COO operational update to shareholders
Updated : 07:00
PRESS RELEASE
08 April 2022
KAVANGO RESOURCES PLC (LSE:KAV)
("Kavango" or "the Company")
COO operational update to shareholders
Kavango's Chief Operating Officer, Brett Grist, has recently returned from Botswana, where he conducted an extensive review of the Company's operations. Kavango presents Brett's operational review for shareholders below.
Brett Grist, Chief Operating Officer of Kavango Resources, comments:
"I have worked around the world in mineral exploration and mining project development, including in West Africa and DRC. Botswana is, in my opinion, a pleasure to work in and a very favourable mining jurisdiction within which to operate. This is confirmed by its global ranking of 11th in the 2020 Fraser Institute Investment Attractiveness Index, ahead of Ireland and Queensland.
I am particularly encouraged by the exploration potential across Kavango's large portfolio of projects. Botswana benefits from a skilled workforce, excellent road network, and a government that pro-actively supports mining. It has favourable geology for discoveries, as reflected in some of the recent high-grade copper discoveries now being operated in the Kalahari Copper Belt by companies such as Sandfire Resources.
Now that I have spent time in-country, I have seen first-hand how Kavango has developed as a company over the last year. We now have a very strong team. The quality and volume of our work is notable for an exploration firm of our size. Our people are delivering a lot in the field, and I expect results to start flowing in the not-too-distant future.
I look forward to working with everyone in Kavango, both in Botswana and the UK, as we move towards making a discovery in such a highly rated investment destination."
COO Operational Report for Shareholders
Dear Shareholders,
The team that Ben and Hillary have assembled over the last 12 months is impressive and committed to Kavango. I had a highly productive time in Botswana and have prepared an initial note on our current project status.
Kalahari Suture Zone ("KSZ")
The KSZ is our largest and most exciting project. In 2021 Kavango embarked on an extremely ambitious drill campaign for a company of our size. The primary objective of this campaign was "Proof of Concept", which can be broken down into four individual goals:
1. To retrieve drill core from Kavango's key targets, gathering physical geological evidence (core)
2. To test the accuracy of Kavango's geophysical models
3. To validate Kavango's selected geophysical surveying techniques
4. To prove that Kavango can successfully deliver its integrated exploration and drilling strategy on a larger scale
Kavango has already reported some key facts, which are worth repeating:
- In Holes TA2DD002 and KSZDD001, Kavango's magnetic model of the Proterozoic age gabbros proved to be remarkably accurate. We intercepted these gabbros within metres of where the magnetic models predicted (at 651m and 950m respectively). This is an exceptional achievement. Magnetic modelling will likely become one of our most important exploration vectors for the KSZ moving forward. The value of a twice drill-validated geophysical "map" of the KSZ North area is not to be underestimated.
- Our drilling partner Mindea Exploration and Drilling Pty ("Mindea") has proven to be a very solid partner. Thanks to their work, Kavango became the first exploration company to successfully drill four consecutive deep boreholes into the KSZ, with each being taken past the planned depth. In total Kavango drilled 3,230m of diamond core drilling, with 99% core recovery. This gives us a great deal of confidence in Mindea's ability to support future drilling.
- The surface Time Domain Electromagnetic ("TDEM") and Downhole Electromagnetic ("DHEM") data that our geophysics partner Spectral Geophysics Pty ("Spectral") has gathered for us has proved to be high-quality. All data from Spectral has been independently verified for its accuracy and the correct use of equipment in the field. We are extremely fortunate to be working with Cas Lotter and his team.
Kalahari Copper Belt ("KCB")
The Kalahari Copper Belt has seen multiple recent discoveries developed into mines, meaning that this is an excellent destination to be exploring within. The style of mineralisation means that these are often relatively high-grade deposits. While successful exploration on the KSZ offers potential for a historic achievement, the KCB in Kavango's view offers potential to make an earlier discovery.
- Kavango has interests in 12 prospecting licences, totalling over 5,000km2 in the KCB. Kavango's interests are shared with Power Metal Resources (LSE:POW), in a co-owned Joint Venture called Kanye Resources (10 licences), and with LVR Geoexplorers (2 licences). This is a competitively significant mineral rights position, in an under-explored area of the KCB.
- A work programme is underway on multiple licences, including the recently acquired Mamuno licences, which are adjacent to the Namibian border and on which little work has previously been carried out. The Mamuno licences are held within Kanye Resources. The KCB work consists of geological mapping and extensive soil sampling (subject to progress this could consist of up to 8,800 samples).
- This, in combination with the soil sampling and geophysical data that Kavango already hold, will be used to tightly define and rank specific drill targets. Subject to successful results, then a subsequent drill programme consisting of fences of (probably RC in the first instance) drillholes may be used to test anomalies and locate/validate mineralisation. If results are positive this would then be followed up by diamond drilling to determine structure and potentially home-in on the focus of mineralisation.
Ditau Camp Project
At Ditau Kavango is exploring multiple geophysical targets in an aggressive programme aimed at delivering rapid outcomes. This work is led by combining geophysics with geological knowledge to try to fingerprint targets including carbonatites, which are known to occur in the region. Kavango mobilised the diamond drill rig straight from the recent drill campaign in the KSZ to Ditau. This reflects the Company's commitment to accelerating exploration across its project portfolio.
- Kavango, through subsidiary Kanye Resources, is planning to diamond-drill up to six holes into up to three targets on licence PL010/2019 at Ditau, which is held in the Kanye Resources joint venture.
- These holes are expected to be around 400m deep. All holes will be diamond cored. We plan to undertake core orientation and are giving consideration to wireline logging in order to maximise information/data from the drilling.
- The primary target style is carbonatites, however other mineralisation styles may also be intersected, and so flexibility has been designed into this programme.
- Progress is already good; the drillers, Mindea, have established a camp and mobilised the majority of equipment. Water supply is key to drilling in a desert; Kavango have redrilled an old water well, and have newly installed a solar-powered water pump, ensuring that a long-term sustainable solution is left for other local water users.
- A further update will be provided once drilling commences.
General
Botswana is the highest ranked country in Africa in the 2020 Fraser Institute Investment Attractiveness Index. It is recognised by Transparency International (2016) as one of the most business-friendly countries in Africa. It is one of the fastest growing economies in the world and has one of the highest incomes per capita in Africa. It has good infrastructure, with an extensive road network covering over 18,000km. It benefits from a skilled and typically keen workforce in the mining sector. As well as meeting all our operational team and partners, I also met with:
- The Department of Mines and with the Ministry of Mineral Resources. Both reiterated how keen they are to support Kavango and all other companies in operating responsibly in the mining and mineral exploration sector.
- The University of Botswana, whom we will be working with going forwards. As a first step Kavango has agreed to host students for study placements.
Now that I have returned to the UK, with a deeper understanding of our operational capabilities and technical details of our projects, I am looking forward to developing a much more comprehensive exploration strategy for the Company. Kavango has a great deal of potential, which we now need to realise. We have an exceptionally large portfolio of highly prospective projects and, more importantly, the people who can deliver success.
I am extremely happy to have taken on the role of COO with Kavango and will do all I can to help us deliver substantial success for our shareholders.
Brett Grist (COO, Kavango Resources Plc)
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
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 16 prospecting licences covering 8,831.1km2 of ground, including 14 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.
THE DITAU CAMP PROJECT
The Ditau Camp Project comprises two prospecting licences ("PLs") (PL169/2012 & PL010/2019) that cover an area of 1,386km2. Geophysical and geochemical analyses by Kavango in the two PLs have identified 12 "geophysical structures" of which 9 have clear indications of being "ring structures".
The "ring structures" have the potential to host carbonatite and other intrusive rocks.
Carbonatites are the principal source of rare earth elements (REEs) including the much sought-after elements Neodymium (Nd) and Praseodymium (Pr), which are used in the manufacture of the new generation of electric vehicles (EVs), magnets and other high-tech applications. Other elements/minerals associated with carbonatites include Niobium, Phosphates, Monazite, Strontium, Magnetite and Copper.
Meanwhile, mafic intrusives have potential to host base and precious metals, as seen in the Molopo Farms Project, Selebi Phikwe and Tati Nickel deposits in Botswana.
KAVANGO'S INTERESTS IN THE KALAHARI COPPER BELT
Kavango's exploration licenses in the KCB include:
Kanye Resources
Ø 50% working interests in 10 prospecting licenses held in a Joint Venture with Power Metal Resources (LSE:POW), which cover 4,257km2.
The LVR Project
Ø Earning in a 90% interest in prospecting licenses PL082/2018 & PL 083/2018, held in a Joint Venture with LVR GeoExplorers (Pty) Ltd ("LVR"), which cover 1,091km2.
THE SOUTH GHANZI PROJECT GEOLOGICAL SETTING
The South Ghanzi Project and LVR Project areas include lengthy redox boundaries, close to surface, that represent excellent exploration targets.
The redox boundaries were formed several hundred million years ago in active sedimentary basins flooded by shallow seas. Organic matter accumulating on the sea floor created anoxic conditions, which formed a chemical barrier to metal ions rising upwards through the sediments as the basin subsided. The change in chemistry caused the precipitation of metal species (carbonates, sulphides etc.) including copper and silver on or just below the redox boundary.
Subsequent tectonic activity folded the sedimentary layers, which was often accompanied by the concentration of metals into the fold hinges and shear zones. Fold hinges pointing upwards are known as anticlines, while the downward pointing hinges are called synclines.
Several large copper/silver ore deposits have been discovered on the KCB in association with anticlines in areas now held under licence by Sandfire Resources (ASX:SFR) and Cupric Canyon (a privately owned mining development company). These deposits are relatively close to surface and many are amenable to open pit mining operations.
Accumulations of metals can be traced along the strike of geochemical reduction-oxidation ("redox") boundaries (sometimes for many kilometres) because they often contain iron and have a higher magnetic signature than the surrounding rock.
SOUTH GHANZI EXPLORATION STRATEGY
The South Ghanzi PLs lie within the Central Structural Corridor of the KCB immediately south of the town of Ghanzi.
Sedimentary horizons hosting copper/silver mineralisation in the KCB are known to be conductive. AEM surveys are a recognised and tested exploration method for identifying high priority drill targets.
Kavango's strategy in the KCB is to identify conductive targets and then to complete follow up investigation, using other proven exploration methods including geological mapping and testing of soil geochemistry through extensive sampling. The correlation of positive zinc and copper soil geochemistry readings to positive AEM results is a highly encouraging exploration vector.
Given Kavango's understanding of the regional lithology and stratigraphy of the KCB, the Company is optimistic about the progress it has made in South Ghanzi over recent months.
Specifically, the identification of a number of smaller anticlines associated with conductors suggests there are seven large, promising drill targets at South Ghanzi.
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