700m below surface).

v Given the size and the nature of the EM signature, Kavango sought independent verification of the validity and accuracy of the TDEM data from three independent geophysical consultants, including a specialist plate modeller who is experienced in modelling highly conductive EM environments. These consultants confirmed:

- The TDEM surveys collected valid and accurate data readings

- The equipment used to collect the TDEM data, the procedures adopted, the processing techniques (software) and the interpretation of the final results are all valid for this type of survey.

- The plate model is accurate (plate modelling estimates the size, geometry and orientation of subsurface conductive bodies)

- The EM signature of the Conductor is notably distinct from the surrounding conductive environment

- TDEM surveys are the appropriate technology to identify conductive bodies in the KSZ.

v Using its proprietary 3D-Model of the underground geology at Hukuntsi, Kavango concludes that the Conductor is in the right geological setting for drilling (250m from surface to the projected "keel" of the gabbroic intrusion at 700m).

v Spectral is continuing TDEM surveys on Target Areas "B","C" and "D" at Hukuntsi.

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

"The apparent identification of a large EM anomaly within the "keel" of a gabbroic intrusion in Target Area "A" is promising.

While we were hopeful of what the first TDEM surveys of the KSZ might uncover, we are encouraged to have identified a conductive body of this size, in this geological setting so early in the programme.

As a prudent step, we have sought expert independent verification of the TDEM data and techniques employed.

Initial analysis confirms that the work carried out by Spectral was thorough, the data and the position and conductivity of the Conductor are reliable. Further work is still needed, but I am pleased with the validation we have so far received. 

I'd like to thank Spectral, the independent contractors and our in-house team for the excellent work they have completed on behalf of Kavango.

This is the first time TDEM surveys have been deployed in the KSZ. We are confident this technology holds the key to unlocking the project's significant potential. TDEM surveying will continue at an accelerated pace on the remaining principal target areas so we can prioritise targets for detailed drill site locations."

TDEM surveys at Hukuntsi

On 30 November 2020, Kavango announced it had identified four "Norilsk-style" target areas at Hukuntsi for further exploration. These target areas cover 182.5km2 and incorporate deep "keel" formations in the Karoo-age gabbros, with long axes. The four target areas include:

- Target Area A (8km x 9km)

- Target Area B (6km x 10km)

- Target Area C (4.5km x 5km)

- Target Area D (3.5km x 8km)

In December 2020, the Company commenced orientation work on the first two surveys on Target Area A (A1 & A2). The interpretation and modelling was completed in late February, with independent data verification sought over March and into April.

The Conductor at A2

The Conductor appears to lie at a minimum depth of 250m and maximum depth extension of 450m (that is to a depth of at least 700m below ground). Spectral concluded that the Conductor "is interpreted to be caused by a shallow dipping, discrete conductor at approximately 1km in strike with a large decay constant (~340msec) that could indicate the presence of metallic sulphides".  The actual size and thickness of the causative source at depth will only be determined by drilling

The EM decay constant (TAU) within the anomalous areas is calculated at approximately 340msec. These values are similar to nickel sulphide deposits discovered elsewhere in the world.

According to the Company's 3D-model of the underground geology at Hukuntsi, the Conductor appears to lie at the base of a Karoo gabbro intrusive "keel", which is the right geological setting for a potential mineral deposit. The Company is encouraged by this data.

To help further de-risk the Conductor, the Company sought independent expert verification of the data gathered from the TDEM surveys. This has confirmed the integrity of the methods used by Spectral, the quality of the data collected and the conclusions Spectral reached in its final report.

Next steps

The Conductor will be re-surveyed on two or three other survey lines from a new TDEM loop position to obtain further confirmation.

Meanwhile the TDEM surveying of Target Areas "B", "C" and "D" will continue. Spectral will undertake either one or two TDEM surveys on each of these Target Areas.

The planned surveying of all four Target Areas should be completed before the end of June. On completion, any conductors identified will be followed up with additional, offset TDEM loops at higher resolutions. Offset loops will provide important information on the geometry and properties of any targets prior to subsequent exploration drilling.

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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 additional information please contact:

Kavango Resources plc

Ben Turney

bturney@kavangoresources.com

First Equity (Joint Broker)

+44 207 374 2212

Jason Robertson

SI Capital Limited (Joint 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 14 prospecting licences covering 7,573.1km2 of ground, including 12 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's 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

High Speed EM Conductors: are bodies of highly conductive minerals such as graphite, magnetite and metal sulphides, which conduct electricity very rapidly provided the mineral grains are in contact with each other.

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.

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".

Metal/Magmatic sulphide: Deposits of sulphide mineral concentrations in mafic and ultramafic rocks, derived from immiscible sulphide liquids. To view a video of how metal/magmatic sulphides form please visit -

https://twitter.com/KavangoRes/status/1316004057895645186?s=20  

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.