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The MiningMaven Q&A: Kavango Resources’ Chief Geologist, Mike Moles (June 2019)

Since listing in London last July, Kavango Resources (LSE:KAV) has been making progress in its
quest to locate magmatic, massive sulphide orebodies in Botswana. In particular, the company is
focused on a 450km-long magnetic anomaly called the Kalahari Suture Zone (KSZ), where it hopes
to discover deposits of copper, nickel, and platinum group elements.

Recent weeks have seen Kavango’s shares enjoy a considerable rally as a result of strong drilling
results at its Ditau prospect and progress in its ongoing airborne electromagnetic survey over the KSZ.
Here, co-founder and seasoned geologist Mike Moles answers key questions from MiningMaven and
investors around the firm’s recent news flow and its plans moving forward.

Q) Kavango has recently completed an airborne VTEM survey over the Kalahari Suture Zone
(KSZ). Could you please explain the limitations of the first VTEM survey, which was completed
in October 2018, and what improvements were made for the second survey in February 2019.
What were you hoping to find with the second survey?

A) In most AEM surveys, electro-magnetic waves are generated by towed equipment. The lower the
frequency of the EM waves, the deeper they penetrate into the ground. A receiver on the aircraft
measures the time delay in getting these signals back, and this measures the “conductivity” of the
underlying rock.

The Phase 1 VTEM survey was carried out at a frequency of 25Hz. The higher frequency EM signals
(50Hz or 25Hz) are absorbed by conductive layers in the ground, which is OK if you are looking for
water in aquifers down to 100m depth. However, it is not so good if you are looking for deeply buried
sulphide deposits at over 250m beneath conductive Kalahari salt pans or Karoo shales and

The average depth penetration of the 25Hz VTEM survey was only 169 metres, so we were only just
beginning to see the upper parts of conductors that could be indicative of mineralisation at our target
depths. This meant we had to visit all 26 of the conductors identified in the VTEM survey and run some
fairly extensive (and expensive) ground geophysical surveys over all of them to determine their
potential for hosting mineralisation.

In the past, the main problem with the lower frequency surveys was noise. This was mostly due to the
vibrations caused by the helicopter, and particularly that associated with wind-shear. After the
disappointing depth penetration of the VTEM system, we learnt that the Danish company SkyTEM
were claiming to have solved the noise issues with a 12.5Hz frequency system. Further enquiries and
endorsements by companies that had used the system convinced Kavango to see if this new system
would be available for our Phase 2 survey.

The added depth penetration of the SkyTEM system has made a huge difference to what we can “see”
below the surface. It is like being able to see the whole body rather than just the top of its head.

Q) When Kavango first came to market, part of its pitch was that it expected to be able to
release initial results from airborne surveys speedily. The company was able to provide results
of the first airborne VTEM survey, and the identification of 26 conductors, within a very short
time of completion. Release of results from the second survey has taken much longer. Why
has the company changed its approach?

A) For the Phase 2 (SkyTEM) survey, it was decided to use some very hi-tech data processing that
was being pioneered by a geophysics consultancy based in Copenhagen. This processing results in
a very detailed 3D model of the ground covered by the survey. Because this consultancy is “well ahead
of the game” in this work, there is much demand for their services. Our survey data had to wait in the
queue. However, the work has now been finished, and Kavango are now evaluating the results.

Q) In December 2018 the company announced it had identified significant drill targets, after
follow up ground surveys of the conductors identified in the first phase airborne VTEM survey.
Could you please describe the process that was followed in the ground surveys, what the
company was looking for and whether the company is following the same approach after the
second airborne VTEM survey.

A) The follow-up process for the Phase 1 AEM survey involved the selection of 26 conductors by
Kavango’s geophysics team together with geophysicists from the contractor (Geotech Ltd). Each
conductor was given a number and visited on the ground. If the conductor appeared to be shallow and
was overlain by a visible clay pan, the target was rejected for further follow up. Further selection was
based upon whether the conductor had a surface (soil) geochemical anomaly sitting over it. This
reduced the targets to eight. All of these were then surveyed by ground based CSAMT surveying
(which is a type of EM). Of these, three were selected as “Significant Conductor Targets”.
The drilling of these targets was delayed because it was decided to drill the conductors discovered at
the Ditau Camp Prospect (PL169) first. By the time the drilling at Ditau had been completed, the Phase
2 AEM data had identified further targets for evaluation. Once the Phase 2 targets have been followed
up and prioritised, a KSZ drilling programme will be announced. This may include targets from the
Phase 1 AEM survey.

Q) The recent RNS suggests the initial results of the second drill hole at Ditau were better than
the first. Could you please describe what Kavango has already encountered across the two
holes at Ditau and what the board hopes to see in the forthcoming results of the assay tests?

A) My view is that they both tell the same story. The main difference is that the first hole was stopped
due to bad ground before it intersected the intrusive body at depth. The second hole intersected a
gabbroic intrusive at 478m and was continued into the gabbro for a further 79m.
The geological interpretation of what we have discovered in these holes is still far from clear, but it
seems quite unusual. The magnetics suggests that the gabbro is 7km by 5km in size with an unknown
thickness. Both the gabbro itself and the overlying Karoo sedimentary rocks are highly altered. The
fact that the alteration products are very similar for both the gabbro and the sediments suggests that
the gabbro is of Karoo age (or even post-Karoo). Not only are both rock types altered but they are also
highly deformed, suggesting some local (or even regional) tectonic event. Indeed, it seems possible
that it was this tectonic event that led to the alteration rather than the intrusion of a molten magma into
the sediments, which rarely produces such a degree of alteration.

A magnetic image of the Kalahari Suture Zone, where Kavango is searching for massive sulphide

Unfortunately, the portable XRF is not able to determine values for gold, silver, uranium, vanadium or
PGEs. Of the Rare Earths, only Neodymium (Nd) and Praseodymium (Pr) can be detected. But the
XRF does suggest that the alteration includes elevated arsenic, cobalt, copper, zinc and lead, as well
as high levels of iron, potassium, calcium, titanium, barium, strontium and zirconium. Neodymium and
Praseodymium run at around 0.2% for over 200m.

Kavango is obviously waiting with great interest to see what comes out of the assay results. Of
particular interest will be values for Rare Earths, gold, uranium, copper and vanadium.

Q) Could you please explain the significance of the Karoo sediments and the roles they play in
Kavango's model for the KSZ and Ditau. What is the company looking for there and what
indicators is it hoping to find to prove its hypothesis of the presence of a Norilsk style
deposit(s) in the region.

A) In most of southern Africa, the Karoo sediments were laid down “unconformably” on top of much
older rocks of the Proterozoic Era. The sedimentary sequences began accumulating about 300 million
years ago and this lasted for about 110 million years. In the KSZ area (including Ditau) the Karoo
sediments are usually 200 to 300m thick and capped with up to 20m of much younger Kalahari sand.
Towards the end of the Karoo the old super-continent of Gondwana started to break up with South
America drifting away from Africa. As it did so, deep seated faults appeared parallel to the main rift, or
in some cases old fault lines re-opened allowing molten magma to intrude into the crustal rocks. It
seems that the old KSZ discontinuity which had formally marked a very ancient craton edge was reactivated
and formed a conduit for ascending magma. The magma was extruded onto the surface in
the form of basaltic lavas. These lavas built up into thicknesses of several kilometres and covered
most of southern Africa as well as parts of India, Antarctica and South America, which were then still
part of Gondwana. Whilst most of the lavas have since eroded away, many of the magma chambers
that fed the lava “fissures” remain as intrusive bodies buried within the Karoo sediments. It is these
Karoo intrusive bodies that Kavango believes could be associated with metal bearing sulphide

We know that a similar chain of events took place at Norilsk (Siberia). Here, very rich sulphide ore
bodies have been found in association with the magma chambers (or feeders). As at Norilsk, many of
the intrusive bodies along the KSZ were emplaced within coal measures or coaly shales, where the
high sulphur content of the host rocks may have facilitated the development of massive sulphide ore

As a general model, Kavango would expect to find such sulphide mineralisation within the lower Karoo
sediments at depths of between 100m and 300m. However, the KSZ represents a 450km long zone
of deep-seated faulting, intruded by magmatic bodies along its entire length. It is thus highly
prospective for the discovery of any model of mineralisation associated with continental break-up and
volcanism. Due to the depth of cover, the area has been largely ignored by mineral exploration
companies. Only now have the geophysical and geochemical techniques become available to look
beneath this cover for the large ore deposits that are likely to reside there.

Q) What is a gabbro and what is its significance?

A) Intrusive rocks start their life as molten magma at the interface between the solid crust and the
semi-liquid outer mantle. Granite intrusions are made from re-cycled (molten) crustal material that has
been brought down towards the mantle by subduction. But mafic and ultra-mafic intrusives are
composed mainly of mantle-derived material that undergoes some degree of differentiation as it rises
through the crust towards the surface. Magma that extrudes onto the surface cools fast and produces
rocks with small crystals, whilst magma that cools slowly within the crust produces intrusives with more
coarsely gained minerals. Gabbro is one of the most common mafic intrusives and the coarse-grained
equivalent of basalt (lava).

Mafic and ultra-mafic magmas contain small amounts of precious and base metals. As the magma
cools, these metals tend to find sites within crystallising silicate minerals and as such are not found in
concentrations rich enough to form economic deposits. However, in certain circumstances, the metals
can combine with “free” sulphur to form an immiscible liquid. This can accumulate in various areas
within the magma chamber to form massive sulphide deposits. The extra sulphur required for “sulphur
saturation” can be introduced by the incorporation of coal measures into the magma chamber during
its emplacement.

Further concentration of the sulphur-rich liquid can occur by being forced cracks in the surrounding
“country” rock as pressure builds up in the chamber; or much later, by hydrothermal fluids dissolving
the sulphides and re-depositing them in more concentrated form elsewhere either within or outside the
magma chamber.

Q) Could you please explain what the "alteration halo" is and why it is Kavango's principal
interest at Ditau, as described in the recent RNS.

A) When a magmatic body is intruded into the country rock, it is extremely hot. Any water in the
surrounding rocks becomes super-heated and can start to change the chemistry of both the country
rocks and the cooling magma itself. This alteration has the capacity to “dissolve” certain elements
within the mineral assemblages and deposit them, in concentrated form, in places where the
temperature or pressure or chemistry of the hot liquid promotes deposition. This alteration is
sometimes termed “an alteration halo”. However, as has been said in answer to an earlier question,
gabbroic intrusions of the size underlying the Ditau prospect do not normally produce alteration halos
hundreds of metres thick.

The intense alteration lying above the intrusive at Ditau appears to be around 300m thick, which is
unusual. Both the Karoo sediments and the gabbro itself are also highly deformed. Kavango is
interested in the mineralisation in the Karoo sediments because they are closer to surface. Generally,
the deeper the mineral deposit is from surface, the higher the value of the mineralisation needs to be
to make mining economically viable. Until we get the assay results back from the laboratory, we will
not know if the alteration above the gabbro hosts economic resources of valuable minerals.
This article marks the first in a series of quarterly Q&A sessions between MiningMaven and Kavango
on the behalf of Kavango’s investors. If you have any questions you would like answered in the next
piece then please feel free to contact MiningMaven at This email address is being protected from spambots. You need JavaScript enabled to view it. or via our Twitter
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