Cauldron Energy : Quarterly Report & App5B

29 July 2016

Please find attached the Quarterly Activities Report and Appendix 5B for the period ended 30 June 2016.

Yours faithfully,

288,002,620 shares

44,000,000 unlisted options

Tony Sage Executive Chairman

Qiu Derong

Non-Executive Director

Judy Li

Non-Executive Director

Mark Gwynne

Non-Executive Director

Catherine Grant Company Secretary

Jess Oram Exploration Manager

32 Harrogate Street, West Leederville WA 6007 | PO Box 1385 West Leederville WA 6901 | PHONE +61 8 9380 9555 | FAX +61 8 9380 9666

www.cauldronenergy.com.au

HIGHLIGHTS

• Cauldron Recovers Judgment Debt

  EXPLORATION & PROJECTS

• Yanrey Uranium Project

  • Cauldron Energy and radiological consultants, Radiation Advice and Solutions Pty Ltd, have now completed the Radiation Management and Radiation Waste Management Plan for the proposed Field Leach Trials at the Bennet Well Uranium Deposit. The first draft of this document is with the Department of Mines and Petroleum (DMP) for initial review and comment.

  • The first phase of the lithological/hydrogeological framework model for Bennet Well has now been completed. Phase 1 involved the detailed interpretation work of all drilling data from the deposit. The results from Phase 1 are now being collated in Micromine to develop a 3D model showing the surfaces of all respective, interpreted stratigraphic units, as well as various lithological features that may act as influential controls on mineralisation.

  • The Passive Seismics orientation survey commenced in June 2016 over the Bennet Well deposit. The results of the orientation are currently being processed and interpreted however the initial passive seismic response appears to be a useful exploration tool in accurately mapping out the basement profile over the deposit.

• Argentina

  • Cauldron is awaiting judicial approval to allow the commencement of drilling at Rio Colorado.

  • Some tenements were approved for surrender following an additional tenement review earlier in the March 2016 quarter. The geological significance of these areas was deemed as unlikely to host mineralisation of economic tenor and grade, thus prompting the decision for surrender in favour of focusing exploration activities on more prospective ground such as the Rio Colorado project area.

Cauldron Energy Ltd (Cauldron or the Company) is pleased to present its Quarterly Activities Report for the period ended 30 June 2016.

CORPORATE ACTIVITIES

Cauldron Recovers Judgment Debt

As announced by Cauldron on 29 July 2016, the Company received judgment in its favour in respect of its claim against Guangzhou City Guangrong Investment Management Co. Ltd (Guangzhou City). The judgment debt due and payable by Guangzhou City to the Company is

$1 million plus interest.

Guangzhou City was the registered holder of 33,898,812 shares in Cauldron (Shares).

On 17 May 2016, upon the Company's ex parte application, Master Sanderson made orders appointing a receiver (Mr Kim Waldman of HLB Mann Judd (Insolvency WA) (Receiver)) over the Shares to recover payment of the judgment debt in accordance with the powers by the Civil Judgments Enforcement Act.

On 5 July 2016, the Receiver completed the sale of the Shares to investors who have agreed to a six-month escrow period in respect of the Shares. The Company recovered $508,475 of the judgment debt (before Receiver costs) from the sale of Shares by the Receiver, and the funds were received by the Company during July 2016.

The Company considers further recovery to be doubtful and is taking advice in respect of registering the judgment in China.

Cash at 30 June 2016

Cash available to the Company at the end of the June 2016 quarter was $2.8 million.

EXPLORATION ACTIVITES: AUSTRALIA

In Australia, Cauldron has two project areas (Figure 1) covering more than 4,500 km2 in two known uranium provinces in South Australia and Western Australia. Projects include:

• Yanrey Project (Yanrey) in Western Australia comprises 13 granted exploration licences (2,209 km2) and 7 applications for exploration licences (912 km2). Yanrey is prospective for large sedimentary-hosted uranium deposits. A joint venture securing two of the exploration licences in the Yanrey Project tenement group (called the Uaroo Joint Venture) expired at the beginning of the September 2015 quarter.

• Marree Joint Venture in South Australia comprising five granted exploration licences (2,794 km2) prospective for sedimentary-hosted uranium deposits of both the Beverley Uranium and Four Mile Uranium style, and for base metal mineralisation.

  Figure 1: Major Project Locations in Australia
• Boolaloo Project (Boolaloo) in Western Australia comprises 2 granted exploration licences (104.13km2) prospective for gold mineralisation.

BENNET WELL (YANREY REGION)

The mineralisation at Bennet Well is a shallow accumulation of uranium hosted in unconsolidated sands close to surface (less than 100 m downhole depth) in Cretaceous sedimentary units of the Ashburton Embayment.

The Bennet Well deposit is comprised of three spatially separate deposits; namely Bennet Well East, Bennet Well Central, and Bennet Well South (refer to Figure 2).

Work completed during the reporting period comprised the following:

1. Cauldron Energy and radiological consultants, Radiation Advice and Solutions Pty Ltd, have now completed the Radiation Management and Radiation Waste Management Plan for the proposed Field Leach Trials at the Bennet Well Uranium Deposit. The first draft is with the Department of Mines and Petroleum (DMP) for initial review and comment. Pending finalisation, the document will be used in the preparation of the Program of Works application for a pump test and field leach trial at Bennet Well.

2. The first phase of the lithological/hydrogeological framework model for Bennet Well has now been completed. Phase 1 involved detailed interpretation work of all lithological and geophysical information collected from drilling over the deposit. This interpretative work was then extracted into a database that is now being used to develop a 3D model in Micromine (Phase 2). The resulting model will show the surfaces of all respective, interpreted stratigraphic units (such as the fresh basement surface), as well as various lithological features that may act as influential controls on mineralisation (e.g. structures such as faults and silcrete horizons within the overlying aquiclude).

3. The Passive Seismics orientation survey commenced in June 2016 over the Bennet Well deposit. The work program experienced some delays due to substantial rainfall between mid-late June and early July 2016, resulting in the flooding of many areas and blocking access to the major exit routes from the project area. However, there has been no further rain since and many flooded areas are now becoming more accessible over time as the water evaporates. The orientation survey is currently scheduled to be completed early in the September 2016 quarter. The processing and interpretation is underway of all passive seismic data obtained thus far from the orientation survey at Bennet Well, with the eventual aim of using the results to further constrain the basement model obtained from the lithological framework described above in point 2. The geological understanding of basement considerably increases the probability of exploration success, and the efficacy of exploration target generation.

YANREY PROJECT

The Yanrey Project comprises a collection of twelve exploration tenements in north-west Western Australia, one of which secures the Bennet Well Uranium Deposit. The project is prospective of sandstone-style uranium mineralisation capable of extraction by in-situ recovery mining techniques.