KGL Resources : Brownfields Copper Discovery at Jervois

Brownfields Copper Discovery at Jervois

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21 December 2021

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Geophysics-led discovery;

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Coincident IP and DHEM anomalies;

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Large-scale DHEM conductor target: 700m strike x 500m dip;

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Chalcopyrite-Bornite mineralisation logged in first drillhole, confirmed by assays;

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Located on Jervois J-Fold, between Rockface and Reward resources;

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Follow-up drilling and DHEM planned for 2022;

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Proximity to Rockface mine plan.

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KGL Resources (ASX:KGL) is pleased to announce the discovery of a new copper Exploration Target

through the recent application of induced polarisation (IP) and down-hole electromagnetics (DHEM)

geophysical techniques at Jervois. The assay results from the discovery hole, KJCD482, confirm the

discovery.

Background

The Jervois J-fold is a distinctive large-scale geological structure which is well known to host several

mineral occurrences. These include the three JORC mineral resources, Reward, Rockface and Bellbird,

which form the basis for the current Feasibility Study.

It is also recognised that geophysical methods such as magnetics, gravity, IP and DHEM are very effective

exploration tools at Jervois, especially when used in concert. The Rockface deposit, which has an average

grade of 3.17% copper1, was initially discovered using DHEM, and this technique has recently been used

at Rockface, in conjunction with drilling, to explore a very-high grade shoot2.

During 2021, the company carried out a large IP survey which was designed to explore sections of the J-

fold which had not been adequately covered and to infill previous IP surveys performed by MIM over 20

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years ago.

It is clear now that these techniques are successful, particularly when used together, in defining targets in

this area.

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It is proposed to test the Cox's South DHEM conductor with a follow-up hole, situated approximately 220m

south-west of KJCD482, where the IP response is at its highest strength (See Figure 2 andFigure 3 below).

This hole is scheduled for early 2022 and will be preserved for further DHEM which is also scheduled for

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early 2022. Further drilling on this target is contingent on the result of the proposed hole and the DHEM

survey.

"Exploration Target" cautionary statement: The potential quantity and grade is conceptual in

nature, given that there has been insufficient exploration to estimate a Mineral Resource and that it

is uncertain if further exploration will result in the estimation of a Mineral Resource.

Figure 2: Depth Slice at 0m RL of Cox's South target showing the large IP anomaly (coloured blocks) along strike to the southwest

from Cox's Find prospect. 2021 drilling is depicted as pink traces and planned hole in magenta. The large conductor plate from

KJCD482 is the dark green rectangle. Other smaller conductors are evident from KJC461, KJC462 and KJCD483 but these are not

considered to be priority targets. The one, off-hole, conductor target of interest has a high modelled conductivity of 500S but because

of its distance from the hole, the uncertainty is high. Once the proposed hole is completed the 500S anomaly may come into sharper

focus.

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Brownfields Copper Discovery at Jervois

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KJC461: 1.54% Cu and 1.2 g/t Ag over 0.94m ETW from 234m down hole

Figure 3: Cros Section through KJCD482 and Coxs South target show in the attitude of the DHEM conductor. Plan view inset

displays orientation of the section and the width of the plot window. The one, off-hole, conductor target of interest has a high

modelled conductivity of 500S but because of its distance from the hole, the uncertainty is high. Once the proposed hole is

completed the 500S anomaly may come into sharper focus

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Hole KJCD483 targeted an IP anomaly approximately 350 metres south-east of the Cox's Find outcrop,

with the prospect being named AZ (See Figure 2). The hole intersected disseminated pyrite and

chalcopyrite mineralisation and encouraging alteration over broad zones, which likely explains the IP

anomaly.

One interval of 2.53% copper was intersected over a down-hole interval of 1.14m from 234.11 metres. This

zone was not directly associated with an in-hole DHEM conductor although a small 50m x 50m weak off-

hole conductor plate is located above the hole approximately 30 metres away from the copper intersection.

At this stage AZ has been afforded a lower priority for further drilling.

Consulting Geophysicist Kate Hine comments," The discovery of the Cox's South exploration target

vindicates the exploration approach adopted by KGL, which is an iterative process involving conceptual

geological thought, IP geophysics, drilling, DHEM, geophysical modelling and interpretation.

"Whilst the Cox's South DHEM anomaly, so far mapped, is not a strong conductor, it is in keeping with

the mineralisation style observed in the hole KJCD482. It must be noted that much of the Bellbird and

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Reward deposits are also only weakly conductive. Rockface is the exception in being a strong

conductor. To maximise the effectiveness of the DHEM surveys, a coil probe detector was employed

which is more sensitive to weaker conductors"

KGL Managing Director Simon Finnis also comments: "Our exploration efforts are beginning to generate

results even though we are only in the early stages, due to the necessity to engage the drill rigs for

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resource building throughout most of 2021.

"We are excited that the first drillhole into this target, has intersected chalcopyrite and bornite

mineralisation of potentially economic grade, and just as importantly, the DHEM has revealed an

exploration target of significant dimensions"

"The IP survey completed last year will inform our exploration program in 2022 but the Cox's South IP

anomaly represented low-hanging fruit to drill and carry out DHEM in 2021.

"We are all greatly anticipating the follow-up hole to further test the exploration target which is

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scheduled to be drilled early in 2022. This new hole will be preserved for early 2022 DHEM surveying,

which should further tighten the modelling of the conductor targets. Follow-up DHEM surveys of the

most recent Rockface holes at depth are also planned for early 2022.

"From a development point of view, Cox's South is in close proximity to the planned Rockface

underground mine with the south-western edge of the conductor model less than 50m from the

Rockface stopes. Obviously, it is early days yet, but the potential synergies are clear.

"In the coming weeks we will devise a drilling plan focussing on near term Resource growth, with the

clear aim to extend the mine life . We will also prepare a synthesis of the updated geophysical results

and models and finalise the broader scope of exploration drilling strategy for 2022. The market will be

informed of these plans once completed."

This announcement has been approved by the directors of KGL Resources Limited.

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