KEFI Minerals plc Drilling confirms large scale of massive sulphides at Hawiah

KEFI Minerals (LON: KEFI), the gold exploration and development company with projects in the Federal Democratic Republic of Ethiopia and the Kingdom of Saudi Arabia, has today announced that the initial drilling programme at the Company’s Hawiah prospect in Saudi Arabia has demonstrated the continuous presence of massive sulphides directly below 4km of the gossanous Hawiah ridgeline.

Highlights

· Copper-zinc-gold-silver sulphide mineralisation intercepted consistently over more than 4km

· The sub-vertical mineralisation remains entirely open at depth as well as to the north and south within the Exploration Licence

· Further drilling has already commenced to define an initial Mineral Resource estimate

Drilling to date has confirmed that Volcanic Massive Sulphide (“VMS”) style of mineralisation is the source of the extensive and exceptionally strong geophysical anomalies under the ridgeline and that the mineralisation contains copper, zinc, gold and silver. Further illustrative information is contained in Appendix One which may be accessed through the following link – http://www.rns-pdf.londonstockexchange.com/rns/6586A_1-2020-1-22.pdf

Executive Chairman of KEFI, Mr Harry Anagnostaras-Adams, commented:

“Hawiah drilling to date has consistently intercepted massive sulphides containing base and precious metals in the expected location below 4km of the gossanous ridgeline.

“This drilling has already confirmed that Hawiah is a large VMS system that appears analogous to and larger than the Al Masane VMS mine in southern Saudi Arabia.

“Excellent continuity over the 4km makes the Hawiah VMS mineralisation easy to drill out and ultimately to be amenable to straightforward underground mining.

“We have already commenced the next phase of drilling which is likely to lead to an initial Mineral Resource estimate.”

The VMS mineralisation is proving to be continuous under the Hawiah ridgeline and is present from surface to a vertical depth of 275m. Whilst many assay results are still being received, the following overwhelmingly positive conclusions can already be drawn:

· Drilling has demonstrated the presence of massive sulphides directly below 4km of the Hawiah ridgeline, with estimate true thickness (“ETW”) of the massive sulphide intervals ranging from 0.5m to 11.5m;

· The mineralisation intercepted has been laterally continuous along strike and down dip with very limited apparent structural offsets or deformation;

· Sufficient drilling has been completed to identify two particular zones with the following preliminary parameters for potentially mineable lodes:

o The ‘Camp Lode’: 800m long, with an average width of 8m and confirmed to a depth of 275m below surface (Figures 1 and 2); and

o The ‘Crossroads Lode’: 600m long, with an average width of 6m and confirmed to a depth of 135m below surface (Figures 1 and 3).

· Both of these lodes remain open at depth and all geological indicators suggest that only the fringe/apron of this VMS system has been drilled to date; and

· Geochemical analysis and volcaniclastic textures within the Camp and Crossroads Lodes indicate increasing proximity with depth beneath the core of these Lodes to a potential vent source where typically thicker massive sulphides and stockwork-style sulphide mineralisation is found.

Based on published literature, the Hawiah deposit appears analogous to the Al Masane polymetallic VMS mine in southern Saudi Arabia, with similar metal composition and structural and geological settings, (reported proven and probable reserves of 7.21mt at 1.42% Cu, 5.31% Zn, 1.19g/t Au and 40.2 g/t Ag which is approximately 400,000 tonnes contained copper-equivalent in situ). To the north of Hawiah is another polymetallic VMS mine, Jabal Sayid, which is operated by Barrick Gold Corporation and Saudi Arabian Mining Company, Ma’aden, and is focused on the stockwork zone (reported proven and probable reserves of 27.11mt at 2.38% Cu being 650,000 tonnes contained copper in-situ).

The massive sulphides intercepted at Hawiah comprise a polymetallic blend of copper, zinc, gold and silver:

· Best intercepts in the Camp Lode include:

Note: Copper-equivalent grades have been estimated based on the following prices which approximate current spot prices: copper $6,000/tonne, zinc $2,500/tonne, gold $1,550/ounce and silver $18/ounce. Recoveries of 80% have been applied for each metal as metallurgical test work has not yet been undertaken. It is the Company’s opinion that all elements included in the copper-equivalent calculation have a reasonable potential to be recovered and sold.

· Whilst assay results are only currently becoming available for the Crossroad Lode copper mineralisation (chalcopyrite/chalcocite) has been visually identified in all drillholes with massive sulphide intersections and the following intercepts include:

· Massive sulphides were intersected in drillhole HWD-28 which is approximately 150m north of the Hawiah ridgeline, confirming the mineralised horizon continues at depth (named Crossroads Extension area) even beyond the northern surface exposure; and

· Chalcopyrite continues to be frequently present as secondary mineralisation within veins and as disseminations within higher permeability areas, indicating that the primary feeder for mineralisation is yet to be identified.

Further Information

KEFI’s initial Hawiah drilling programme was completed in Q4 2019. Following positive results, the programme was extended from 2,500m to 3,000m of diamond drilling.

The Hawiah mineralised structure under a gossanous ridgeline and is orientated along an approximately north-south trending strike and the with a sub-vertical to westward dip.

Trenching by KEFI has demonstrated good gold grades occur along the strike length of this over a 5km-long gossanous horizon. The upper gossan portion of the mineralised zone remains challenging to sample by drilling because of typical weathering patterns and the numerous cavity zones encountered. This oxidised portion of the deposit, which has demonstrated high levels of gold mineralisation (HWD-6: up to 3.1g/t gold) will be further investigated during the second phase of exploration.

G&M Joint Venture

In the Kingdom of Saudi Arabia, KEFI conducts all its activities through Gold and Minerals Co. Limited (“G&M”), a joint venture company with Abdul Rahman Saad Al Rashid and Sons Limited (“ARTAR”). KEFI is operator and is fortunate to have such a large and strong Saudi group as a partner.

Based on the Hawiah results to date, the Board of joint venture company Gold & Minerals Limited has approved a Stage 2 Hawiah drilling programme which is aimed at delineating an initial Mineral Resource over the next 6 months in accordance with the JORC Code. A Preliminary Economic Assessment and the triggering of a development feasibility study will be undertaken, if warranted.

KEFI has recently diluted its interest in G&M to 37% (from 40%) in return for funding contributed by ARTAR during 2018 and 2019. Given the highly encouraging results from the recent drilling campaign, KEFI does not intend to dilute further and believes it is now in a solid position to contribute its share of G&M costs going forward.

KEFI anticipates Hawiah can be advanced to a development decision at relatively low cost due to the continuous nature of the mineralisation and, in due course, development funding will be readily available. For example, KEFI not only has a strong partner in G&M but also the Saudi Industrial Development Fund provides loans for up to 75% of the capital cost of mine development at attractive interest rates.