Cauldron Energy : Defines ISR Target at Yanrey

ASX Announcement

23 November 2021

Yanrey Uranium Project Update

important Intellectual Property in the understanding of this style of sandstone-hosted,palaeochannel-type, uranium deposit which is highly amenable for In-situ Recovery (ISR) style mining.

The 2021 passive seismic results highlighted multiple new targets over areas of unusual basement complexity. This structural information will assist in further developing the systems-style exploration model. Despite the restrictions put on uranium explorers by the current political climate in Western Australia, the completion of the passive seismic surveys prove that Cauldron is still dedicated to progressing the Yanrey Uranium Project as much as it possibly can.

1 Refer to ASX:CXU Announcement dated 17 December 2015

ABN

22 102 912 783

Address

Unit 47, Level 1

1008 Wellington Street

WEST PERTH WA 6005

PO BOX 1024

West Leederville WA 6007

ASX Code

CXU

Securities on Issue

491,293,630 shares

6,833,395 Options (exercise price: $0.03; expiry 31 Dec 2021)

16,666,666 Options (exercise price: $0.03; expiry 31 Mar 2022)

10,000,0000 Unlisted Options (exercise: $0.03; expiry 16-Sep-22)

6,000,0000 Unlisted Options (exercise: $0.05; expiry 16-Sep-23)

61,001,898 Options (exercise price: $0.05; expiry 30 Nov 2023)

9,000,000 Performance Rights (expiring 10 August 2025)

Board of Directors

Simon Youds

Executive Chairman

Jess Oram

Non-executive Director

Qiu Derong

Non-executive Director

Judy Li

Non-executive Director

Chenchong Zhou

Non-executive Director

Michael Fry

Company Secretary

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Speaking about the results, Cauldron's Executive Chairman, Simon Youds, said: "Our ultimate objective is to explore for uranium mineralisation amenable to extraction by ISR. Economic deposits of sandstone-hosted, palaeochannel-styleuranium can be mined using ISR in the lowest cost quartile of uranium mined globally. This characteristic makes these deposits extremely attractive for mining at any uranium price and necessarily must form the basis of any uranium resource portfolio.

The recent passive seismic results justify the confidence we have in our current exploration model, which has seen the tripling of uranium resources reported at Bennet Well. The team that unveiled Bennet Well understand the components of these significant energy resources crucial for the World's shift to lower carbon power. We believe that the Yanrey Project exists within a larger uranium province that is slowly being uncovered. There is potential here for a scale comparable to the best uranium-endowed province globally and that, with astute leadership, Western Australia is at the threshold of a new energy resources boom."

The ISR style of uranium extraction is the most energy-efficient mining method with the lowest mining cost and, hence, the lowest carbon footprint. Given the changing focus on the global energy crisis, nuclear energy is being increasingly recognised as the sustainable solution to incorporate into solving the world's energy issues. Australian society appears to be shifting its thinking towards the realisation that nuclear energy must be incorporated into an energy mix in order to help decarbonise the nation's economy at a realistic and reasonable cost.

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2021 Yanrey Uranium Project - Exploration Update

Cauldron first trialled the Tromino-based passive seismic system (or passive seismic) in June 2016, with an orientation survey over Bennet Well. Passive seismic had just been introduced to the Australian Minerals industry and was thus a novel and innovative exploration tool. This geophysical survey method was employed by Cauldron in an attempt to map the topographic surface of the granite basement underlying the palaeochannel. Geological understanding of basement dynamics considerably increases the probability of exploration success, and the efficacy of smarter exploration target generation.

The passive seismic system measures the earth's naturally-occurringmicro-vibrations (seismic waves) at each station site. An acoustic impedance contrast exists at the geological contact between the soft overlying channel sediments and underlying hard-rock basement and is represented by the separation of the horizontal and vertical recording components, referred to as the H/V peak frequency (Figure 2). The peak frequency provides a numerical value that is inversely proportional to the thickness of the cover sediments. This value can then be numerically modelled to provide a corresponding depth to the contact (i.e., "depth to basement). With the collection of enough data, a map can be produced to show the topographic surface of the basement (or base of the palaeochannel) which is a fundamental input to the exploration model used to predict sites of likely uranium accumulation.

The 2016 orientation survey (Figure 3) revealed that:

1. the topographic surface of the basement sequence (i.e., the base of the mineralised palaeochannel) can be mapped to relatively high accuracy at a fraction of the cost of a conventional geophysical survey.
2. an inexpensive, non-drilling, technique can be used to expand the exploration model and generate drill targets in areas both proximal to Bennet Well and previously unexplored, more distal locations.
3. this same inexpensive, non-invasive, technique can also be used to establish an important parameter of the hydrogeological framework of the deposit.
4. survey designs can be flexible in order to delineate areas in which uranium mineralisation is currently unknown but prospectivity remains. Target prospectivity is based on historical exploration work completed to date and untested anomalies from reprocessed geoscientific datasets.

Results from the orientation survey allowed significant improvement of the lithological framework for the Bennet Well Deposit by incorporating basement topographic data from sparsely explored areas. The lithological framework provides the basis for hydrogeological modelling. This is fundamental to understanding groundwater fluid flow, in general, and mining-fluid flow from potential In-Situ Recovery (ISR) type mining, in particular. Hydrogeological modelling work will also help to optimise the design of future Field Leach Tests (FLT) and de-risk environmental impacts of potential mining operations in the region. It is hoped this will occur when the Western Australian Labour government finally realises the economic importance of the currently under-valued uranium assets existing within its own State.

In March 2020, Cauldron re-acquired Exploration Licence E08/3088 (Flagstaff), which is situated approximately 10 kilometres to the northwest of Bennet Well. Based on the success of the 2016 and 2017 deposit- and later regional-scale passive seismic, the Company planned additional surveys over Flagstaff. Using the existing systems-style exploration model, Cauldron designed a tenement-wide survey to map the base of the palaeochannel system in a poorly explored area northwest of its flagship deposit.

In 2021, Cauldron engaged independent geophysical consultants, Resource Potentials Pty Ltd (Resource Potentials, Perth), to complete data acquisition and processing using the Tromino-based passive seismic system. Surveys initially began in April 2021 however, due to unusually intense, out-of-season, weather systems, rainfall during the year has been highly excessive. The Resource Potentials field crew were forced to temporarily cease the surveys until the ground dried out and access was regained. Despite this obstacle, and with the added assistance of another independent consultancy, Atlas Geophysics Pty Ltd (Atlas Geophysics), the surveys could be completed quickly and within budget by early November 2021.

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Figure 2: Example H/V peak frequency plot from 2016 passive seismic surveys (Bennet Well)

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A total of 345 stations, spaced 200m apart, were surveyed by Atlas Geophysics on 7 lines of 3,200m spacings (Figure 4). Resource Potentials are completing the final processing of these data at the time of writing. Results from the new surveys reveal:

1. a regional widening of the palaeochannel system to the northwest of Bennet Well,
2. an unusual structural complexity in the basement, which affects the formation of the younger, erosional palaeochannel system (Figure 5),
3. potential structural features for the upwards transport of reducing fluids into the overlying palaeochannel sediments,
4. the existence of potential "trap" sites for the likely accumulation of economic uranium mineralisation.

Figure 4: Location of the 2021 passive seismic surveys at the Flagstaff Prospect