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Kavango Resources (KAV)

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Thursday 10 June, 2021

Kavango Resources

KSZ Hukuntsi - Drilling to commence in June

RNS Number : 4047B
Kavango Resources PLC
10 June 2021
 

PRESS RELEASE

 

10 June 2021

KAVANGO RESOURCES PLC

("Kavango" or "the Company")

KSZ Hukuntsi -Drilling to commence in June

Kavango Resources plc (LSE:KAV), the exploration company targeting the discovery of world-class mineral deposits in Botswana, is pleased to announce drilling will commence on two "proof of concept" geological holes in the northern (Hukuntsi) section of the Kalahari Suture Zone ("KSZ") in June.

Kavango's primary objective is to become the first company ever to retrieve drill core from the bottom of the "keels" of the Karoo-age gabbros in the KSZ. The Company anticipates that drill-core from these holes will provide firm physical evidence of the KSZ's potential to host 'Norilsk-style' metal sulphide deposits.

To this end, Kavango has awarded a contract to Mindea Exploration and Drilling Services (Pty) ("Mindea"), a company operated under the Botswana Citizen Economic Empowerment Policy, to design, engineer and drill a minimum of two 500m boreholes (the "Drill Contract"). Drilling is planned to commence by no later than 30 June 2021.

Mindea has agreed to accept payment for the Drill Contract half in cash and half in Kavango stock (at an issue price of 4.53p per share).

Highlights

v Drill contract key terms:

Mindea to drill a minimum of two 500m "geological" diamond holes at Hukuntsi

Cost per metre calculated on possible depth per hole of 800m

Mindea to design and engineer all bore holes

All bore-holes to be cased from surface into the gabbro intrusive to allow for extensive testing and geophysical surveying

Bore-holes will be oriented -80° from the horizontal

Core samples (HQ and NQ size) to be recovered for geological logging, whole rock geochemistry and assaying.

Key safety protocols and COVID-security processes agreed

Mindea to accept over half its fee in equity in Kavango, to be paid through the issue of shares in the Company at an agreed price of 4.53p per share

v Drill targets:

Final drill collar locations to be confirmed later this month

A minimum of one hole to be drilled into Target A2 (announced on 20 April 2020)

Analysis of other potential drill targets ongoing, with results expected shortly

v Planned testing programme on all boreholes:

Downhole electromagnetic ("EM") surveys to be performed by Spectral Geophysics, with an anticipated search radius of 300m-400m from the drill string

XRF testing of sand cores to be completed by Kavango's exploration team.

Core for assay and petrological work will be split by Kavango staff in Hukuntsi

Whole rock geochemistry and assay testing of core samples to be completed at the SGS laboratory in South Africa

Additional analysis of geochemistry and petrological/mineralogical studies to be performed in the UK by academic consultants.

v Site preparation:

Site visits completed, camp location agreed and two water sources identified

The Company has engaged with the local community to secure its support

Drill rig mobilisation expected within the next week

v Ongoing discussions with Equity Drilling Ltd (a 49% shareholder in Mindea) concerning a future potential strategic partnership

v Budget in place for more extensive drilling campaign later in 2021

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

"The Kalahari Suture Zone was first identified 45 years ago. The technical challenges of pursuing exploration under 70m of Kalahari sands and sediments proved too much for previous companies that attempted to unlock this region's significant potential.

Through the deployment of modern remote sensing technologies, sophisticated data analysis and persistent hard work, Kavango now aims to become the first company to retrieve drill core samples from the bottom of the "keels" of the Karoo-age gabbros here.

If we are successful this will be a major achievement for the Company. 

We believe core samples from the bottom of the gabbroic "keels" could provide us with the definitive proof we have been looking for that the KSZ could host one or more major deposits of nickel, copper and platinum group metals.

I am particularly delighted to be working with Mindea Exploration and Drilling Services on such an important project. Mindea is a well-established national drilling contractor in Botswana, having worked for Debswana and DeBeers. Equity Drilling, one of Mindea's largest shareholders, also operates a highly regarded drill school in Gaborone, the first of its kind in Africa.

Kavango is committed to investing heavily in Botswana. Working with such reliable local partners as Mindea and Equity Drilling is integral to our ambitious growth strategy.

The fact that Mindea has agreed to receive over half of its fees in equity suggests considerable faith in the potential of the KSZ to host metal sulphide ore bodies and a great endorsement of Kavango's exploration approach. For a minimal cash outlay, we can make significant advances with the KSZ Project, while keeping a budget in reserve for a more extensive drill campaign later this year."

Background

Over the last three years, Kavango has conducted extensive geophysical surveys over Karoo-age gabbros at Hukuntsi using airborne and ground-based based technology. In 2019 Kavango completed a successful orientation drill programme, data from which helped augment the Company's extensive 3D Magnetic Model of the region's subsurface geology (announced 8 September 2020).

On 30 November 2020 Kavango released results from its analysis of the 3D Magnetic Model, which revealed close similarities between the gabbroic rock formations in the KSZ and those at the Norilsk mining centre, in northern Russia.

In December that year, the Company initiated the first ground-based Time Domain Electromagnetic (TDEM) survey of the KSZ. This was the first time this powerful remote sensing technology had been used on the KSZ.

On 20 April 2021 and 5 May 2021, Kavango released details of the results from the second TDEM survey, which defined Target A2.

Links to the relevant announcements are provided below:

Ø 08 September 2020 - https://www.investegate.co.uk/kavango-resources--kav-/rns/3d-model-confirms-ksz-norilsk-rock-formations/202009080700072794Y/

Ø 30 November 2020 - https://www.investegate.co.uk/kavango-resources--kav-/rns/4-norilsk-style-target-areas-selected-in-the-ksz/202011300700068179G/

Ø 20 April 2021 - https://www.investegate.co.uk/kavango-resources--kav-/rns/ksz-hukuntsi---tdem-conductor-identified/202104200700039575V/

Ø 05 May 2021 - https://www.investegate.co.uk/kavango-resources--kav-/rns/ksz-tdem-update-and-warrant-exercise/202105051000016206X/

The Company now proposes to drill at least one 500m borehole into Target A2, with a second hole also planned in the area. Final confirmation of specific drill collar locations will be confirmed in the coming weeks.

About Mindea

Mindea Exploration and Drilling Services (Pty) LTD was formed in September 2019 by Equity Drilling Limited and Maureen Mokgaotsane (Geologist), Sebanka Lobatlamang (Geologist) and Eddie Babuseng (Attorney at Law) to provide complete exploration solutions to its clients in Botswana.

Mindea is currently operated under the Botswana Citizen Economic Empowerment Policy and is owned 51% by local shareholders and 49% by Equity Drilling. Over the coming years it is expected that Botswana nationals will wholly own Mindea, with Equity Drilling continuing to provide strategic and technical support.

Mindea operates to strict international safety standards and deploys the latest equipment to its projects. Mindea is rigorous in its planning and site preparation.

Reflecting the quality of its operations, Mindea has recently been awarded a 3-year contract by Debswana to drill various national projects in Botswana. In addition to this, Mindea is a regular drill contractor for DeBeers.

About Equity Drilling

The owners of Equity Drilling are extremely experienced drill operators, with extensive experience of successfully working on technically challenging projects across Africa.

Equity Drilling established Africa's first Drilling School in Botswana, the Africa Mining and Drilling Institute ("AMDI ")

AMDI is Botswana Qualifications Authority (BQA) certified, which offers internationally recognised certification to all students wishing to be taught exploration drilling. AMDI has an exclusive working relationship agreement in place with the Australian Drilling Industry Association (the "ADIA") and offer the ADIA's DICAT curriculum with a strong emphasis on safety in the workplace.

AMDI also offers funds the delivery of pre-industry courses to students from local communities, who have had no previous work experience. This course prepares students for the work place and making them eligible for placement into the industry on graduation. Mindea's own labour resources have been drawn from these pre-industry course graduates

About Target A2

Kavango estimates Target A2's properties are:

1km length, which is open along strike

Extends between 250m to 700m below surface and is gently dipping

Decay constant of approximately 340msec and conductance of approximately 3000 Siemens, readings which Kavango management considers are consistent with nickel sulphide deposits elsewhere in the world

Located in the right geological setting, at the bottom of a "keel" in the gabbroic intrusion, according to the Company's Magnetic 3D-Model (8 September 2020)

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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

[email protected]

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 information in this press release that relates to "geological and/or geophysical results" for the LVR Project is based on information compiled or reviewed by Mr Mike Moles BSc (Geology) & BSocSci (African Studies), a competent person who is a Member of the Australian Institute of Mining & Metallurgy. Mr Moles has sufficient experience that is relevant to the style of mineralisation and type of deposits under consideration and to the activity, which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Moles consents to the inclusion in this release of the exploration results for the Project in the form and context in which it appears. Mr Moles is a beneficial shareholder of Kavango Resources plc.

 

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

EM Super 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.

 

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