ZIM – Drilling New Underground Targets at Nara

20 November 2024

Kavango Resources

("Kavango" or "the Company")

ZIM - Drilling New Underground Targets at Nara

Kavango Resources plc (LSE:KAV), the Southern Africa focussed metals exploration company, is pleased to announce a new phase of drilling at its Nara gold exploration project ("Nara") in Matabeleland, southern Zimbabwe.

Kavango's objective is to test significant, previously unrecognised underground potential at Nara for laterally extensive gold mineralisation across multiple mineralised shears ("reefs").

Following a review of historic and recent exploration data compiled from Nara, Kavango's exploration team identified a new opportunity for the Company to pursue. The Nara project area contains several historic mines, including N1 which is reported to have produced 72,468 ounces ("oz") of gold at an average grade of 10 grams a ton ("g/t) and N2 which is reported to have produced 18,165 oz of gold at an average grade of 8.9g/t between 1904 and 1964.

Kavango's immediate exploration focus on Nara is the N1 mine. N1 is currently being mined to 4-level by artisanal miners who are contracted to the current owner of Nara. Development levels 5 and 6 have flooded, which the Company believes has protected the remaining underground ore body from the artisanal miners.

Kavango holds an option to acquire Nara until June 2025 (announced >>> 26 June 2023).

In June 2024, Kavango drilled exploration hole NAKLDD001 underneath the main shaft and development levels at N1. This hole transected several mineralised shears or "reefs" hosting gold in quartz and quartz-carbonate veins, both close to surface and at depth (announced >>> 13 August 2024). Highlights included:

·    2.1m @ 1.54 g/t, from 54.9m to 57.0m

·    1m @ 1.88 g/t, from 235.5m to 236.5m

·    0.5m @ 7.0 g/t, from 237m to 237.5m

·    1m @ 3.78 g/t, from 241m to 242m

Subsequent to this, Kavango digitised old mine plans and development sections of the historic workings at N1. Comparing the digitised plans and sections with the results of NAKLDD001, the Company believes the higher-grade mineralisation intersected from 235.5m to 242m coincides with the down dip extension of the N1 Main Reef, which was never developed or mined.

Figure 1: Oblique view of the digitized underground development at N1 with the borehole trace for NAKLDD001 marked, the histograms in red down the borehole trace represent the gold intersections.

Ben Turney, Chief Executive of Kavango Resources, commented:

"Now that we understand more about the geological structures at Nara, we are pursuing the new underground potential energetically. We mobilised our drill rig to the project quickly and are testing the potential for a large-scale underground gold mine.

We targeted the ore body underneath the N1 historic mine in the first phase of drilling. On completion of the digitised wireframe model, we appreciated the significance of the drill results from Hole NAKLDD001. The high-grade gold intercepts between 235.5m and 242m depth coincide with the depth of a projected 7 Level in this mine.

Here, we intercepted 1m of gold mineralisation grading at 1.88g/t from 235.5m, 0.5m of gold mineralisation grading at 7g/t from 237m and 1m of gold mineralisation grading at 3.78g/t from 241m.

This is significant because historic mining at N1 only went down to 6 Level. One of the main unanswered questions we had about this was whether the ore body continued to 7 Level and below.

Levels 5 and 6 at N1 have flooded with slimes. While this has meant our exploration team has been unable to access these levels, it also means the ore body has almost certainly been protected from recent mining. This could present substantial near-term upside

Now that it appears we have confirmed the downdip extension at N1, we will test the lateral strike extent with the next three exploration holes.

Given that there are mines on the same regional structure as Nara that have been mined below 25 Level (>750m depth from surface), this could be developing into a significant opportunity for Kavango."

Kavango's Operations in Zimbabwe

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

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

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

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

Nara Drill Programme Testing New Underground Targets

The N1 mine is reported to have produced 72,468 ounces ("oz") of gold at grades of 10.0g/t before its closure in the early 1980s. It has not been systematically explored or mined in the modern era, with work limited to artisanal mining at or near the surface.

Kavango has placed a contract with Equity Drilling Zimbabwe to drill an initial three holes for 1,500m. The rig has now been mobilised to hole NAKLDDL003, and drilling is underway.

·    Kavango previously drilled hole NAKLDD001 to test the continuation of gold grades at depth beneath the central portion of the N1 mine workings and development (announced >>> 13 August 2024) .

·    Hole NAKLDD001 intersected a zone of mineralisation immediately beneath the development workings, indicating mineralisation on the historically mined reef is open at depth. Highlight intersections include:

§ 1m @ 1.88g/t Au from 235.5m to 236.5m

§ 0.5m @ 7.02g/t Au from 237m to 237.5m

§ 1m @ 3.78g/t Au from 241m to 242m

·    Significantly, Hole NAKLDD001 also intersected:

o A new hanging wall reef under moderate cover and close to surface that has not currently been identified at surface or worked by the historic or artisanal miners. Highlight intersections include:

§ 2.10m @ 1.54g/t Au from 54.9m to 57.0m

o A new reef in the footwall below the old N1 mine workings. Highlight intersections include:

§ 0.50m @ 1.99g/t Au from 279m to 279.50m

o Two further reefs at depth, both exhibiting sheared textures, veining and sulphides.

·    These areas are seen in Figures 2 and 3 below:

Figure 2: N1 plan map of surface workings and underground development with hole NAKLDD001.

Figure 3: N1 sectional view looking NW showing underground development and hole NAKLDD001, intersected gold grades are indicated by the red histogram and labelled. Logged "reef" structures are also marked.

·    Induced Polarisation ("IP") surveying over the entire N1 mine zone subsequently identified a discrete resistivity low coincident with the central portion of the mine workings and the mineralisation intersected by hole NAKLDD001.

o The resistivity low thins and shallows towards the northwest and drops off to the southeast before picking up again, as seen in Figure 4.

Figure 4: N1 surface workings and underground development with regional structures and planned boreholes on plan (left) and in section (right) with IP resistivity images.

·    Kavango's technical team believes the IP results, along with the new zones of mineralisation intersected by hole NAKLDD001, offer compelling evidence for the continuation of gold mineralisation along strike of the N1 development workings.

·    The Company has now begun to drill three holes along strike of hole NAKLDD001 into areas of the N1 mine zone that historic development data indicate to be entirely undrilled and with no known development.

o Hole NAKDDL002 and Hole NAKLDD004, will test whether gold mineralisation continues at depth in areas to the NW and SE of NAKLDD001 respectively, where historic development appears to be restricted to shallow levels near to the surface.

o Hole NAKDDL003 will test whether the mineralised structures at N1 mine extend into an area southeast of NAKDDL001 that appears to have never been mined.

o The proposed locations of the three holes are seen in Figure 4.

·    Further, all three holes have been designed to test the continuation along strike of the new hanging wall and foot wall reefs identified in hole NAKDDL001, as shown in Figure 4.

·    Successful completion of this programme will be followed by further drilling to establish grade and continuity in the new target areas.

Nara Background

The Nara claims are centred on the historic N1 and N2 mines, as shown in Figure 5 below.

Figure 5: Nara claims geology map overlain on magnetic Intensity (TMI) image, with location of completed scoping holes, historic mines and artisanal surface workings. Note the interpreted vein shears now extend the full length of the claims package.

Gold was mined at the N1 mine at historical grades reported to be 10.0 grams per tonne ("g/t") with a strike length of 838m down to a known vertical depth of 191m.

The mine is reported to have produced around 72,468 oz (Bartholomew 1990) of gold from initial production in 1902 up to final closure in the early 1980s due to the death of the owner.

The N1 Mine has previously been interpreted as the immediate western extension of the N2 Mine approximately 1.2km to the SE. However, the recent intersection of the new hanging wall reef in hole NAKLDD001 suggests this reef may be the lateral extension of the N2 Mine.

On surface, the N1 mine zone currently has a strike of about 1,000m. However, recent interpretation of the ground magnetics and IP suggests this could extend up to 2,600m from the dyke in the NW through to the N2 mine zone in the SE, the N1 Mine Extension Zone marked on Figure 5.

According to historic reports and underground plans, two parallel mineralised quartz vein reefs dipping between 50 & 70° to the NE were mined along approximately 838m of strike. The reefs were reported to have been between 1.5 and 6m wide.

The recent intersections in hole NAKLDD001, directly below the historic mine development are supportive of this conclusion.

The N2 Mine, which had a reported historical production of 18,167oz at an average recovered grade of 8.9g/t was exploited along a strike length of approx. 300m down to vertical depth of 267m.

According to historic reports, there are at least two parallel mineralised zones at N2 dipping at 50^o northwards.

A third orebody was discovered to the north, and historical reports mention the importance of exploration cross cutting as a successful means of intersecting additional parallel reefs. This emphasises the need for additional drilling along the entire strike.

The reef intersected in hole NAFWDD001 under artisanal workings appears to be coincident with the interpreted extension of the new hanging wall reef. Highlight intersections include 0.63m @ 0.82g/t Au between 73.28m and 73.91m.

Artisanal workings directly south of this reef remain to be tested in future drilling to assess if this could be the extension of the N1 mine zone NW of the dyke, named the NW Extension Zone in Figure 5.

Artisanal workings and an intersection in Hole NABZDD001 to the SE are interpreted from the ground magnetics and IP to be potential extensions of the new hanging wall reef and the N1 main zone and named the SE Extension Zone. Highlight intersections include 2.80m @ 1.66g/t Au from 36m to 38.80m.

Regional Mine Depths on Nara

Most of the mines in the Greenstone belt that Kavango is building its business on have been owned and worked by small scale mine workers. Many of these mines have only been exploited to relatively shallow depths for the following main reasons:

·    Lack of capital. 

·    Lack of awareness of developments in modern mining concepts, available improvements in mining and processing technology and expertise.

·    Exploitation primarily of oxide material with limited sulphide ore processed due to antiquated crushing facilities and lack of access to modern metallurgical processing technology or facilities.

·    Low production rates (example Jessie Mine in Gwanda is down 1.3km but this has taken the family over 100 years to achieve. An exploitation rate of only 13 vertical metres per year)

·    Poor ventilation

Only a few of the mines have been consolidated in the past and mined at relatively large scale. These mines have demonstrated the significant potential for large scale gold mineralisation at depth. These mines include the following:

·    Fred Mine - developed down 31 levels a vertical depth of 1,100m. The mine produced 171,618oz. (5,337.94kgs) @ 12.2g/t recovered (Baglow Page 164*). Approx. 9.5km from Nara.

·    Red Wing Mine - developed to 13 level a vertical depth of 450m and operated by the same company as Fred Mine. The mine produced 7,415oz. (230.64kgs) @ 10.7g/t recovered grade. (Baglow Page 197*). Approx. 7.8km WNW on the same regional structure.

·    Marvel Mine - developed to 640m below surface. The mine produced 1,439 oz. (44.76kgs) @ 4.6g/t recovered grade (Baglow Page 186*). Approx. 12.7km west on a branch of the same regional structure.

·    Teutonic Mine - developed on a 59 incline to approximately 1,000m below surface. The mine produced 19,437 oz. (604.56kgs) @ 18.7g/t recovered grade (Baglow Page 211). Approx. 9.7km to the SE on the same regional structure.

Next Steps

The Company intends to complete the current drill programme on the N1 mine zone to establish the grade and continuity of the N1 Main reef.

Successful completion of this programme will trigger further drilling to establish grade and continuity of the N1 Extension Zone, NW Extension Zone and SE Extension Zone.

For further information please contact:

Kavango Resources plc

Ben Turney

+46 7697 406 06

First Equity (Broker)

Jason Robertson

+44 207 374 2212

Kavango Competent Person Statement

The technical information contained in this announcement pertaining to geology and exploration have been compiled by Mr David Catterall, a Competent Person and a member of a Recognised Professional Organisations (ROPO). David Catterall has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken 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 (JORC 2012). David is the principal geologist at Tulia Blueclay Limited and a consultant to Kavango Resources. David Catterall is a member of the South African Council for Natural Scientific Professions, a recognised professional organisation.  

Reference

*The Geology of the Filabusi Greenstone Belt and surrounding granitic terrane. Baglow N.1998. Zimbabwe Geological Survey Bulletin No 91