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Botswana focussed metals exploration company Kavango Resources plc (LSE:KAV) (“Kavango”) has successfully concluded its “Proof of Concept” exploration programme in the Kalahari Suture Zone (“KSZ”). This is the most comprehensive exploration programme ever undertaken in the KSZ and the results will guide the Company’s future commercial strategy.

Kavango is pleased to announce that the Proof of Concept exploration programme has:

§ Provided geochemical proof of magmatic Ni-Cu-PGE mineralising processes (depletion and enrichment) throughout the KSZ, for both the Karoo and Proterozoic (Tshane Complex) intrusions

§ Identified previously unrecognised PGE potential in the KSZ South

§ Introduced new ore deposit models (Norilsk, Insiswa, Eagle, Tamarack, and Uitkomst), which will allow Kavango to vector towards the right host rocks and upgrade future targeting

§ Confirmed Kavango is using appropriate geophysical technologies and data analysis techniques to isolate potential mineral bearing targets in a scalable programme

Richard Hornsey, a leading authority on nickel sulphide and platinum group element (PGE) exploration, has completed a comprehensive review of all available exploration data on the KSZ on behalf of Kavango.

Mr Hornsey has provided the Company with three detailed reports on the exploration undertaken, drill core review, intrusion lithogeochemistry, and implications for prospectivity of the KSZ, with suggestions for optimising future exploration strategy (the “Reports”). The Reports will be made available to potential Joint Venture partners and other interested parties, subject to non-disclosure agreement (“NDA”).

Highlights

In summary, the Reports detail:

§ Geochemical proof of magmatic mineralising processes (metal depletion and enrichment) throughout the entire KSZ:

§ Potential for Nickel-Copper-(Platinum Group Element) (“Ni-Cu-(PGE)”) massive sulphide associated with the Karoo Large Igneous Province (“LIP”) in the KSZ North

§ Potential for low sulphide Platinum Group Element-(Nickel-Copper) & Ni-Cu-(PGE) massive sulphide associated with the regionally extensive Proterozoic (Tshane Complex) encompassing KSZ North and KSZ South

§ Confirmation that Kavango is using appropriate geophysical exploration technologies to discover economic metal deposits should they exist within discovery range; including Controlled Source Audio Magnetotellurics (“CSAMT”) and Surface Large Loop Time Domain Electromagnetics (“TDEM”)

§ The new data has enabled assessment of potential variations of intrusion style and geochemical processes associated with the KSZ Project. Ongoing data collection will further focus model definition

§ Recommendations for improvements to Kavango’s exploration programme

Mr Hornsey has provided a detailed executive summary of his review (the “Executive Summary”), which the Company will make available on its website via the following link:

https://kavangoresources.com/media-library/technical-reports

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

“Kavango has now completed the most comprehensive and successful exploration programme ever conducted on the Kalahari Suture Zone (KSZ).

When Kavango first set out on this project it was purely conceptual in nature. Today, we have assembled a significant data set that validates the discovery potential.

This is a regionally extensive project, but thanks to Richard Hornsey’s detailed work we will be able to focus our programme. Specifically, we now have several exploration vectors to enable us sharpen future targeting.  

We are the first company to demonstrate that mineralising processes have occurred throughout the KSZ, based upon evidence of nickel, copper and PGE depletion and enrichment. This suggests there is a high likelihood that potentially economic magmatic mineralisation may exist, both within the Karoo and the Proterozoic Tshane Complex. The main questions to answer now are where and at what depth?

Encouragingly, Richard’s work confirms we are using the right remote sensing technologies (CSAMT & TDEM) to identify potentially mineralised targets. If mineralised nickel, copper and/or PGE deposits exist within range of detection and economic exploitation, we are utilising techniques that would identify them. Our objective will then be to rank any targets in order of priority and to drill them.

Meanwhile, the previously unrecognised PGE potential of the Tshane Complex is an intriguing development, especially considering regional variations in PGE endowment. This is an area Kavango will focus on in the coming months.

Our strategy in the KSZ will now involve two parallel streams of work. In the field, we will continue deploying CSAMT and TDEM surveys, while preparing to drill the B Conductors. At the corporate level, we will step up our efforts in search of potential JV partners. The technical review is a substantial piece of work that contextualises the project based upon our exploration results and enables Kavango to undertake much more informed discussions with interested parties.” 

Review of the Proof of Concept Exploration Programme

The 2021/22 exploration programme objectives (the “Proof of Concept Drill Campaign”) were to drill selected targets to provide proof of concept results in providing “hard” data to enable other work to be undertaken (geology logging, lithogeochemistry); assess the accuracy and efficacy of the geophysical strategy; and to demonstrate operational effectiveness. 

This work has been substantively completed, with the primary objectives achieved. 

This review of the Proof of Concept Drill Campaign has included:

§ Initial review of the project data, provided by Kavango, including petrography reports, drillhole data for 13 exploration boreholes in the region, including 7 drilled by the Company (2019 and 2021/22), and limited GIS information

§ A site visit to the Hukuntsi core shed over a two-day period to examine drill core from Kavango holes KSZDD001 and TR2DD002 that intersected both the Karoo sills and Tshane Complex

§ Report 1 “Kalahari Suture Zone Review” (56 pages) on the exploration setting and technical analogues, petrography, drill core review and initial observations

§ Report 2 “Lithogeochemistry Review of the Karoo and Tshane Complex” (173 pages) based upon the routine and detailed lithogeochemistry sampling dataset using ioGAS software and a dedicated proprietary template for igneous intrusion analysis

§ Report 3 “Kalahari Suture Zone Drill Sections and Spatial Dataset Interpretation” (74 pages) outlining review of the data using Micromine software to examine and describe the spatial variation and assess whether prospectivity trends are present

§ The Reports are commercial in confidence, and will be made available to potential Joint Venture partners and other interested parties, subject to NDA.

Report Highlights & Key Actions

§ Technical confirmation of major large-scale targets:

o Potential for Nickel-Copper-(Platinum Group Element) (“Ni-Cu-(PGE)”) massive sulphide associated with the Karoo Large Igneous Province (“LIP”) in the KSZ North

o Potential for low sulphide Platinum Group Element-(Nickel-Copper) & Ni-Cu-(PGE) massive sulphide associated with the regionally extensive Proterozoic (Tshane Complex) encompassing KSZ North and KSZ South

§ Lithogeochemical indications of mineralising processes (metal depletion and enrichment) throughout the entire KSZ (both Karoo and Tshane Complex)

o Future Nickel-Copper (and possible PGE) (Ni-Cu-(PGE)) exploration focus to target more primitive, non-magnetic intrusions in the Karoo and the shallower Tshane Complex in KSZ South

o Future PGE (and possible Nickel-Copper) (PGE-(Ni-Cu)) exploration focus to target Tshane Complex in KSZ South

§ All Karoo sills appear to have been emplaced under similar conditions indicating metal depletion due to sulphur saturation has occurred,  therefore ore-tenor mineralisation could exist within the system . Notable shared features of the sills include:

o Internal complexity indicates repeated periods of activation and sufficient hiatus periods that allowed the magma to lithify

o All Karoo sills are remarkably coarse-grained, suggesting emplacement closer to a source region

o All Karoo sills in KSZ North have experienced sulphur saturation and metal stripping, indicating the probability that metal-enriched intrusions exist

§ Evidence that chalcophile (e.g. Nickel-Copper-PGE) metal depletion exists in the Karoo.  The Company has identified strong conductors that require drilling:

o Kavango’s strategy of using CSAMT to identify areas within the Karoo stratigraphy that relate to larger, more primitive, non-magnetic intrusions, and  TDEM to identify conductive targets is valid

o Confirmation that drilling to date has not intersected any TDEM conductors

o Kavango has identified three very strong conductors in KSZ North, at the Great Red Spot, that are interpreted to be associated with Karoo intrusions  (>>> see announcement 11 July 2022 )

§ Based on analogous Ni-sulphide mineralised intrusions (Insiswa, Norils’k, Eagle, Tamarack, Uitkomst) it is considered that mineralisation in the Karoo may be sourced from both large and relatively thin localised intrusions:

o Kavango will consider this during anomaly targeting and discrimination

o It is highly likely there will be more than one control on mineralisation location or style in the Karoo Large Igneous Province (“LIP”)

§ It is highly likely that intermediate and ultramafic rocks exist in the Tshane Complex that may host magmatic sulphide mineralisation:

o The Tshane intrusion layering dips either to the east or west indicating that target stratigraphy may subcrop beneath the Karoo at explorable depth

o Kavango can optimise exploration of the Tshane Complex in KSZ South, where the overlying stratigraphy is significantly thinner

§ A new regional 3D Magnetic Model to map stratigraphy and structure will help target potential mineralisation

o Combined use of CSAMT and TDEM surveys for 3D mapping and direct detection is optimal exploration solution to identify potential Ni-Cu-(PGE) targets

§ Previously unrecognised PGE potential across the entire Proterozoic (Tshane Complex) system:

§ Tshane 1 (encountered in the Great Red Spot) is strongly PGE depleted, suggesting mineralisation has occurred deeper in this system

§ Tshane 2 (encountered along the 30km strike) contains low to moderate PGE, suggesting mineralisation has occurred deeper in this system

§ Tshane 3 (across KSZ South) has elevated PGE content, suggesting mineralisation could be at a higher level in the intrusion could be closer to surface

§ Tshane 1 is geochemically distinct, while Tshane 2 and Tshane 3 exhibit more similar chemistry

§ PGE exploration presents different geophysical targets, therefore- Kavango will undertake a review of exploration strategy to focus on this mineralisation style

KSZ Background

The Kalahari Suture Zone (KSZ) is located at the western margin of the Kaapvaal Craton.  This is a geologically favourable geodynamic location for mafic-ultramafic mineralisation as deep-seated structures are repeatedly activated and may enable ascent of fertile mantle derived magma to surface.  The exploration targets are for massive Ni-Cu-PGE sulphide associated with the Karoo Large Igneous Province (LIP), and/or for low-sulphide PGE or massive Ni-Cu-PGE sulphide associated with the regionally extensive Proterozoic ( Tshane Complex) that extends over a length of 650km parallel to the craton margin.

A detailed conceptual, geological, and geochemical review of the Kalahari Suture Zone (KSZ) project has been undertaken for Kavango Resources plc (“Kavango” or “the Company”).  This included a two-day core review at Hukuntsi, followed by data compilation into a standardised ioGAS template designed for mafic-ultramafic intrusions.  Three detailed reports have been provided, on the drill core, lithogeochemistry, and spatial interpretation. The reports are commercially sensitive and are not for public distribution. They may be shared with parties under non-disclosure agreement with Kavango.

Report Technical Summary

The 2021/22 exploration programme objectives (the “Proof of Concept Drill Campaign”) were to drill selected targets to provide proof of concept results in providing “hard” data to enable other work to be undertaken (geology logging, lithogeochemistry); assess the accuracy and efficacy of the geophysical strategy; and to demonstrate operational effectiveness.  This work has been substantively completed, with the main objectives achieved.  The Executive Summary focusses on the geology and lithogeochemistry, providing an interpretation of the results and recommendations for ongoing exploration.

–  The Kalahari Suture Zone (KSZ) is located at the western margin of the Kaapvaal Craton.  This is a geologically favourable geodynamic location for mafic-ultramafic mineralisation as deep-seated structures are repeatedly activated and may enable ascent of fertile mantle derived magma to surface.  The exploration targets are for massive Ni-Cu-PGE sulphide associated with the Karoo Large Igneous Province (LIP), and/or for low-sulphide PGE or massive Ni-Cu-PGE sulphide associated with the regionally extensive Tshane Complex that extends over a length of 650km parallel to the craton margin.

–  The 2021/22 exploration programme objectives were to drill selected targets to provide proof of concept results in providing “hard” data to enable other work to be undertaken (geology logging, lithogeochemistry); assess the accuracy and efficacy of the geophysical strategy; and to demonstrate operational effectiveness.  This work has been substantively completed, with the main objectives achieved.  Report 1 focusses on the geology and lithogeochemistry, providing an interpretation of the results and recommendations for ongoing exploration.

–  The Karoo sills are highly fractionated gabbros with internal variability and chilled margins indicative of repeated periods of emplacement.  Lithogeochemistry indicates the Karoo sills are high Fe tholeiitic basalt with low – intermediate TiO2 possibly derived from E-MORB mantle.  The most primitive intrusions are Karoo 4 (10.69% MgO), Karoo 5 (9.21% MgO), and KSZ Karoo 1 (8.54% MgO).

–  Cu/Pd, Cu/Zr (PM) & Pd/Yb (PM) indicate that all sampled Karoo sills were emplaced under similar conditions.  All sills have magma that has experienced sulphur saturation and metal stripping.  This is proof of process.  The Karoo sills are remarkably homogeneous in these ratios, indicating that metal accumulation occurred prior to emplacement of these metal-depleted sills.

–  The Karoo Exploration Target is conduit-hosted Ni-Cu-PGE sulphide associated with Continental Flood Basalt volcanism.  Process analogues include Norils’k-Talnakh (Siberian Traps, Russia), Eagle and Tamarack (Mid Continental Rift, USA), and Insiswa (Karoo, South Africa).  These mineralised intrusions show variations of geology, morphology, and metal content.  They are all associated with the most primitive intrusions within their respective terranes.

–  It is necessary to identify the most magnesian Karoo intrusions, or more primitive intrusive centres that have accommodated greater magma flux.  Lithogeochemistry can achieve this.  Karoo intrusions may also be present within the Proterozoic stratigraphy, particularly the layered Transvaal Supergroup, these may include the deeper-seated, more primitive components of the LIP.

–  Proterozoic age intrusion(s), collectively referred to as the Tshane Complex , form a 650 x 50km regional magnetic anomaly parallel to the Kaapvaal Craton margin.  The Tshane Complex core indicates the intrusions are lithologically similar but have different textural relationships.  The coarse grain sizes, layering, and variability are indicative of large plutonic complexes.

–  The Tshane intrusions are fractionated, magnetite-bearing gabbros with approximately double the base metal and five times the precious metal endowment of the Karoo sills.  The intrusions are high Mg and high Fe tholeiitic basalts with variable Ti content, from low Ti through intermediate then splitting into two high Ti trends.  The REE plots also split the intrusions into two distinct groups, one with more alkaline character, derived from intermediate mantle depth at the komatiite-picrite boundary, the second a komatiite derived from shallower mantle.  The REE indicate an E-MORB character, split into two groups.  This indicates a more complex process of magma generation and limited mixing and that Tshane 1 may be a different intrusion to Tshane 2 and 3 , which are more similar in their chemistry.

–  The Tshane Intrusions have variable PGE endowment, Tshane 1 is strongly PGE depleted, whereas Tshane 2 has low to moderate PGE and Tshane 3 has elevated PGE content.  The intrusion was variably sulphur saturated and depleted, indicating proof of process, and that sulphur exerted a control on metal distribution.

–  The Tshane Complex could be a large intrusion, or more likely a group of intrusions derived from complex mantle melting that has produced fertile magma with variable REE signatures.  The intrusion could host either or both of low sulphide PGE-(Ni-Cu) and Ni-Cu-(PGE)-sulphide mineralisation.

–  It is recommended that east-west cross sections should be drilled to provide a cross section through the Tshane Complex to enable mapping of chalcophile distribution, enrichment, and depletion.

–  Physical property plots of magnetic susceptibility and conductivity indicate the intrusions are magnetically susceptible, with Tshane having significantly greater intensity than the Karoo sills.  The conductivity plots show most host rocks are non-conductive apart from very thin zones within carbonaceous stratigraphy immediately adjacent to the upper and lower contacts of the Karoo sills.  This indicates that the intrusions have contact metamorphosed carbon to form graphite.  This is unlikely to impact upon exploration strategy.

–  Exploration Strategy : KSZ is an early-stage project, exploring for one of the more technically challenging styles of mineralisation.  The total coverage by younger stratigraphy adds a layer of complexity that precludes the use of first-pass regional techniques such as stream or soil geochemistry.  Geophysics is therefore the only exploration option.

–  Magnetics is an important tool for regional mapping of structure and geology and may be used to identify less fractionated parts of the intrusions that may have potential to be targets for Ni-Cu-PGE sulphide mineralisation.

–  Kavango’s targeting strategy for Karoo exploration is to use a combination of Controlled Source Audio Magnetotelluric Surface (“CSAMT”) and Time Domain Electromagnetic (“TDEM”) geophysical surveys to map subsurface geology and structure and identify discrete conductive anomalies that may relate to Ni-Cu-PGE sulphide.  Kavango employs an internally developed ranking system to prioritise potential drill targets.

–  For Tshane , geophysical methodology will also vary dependent upon the style of mineralisation being targeted.  Massive Ni-Cu-(PGE) will present a dense, conductive, magnetic target, best resolved using electromagnetic methods ( CSAMT , TDEM ).  Reef-style PGE-Cu-Ni mineralisation may be more difficult to detect geophysically, but other deep mapping techniques ( CSAMT ) could be used to map and define target intervals once the stratigraphy is understood.

Report Conclusions

The Karoo Sill project was conceptual at inception. Kavango has compiled sufficient data to enable geochemical analysis that indicates sulphur saturation has occurred. This may have accumulated potentially economic Ni-Cu-PGE sulphide mineralisation within some parts of the system.

The KSZ is a valid geodynamic setting for ascent of mantle-derived magma and there are geochemical indicators of chalcophile element depletion (process). Although it has yet to be proven that intermediate to ultramafic intrusions are present, this will be further investigated by drilling the recently identified conductors (B1, B3 & B4).

The Karoo targeting strategy incorporates that the most prospective parts of the system are likely to be non-magnetic; whereas the most magnetic sills are likely to be fractionated and therefore have lower discovery potential.  Therefore, CSAMT followed up by TDEM may be able to resolve areas within the Karoo stratigraphy that are related to larger, more primitive, non-magnetic intrusions.

Contact metamorphism of carbonaceous stratigraphy has been observed in drill core to upgrade carbon to moderately conductive graphite.  Although the observed conductivities are too low to explain modelled TDEM conductors, target discrimination should consider potential for non-sulphide conductors.

The Tshane Complex is a very large, complex intrusion or set of intrusions that share some lithogeochemical parameters, but are lithogeochemically variable, derived from complex mantle melting.  Some drillholes indicate sulphur saturation and removal of base metals and the PGE, indicating that these metals have been concentrated elsewhere in the system. Individual sub-intrusions may have experienced different evolution and therefore more direct data (drill intersections) are required to unravel the puzzle.  The intrusions may be very thick, but core angles indicate they are moderately dipping, therefore stepping to east or west may enable drilling different stratigraphic sections and vector towards the base of the intrusion.  Future drilling should provide oriented drill core.

It is concluded for the Tshane Complex that there is potential for both low-sulphide PGE-(Ni-Cu) reef and Ni-Cu-(PGE) mineralisation associated with basal ultramafic rocks.  These contrasting styles of mineralisation present different geophysical targets, (IP and TDEM).  It is necessary to map stratigraphy using CSAMT and regional drilling.  This programme would be optimised in the south of the project, where the overlying stratigraphy is significantly thinner.  This should consist of east-west sections to provide information on the full stratigraphy and lithogeochemistry of the Tshane Complex, which would define ongoing strategy.

The discovery potential of this project has been advanced by the 2021/22 programme, but it is important to revisit the exploration model(s) and implement the technical recommendations made in this report.  The Karoo project is considered more challenging because no potential host intrusion has yet been identified, although evidence of chalcophile metal depletion exists and strong conductors have been identified that require drilling.  The Tshane Complex has all the indications of being another large, geochemically complex Proterozoic intrusion into the Kaapvaal craton that has chalcophile element accumulation and depletion.  Tshane is considered to have the lowest technical risk but is likely to require deeper drilling, dependent upon the intrusion orientation, and whether the deeper northern section or shallower south section is targeted.

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