Kavango Resources (LON:KAV) ZIM: Prospect 3 Positive Assay Results

Kavango Resources plc (LSE: KAV), the Southern Africa focussed metals exploration and gold production company, is pleased to report encouraging assay results from its recently completed preliminary resource drilling at Prospect 3 (“Prospect 3”) on the Hillside Gold Project (“Hillside”) in Matabeleland, southern Zimbabwe.

Drilling intercepted higher than expected gold grades, within 6 defined mineralised shear zones that appear to increase in grade at depth. These results suggest Prospect 3 has the potential for near-term, shallow open-pit mining of selected mineralised zones, followed by a progression to underground mechanised mining.

The shallow drilling programme successfully provided Kavango with sufficient geological information and positive assay results to begin its first direct resource definition. The Company is also finalising details for a follow-up drill programme to further test gold mineralisation open at depth and along strike at Prospect 3, with an announcement to follow in due course.

Highlights

·      6 mineralised gold bearing shear zones confirmed across 34 shallow diamond drill holes at Prospect 3.

o  Each hole was drilled to a depth between 60m and 105m, for a total of 2,109.16m, covering a 100m x 150m grid, with a 25m x 25m spacing between hole collars:

o  The drill defined gold bearing shear zones lie within a larger block that corresponds with mapped areas of artisanal workings, suggesting Prospect 3 covers an area of at least 650m x 150m that is open at strike in both directions.

o  Shallow, higher-grade gold intercepts extend to and are open at depth in the 6 mineralised shear zones.

o  Assay results and core logging show that the most consistent higher-grade and wider, discrete mineralised shear zones are concentrated within the granodiorite.

·      65 significant gold intersections, grading at >1g/t Au, transected across the 6 confirmed mineralised shear zones. Highlights include:

o  0.90m @ 18.11g/t Au from surface in Hole NSDDIR009

o  8.32m @ 1.07g/t Au from 57.5m in Hole NSDDIR012

o  0.60m @ 7.82g/t Au from 52.40m and 0.87m @ 5.58g/t Au from 56.83m in Hole NSDDIR015

o  1.98m @ 1.45g/t Au from 58.34m, in hole NSDDIR016 that ended in mineralisation

o  1.70m @ 7.10g/t Au from 29.00m and 3.18m @ 2.23g/t Au from 43.00m in Hole NSDDIR018

o  7.79m @ 1.35g/t Au from 29.11m in Hole NSDDIR025:

·      Results suggest Prospect 3 is similar in structure to gold ore bodies in Western Australia that are mined using modern mechanised methods through spiral decline mining (explanation given below).

o  To confirm the potential for underground mechanised mining at Prospect 3, Kavango has designed a new diamond drilling program (2,750m) to test grade continuity and structure along strike and to depths of ~200m.

o  In addition, third-party consultants have commenced extensive structural surveys at Hillside, comprising of field mapping and detailed analysis of orientated diamond drill cores.

Ben Turney, Chief Executive of Kavango Resources, commented:

“We are delighted with the drill results at Prospect 3. The higher-than-expected gold grades, in 6 defined mineralised shear zones, present Kavango with a much bigger opportunity than was originally envisaged.

Drill results from the 34 shallow diamond holes support the presence of a robust and potentially economic mineralised system at Prospect 3. The correlation of high-grade intercepts with mapped artisanal workings, combined with structural continuity across multiple zones, raise the possibility for selective, near-term open pit mining followed by underground mechanised mining.

Prospect 3 has been mined by artisanal miners over the last 20 years. This has proven to be a strong exploration lead for our team. The artisanal miners appear only to have mined up to a depth of 25m from surface. The higher-grade, gold mineralised underlying hard rock is relatively untouched.

The drill results from the recently completed program show that the near-surface structures the artisanal miners have mined appear to both continue at depth and increase in grade within the deeper fresh hard rock granodiorite. This is encouraging for Kavango because it suggests that the target area is at least 150m wide and greater than 650m long, and remains open along strike in both directions, and open at depth.

Our planned next phase of drilling will further test the strike and depth extent of this mineralised system. If results confirm and potentially extend the footprint and grades of Prospect 3, then Kavango will have made a significant gold discovery.”

District Geological and Structural Context

The local geology of the area around Prospect 3 is characterised by a phyllite intercalated with magnetite-rich iron formations (“BIF”), which is intruded by a diorite-granodiorite. Both units are intruded by a megacrystic granite. Gold mineralisation appears to be controlled by steeply NNE-dipping m-thick, subparallel and anastomosing shear zones. The gold mineralisation is believed to be hosted in mm-cm-thick shear foliation-parallel smoky quartz veins, and the timing of gold deposition is believed to broadly synchronise with the main shearing event.

Deposit Geology and Controls on Mineralisation:

The completed drill program consisted of 34 diamond drill holes contained within a 100m x 150m block and successfully confirmed multiple shallow gold mineralised zones that extend to depth, and that correlate with surface artisanal workings.

Figure 1: Map of Prospect 3 showing artisanal surface workings associated with interpreted structural features. Logged downhole geology for the completed boreholes is also shown along the borehole trace. The yellow highlighted areas outline the interpreted trace of the 6 main mineralised gold bearing shear zones, which remain open to the NW and SE.

Surface mapping of areas historically worked and depleted by artisanal miners suggests there are as many as 12 mineralised shear zones at the NW end of Prospect 3. The shear zones anastomose and coalesce into 6 main gold bearing shear zones at the SE end (where drilling was focussed). All shear zones have been assessed to have the potential to host gold mineralisation at depth.

The gold mineralisation appears to occur in two main areas: firstly, in m-thick anastomosing shear zones hosted in the diorite-granodiorite. The geotechnical core logging from this lithology reveals it to be both hard and competent, characteristics well suited for the proposed mechanised underground mining method; and secondly, along the contact zone between the metasedimentary rocks (more friable and generally oxidised material near surface) to the south and diorite-granodiorite to the north, Figure 1. Gold mineralisation in the metasediments are generally lower-grade, narrower, and more finely disseminated across fine fractures.

Collectively the results from the drill program demonstrate the anastomosing nature of the higher-grade mineralised shears, with zones of >1g/t Au to 18g/t Au occurring over 1m, and up to 8m in width.

Within the shear zones, the gold mineralisation appears to occur in cm-thick smoky quartz veins (and their alteration halos), which rarely exceed 0.5 m in thickness. The veins are parallel to a mylonitic foliation in the host shear zones. Most of the observed veins rarely exceed 10 cm in thickness. Commonly observed sulphides are pyrite, chalcopyrite and occasionally pyrrhotite. The sulphides observed are generally coarse-grained and more abundant in the vein margins and immediate host rock compared to vein interiors. Sulphides also appear to follow foliation planes in the sheared diorite.

The contact zone between the diorite-granodiorite and metasedimentary rocks to the south is only observed to be mineralised where it is in the immediate vicinity of shear zones in the diorite, which appear to be the main channel sources for mineralising fluids. Further away from the shear zones, the contact zone does not appear to be mineralised. The Prospect 3 shear zones presumably form part of the regional NW-SE trending dextral Redwing shear zone.

The following photographs from drill core at Prospect 3 show two of the different styles of veining from narrow veins within granodiorite (Figure 2) to wider silicified zones within the diorite (Figure 3).

Figure 2: Close up photograph of cut core from borehole NSDDIR018 showing sections of core between 26.33m and 34.70m (above) with 1m @ 11.32g/t Au

 Figure 3:  Close up photograph of core from borehole NSDDIR015 showing sections of core between 52.44m and 60.08m 2 reefs intersected. The upper reef 0.60m @ 7.82g/t Au and the lower reef 0.87m @ 5.58g/t Au. The gold bearing quartz veins are sub-parallel to fabric in granodiorite.

Figure 4 below, shows a cross-section that includes both photographed intersections shown above, while Figure 5 is an oblique view of Prospect 3, showing lithology, interpreted structures, artisanal workings and assay grades on borehole traces.

Figure 4:  Cross-section looking NW through Section Line 3 at Prospect 3 showing significant intersections.

Figure 5: Oblique view of Prospect 3 looking NW and showing surficial geology, interpreted structural features, artisanal workings and diamond drill hole traces with gold grades down hole plotted as histogram (red) and scale bar for 5 g/t Au. The inset 3D schematic is a visual representation of Prospect 3 geological setting prepared by a PhD structural candidate working on the Hillside area.

Two structural specialists from Murgana Geological Consulting Ltd. are currently on site at Hillside carrying out detailed structural work to identify the various vein sets present and their relationship to the numerous shear zones, “reefs”, faults and mineralisation intersected in the artisanal workings, and Kavango’s drill holes.

The surveyed collar locations and drill hole data are tabulated in the attached JORC table while a complete list of significant intercepts using a 0.7g/t Au cut-off are presented in Table 1, below.

Table 1: :  Table of significant intercepts using a 0.7g/t Au cut-off.

~Drill collars were surveyed by DGPS

#Drill hole NSDDIR006 was not drilled due to the proximity of artisanal surface workings and drill hole NSDDIR005 was extended to compensate.

*NSDDIR013 was stopped due to intersecting voids and broken ground thought to be back filled artisanal workings and NSDDIR012 was extended to compensate. All the other holes were successfully completed.

The Company is awaiting the completion of ongoing metallurgical test work and has submitted all geological data and assays for modelling to produce an initial maiden resource. If warranted, further work will include the design of a mining and processing plan.

New Phase of Drilling Planned

Following the success of the definition drilling over block 1, Kavango is initiating a new drilling program, designed to delineate mineralisation from northwest to southeast across the granodiorite contact, down to a vertical depth of 200m. The first phase of this programme will comprise diamond drilling and if warranted a second phase of Reverse Circulation (“RC”) drilling.

Next Steps

·      Community engagement is underway to ensure safe access to artisanal areas prior to drilling.

·      Site preparations, including drill pad and access road work, are being completed

Further updates will be provided as the project progresses.

Spiral Decline Mining

The goldfields of the Yilgarn craton in Western Australia share many similarities in terms of the host rocks, orebody styles, and reef grades with the greenstone belts in Zimbabwe.

Like Zimbabwe, Australia has a long history of small-scale shaft and handheld mining that occurred during the various gold rushes of the late 1800s and throughout the 1900s. These artisanal style mines were similar in many ways to current operations in Zimbabwe, targeting near surface high-grade narrow reefs, often hosted in shears or faults or on lithological boundaries within various rock units contained within the greenstone belts.

As these high-grade near surface orebodies were depleted and the remaining orebodies became deeper and lower grade, there were many technological advancements, innovations, and mining process improvements in Australia. These occurred from the 1970s onwards to make mining operations safer, cheaper (capital and operating), and more productive so lower-grade, thinner orebodies could be mined profitably.

This evolution in mining was marked by the shift from shaft access to spiral decline tunnel access. Spiral decline mines are characterised by corkscrew tunnels that are bored into the Earth’s crust. Tunnels along the ore reefs are driven horizontally, which are then subsequently mined vertically stoping out the orebody. Ore is extracted from the stopes using specialised remote operated loaders and is then placed into stockpiles. Up to 60-tonne trucks are then used to haul the stockpiled ore to the surface via the spiral decline. Thanks to the development of mechanised stoping techniques, such as sub-level long hole open stoping, spiral decline mines in Australia are able to produce up to 10 times the volume of ore per day as mines that traditionally used shafts as the only means to both access and extract the orebody.

Figure 6: Illustrative design of an idealised spiral decline mining operation.

While mechanised stoping techniques are highly productive and cost efficient, handheld (airleg) mining still has a place in modern mining as it is useful to mine very narrow orebodies that have large dip variations and dip inflections over short distances. In some cases, these techniques are used to mine flat dipping narrow orebodies (less than 40 degrees), where the ore does not freely rill to the extraction level via gravity.

Handheld mining, however, is much less prevalent than what it was in the past and mechanised stoping methods have become prevalent due to their higher inherent safety, productivity, and lower operating costs.

The majority (>90%) of narrow vein underground mines in Australia operate with mechanised stoping methods only, although some may use airleg stoping in certain cases. The mine design and layouts, accuracy of the long-hole drilling, and the long-hole charging and firing techniques have been improved and refined over many decades to the point now that stopes can be consistently mined to 1m true width or less (down to 0.8m). Examples of mechanised open stope operations that have been successfully mined for many years to narrow widths in Western Australia include, but are not limited to, Jundee, Plutonic, Scotia, OK and First Hit.

Kavango’s Operations in Zimbabwe

Kavango is exploring for gold deposits in Zimbabwe that have the potential to be developed into commercial scale production quickly through modern mechanised mining and processing. The Company is targeting both open-pit and underground opportunities.

Kavango has two projects on the Filabusi greenstone belt, Hillside and Nara.

Kavango exercised its option to acquire Hillside in April 2024. Here, the Company has two high priority targets it aims to bring into production over the next 18 months: Prospect 3 and Prospect 4. At Prospect 3, Kavango is investigating the potential for a selective open-pit mining operation, followed by underground mechanised mining. Meanwhile, at Prospect 4 Kavango is pursuing a high-grade mechanised underground mining opportunity.

In parallel to this, Kavango holds an option to acquire the Nara Project that has an exercise date towards the end of June 2025. Here, the Company is exploring for a large-scale, mechanisable underground deposit. The primary target zone is around the historic N1 mine, where the Company is assessing the potential to expand artisanal workings both at depth and along strike.

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

+46 7697 406 06