• Kavango Resources has commissioned a 50 tonne per day gold processing plant at its Hillside Gold Project
• The plant achieved 69% average capacity utilisation during its first commissioning period
• The commissioning phase will determine whether Hillside can justify larger scale investment as Kavango seeks to transform a 33,900 ounce JORC compliant resource into sustained commercial production

Harare - Kavango Resources has entered a decisive phase in its Zimbabwe growth strategy after commissioning its 50 tonne per day gold processing plant at the Hillside Gold Project, shifting the company from exploration and mine development into operational execution.

Processing began on 1 July 2026 using ore sourced entirely from Kavango’s own operations, with the plant reaching an average utilisation rate of 69% between 18 and 28 July.

Gold has already been successfully recovered through the carbon in leach circuit, providing the first indication that the company’s processing flowsheet is functioning under live operating conditions.

The commissioning milestone carries greater significance than the installation of a processing plant. Exploration companies derive value largely from drilling results, mineral resources and geological potential. Once a plant begins operating, the investment case increasingly depends on tonnes processed, metallurgical recoveries, operating costs, plant reliability and ultimately cash generation. Hillside has therefore entered the stage where operational performance will begin replacing geological interpretation as the principal measure of project quality.

The 50 tonne per day plant has been designed as a proof of concept facility rather than the project’s final production configuration. Management’s objective is to validate every stage of the processing circuit before committing capital to larger scale expansion. Ore is now passing through crushing, milling, gravity concentration and carbon in leach recovery while an on site laboratory equipped with bottle roll testing, fire assay and Atomic Absorption Spectrometer capability provides immediate metallurgical analysis.

This allows processing parameters to be adjusted quickly while giving management accurate information on plant performance and recovery efficiency.

The immediate focus is Bill’s Luck Underground, where Kavango has already defined a JORC compliant mineral resource of 33,900 ounces grading 2.68 grams of gold per tonne. Previous metallurgical testing suggested recoveries between 90% and 93%.

Those laboratory expectations must now be confirmed under continuous operating conditions where ore variability, plant availability, reagent consumption and equipment performance determine commercial outcomes. The commissioning programme is therefore testing whether theoretical recoveries can be consistently reproduced in practice.

Capacity utilisation of 69% during the initial commissioning period should be interpreted within that context. Commissioning is designed to expose mechanical, electrical and metallurgical issues before a plant reaches steady state production. Processing plants rarely operate at full design capacity immediately after construction because engineers deliberately introduce ore progressively while calibrating equipment and optimising the recovery circuit. The July utilisation rate therefore measures the plant’s progress through commissioning rather than its long term operating capability.

The larger strategic question concerns scalability. A 50 tonne per day operation provides valuable operating information but generates relatively modest production volumes. Its commercial importance lies in reducing uncertainty ahead of future expansion. Every tonne processed improves management’s understanding of mining conditions, grade reconciliation, recovery performance and processing costs. That information becomes the foundation for designing a larger operation with greater confidence over capital requirements and expected returns.

The phased development model also reduces investment risk. Instead of committing substantial capital to a large processing facility before understanding the ore body, Kavango has chosen to validate the resource through a smaller operation.   This approach allows management to refine mining methods, optimise recoveries and identify operational constraints before exposing shareholders to significantly higher capital expenditure. The strategy is particularly relevant for junior mining companies where capital discipline often determines long term project success.

Zimbabwe’s current gold market provides a supportive backdrop for that strategy. International bullion prices remain historically elevated, strengthening project economics across the country’s gold sector. High prices improve the value of every recovered ounce and lower the cut off grade required for commercial mining. Commodity prices alone cannot compensate for weak recoveries or high operating costs, making the commissioning programme critical in determining whether Hillside can convert favourable market conditions into sustainable profitability.

The project also illustrates a broader shift taking place within Zimbabwe’s mining industry. Exploration activity has accelerated over recent years as international companies seek exposure to the country’s underdeveloped greenstone belts. The challenge increasingly lies in converting exploration success into producing mines capable of generating export earnings and shareholder returns. Hillside now joins a growing group of projects attempting that transition.

For investors, the next series of operational updates will carry greater importance than the commissioning announcement itself. Management now needs to demonstrate consistent throughput, stable recoveries, reliable plant availability and economically viable operating costs. Quarterly disclosures showing tonnes processed, recovered ounces, recovery percentages and cash operating costs will determine whether Hillside progresses towards commercial production or requires further optimisation before expansion.

The commissioning programme also provides an early indication of how effectively Kavango can execute mining projects beyond exploration. Building a processing plant is a capital investment. Operating it efficiently requires a different set of capabilities involving engineering, metallurgy, production planning, maintenance and cost management. Successful execution across these disciplines would strengthen confidence in Kavango’s ability to develop additional projects within its Zimbabwean portfolio.

The Hillside project therefore represents more than a new processing plant. It marks the point where Kavango’s Zimbabwe strategy begins to generate measurable operating evidence instead of relying primarily on geological potential. The company has demonstrated that ore can move through its processing circuit and produce recoverable gold. The next stage is proving that the plant can consistently deliver recoveries close to the expected 90% to 93% range while generating the operational data required to justify larger scale commercial investment.

Hillside will move from being an exploration success to becoming a producing gold asset if those objectives are achieved, If commissioning exposes material technical or economic constraints, the proof of concept plant will have achieved its purpose by identifying those risks before significantly larger capital commitments are made. That makes the commissioning phase one of the most important value creation periods in Kavango’s development of the Hillside Gold Project.

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