Cauldron Energy : Quarterly Report Oct 2021

ASX Announcement

26 October 2021

QUARTERLY REPORT - QUARTER ENDED 30 SEPTEMBER 2021

Please find attached the Quarterly Activities Report and Appendix 5B for the three-month period ended 30 September 2021.

Yours faithfully,

Simon Youds Executive Chairman Cauldron Energy Limited

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 DirectorChenchong Zhou Non-executive DirectorMichael Fry CFO/Company Secretary

Unit 47, Level 1, 1008 Wellington Street, West Perth WA 6005 | PO Box 1024 West Leederville WA 6901 | Phone/Fax: +61 8 6117 3860www.cauldronenergy.com.au

HIGHLIGHTS

EXPLORATION & PROJECTS

Blackwood Gold Project

During this Quarter:

• o In early July, Cauldron appointed Mark Burdett, a highly experienced and technically accomplished geologist, specialising in structural geology, to manage and guide the exploration activities at Blackwood.

• o In mid-August, Cauldron commenced drilling at Blackwood following establishment of site operations and mobilization of personnel and equipment to site.

• o The first two diamond drill-holes targeted a highly exciting area adjacent to the Annie Laurie reef. Interpretation of this significant new target area results from a comprehensive technical review of all available historical reports.

• o Both holes intersected a historically mined void, believed to be a fault structure - this is a very promising sign confirming that initial interpretations of historical high-grade zone locations were accurate.

• o To improve access to these drilling areas, it has been necessary to secure the Tyrconnel / Annie Laurie reef junction earlier than planned.

• o The Company's personnel are in the process of establishing the underground infrastructure and required ground support to enable drilling to recommence.

• o Work at site has continued unabated despite recent high rainfall, localised earthquake and COVID lockdowns but access to consumables and suitably experienced personnel has hindered ground support operations.

• o The Company estimates the completion of ground support works by mid-November.

Future Activities

• o The current proposed plan/timing of further work is as follows: ➢ Continuation with ground support to enable drilling to recommence.

  ➢ Continuation of first phase of drilling program designed to include 36 holes for ~4,800 metres.

Background

• o The Blackwood Goldfield project is located southeast of Daylesford, in the highly prospective Central Victorian Goldfields that surround Ballarat.

• o The Project covers an area of about 24 km2 and secures the most significant portion of the historic Blackwood Goldfield.

• o From 1864 to 1960, the Blackwood Goldfield produced about 218,000 ounces of gold1.

• o The Vendor of the Project has spent 25 years consolidating the leases specific to the area in question, providing a great opportunity for systematic exploration and development for the first time in recent history.

• o Multiple high-priority targets identified with plans for immediate testing.

1 Source: Report titled "The Gold Mines of Blackwood" prepared by Erik Norum, Consultant Geologist,

August 2018

2

WA Sands Project During this Quarter

• o The acquisition is partially complete, with ownership of four licences (EL08/2328, EL08/2329 and EL08/2462 and miscellaneous licence L08/71) transferred to Cauldron to date.

• o in late September, Cauldron was notified of the unsuccessful appeal made against the decision to invalidate the determination of Mining Lease Application M09/150. Cauldron since made a replacement application which passed the objection period without comment.

• o Proceedings against Cauldron, the project vendor, the Mining Registrar and the WA Minister for Mines, Industry Regulation and Safety remain ongoing with respect to Mining Lease 08/487, located at the mouth of the Ashburton River in Onslow, where a third party is opposing the transfer of Mining Lease 08/487 to Cauldron.

• o The project vendor and the Company have agreed that if the legal proceedings in relation to either MLA09/150 or ML08/487 are not concluded in favour of Cauldron or the project vendor, that they may consider an adjustment to, or replacement of, the tenement(s).

• o Cauldron has conducted sampling and physical characterisation studies of sand material from the Onslow and Carnarvon exploration licences. Results confirm that the sand contains less than 5% of fine material (clays and silts), is comprised of medium-coarse, highly angular grains of the specific type required for the production of concrete used in the construction industry.

• o A trial mix test was also undertaken with the intended local sand and aggregate inputs for the manufacture of concrete. Preliminary results show that the concrete consistently exceeded the strengths required for high strength marine grade concrete.

Background

• o In late December 2020, Cauldron announced the acquisition of a 100% ownership interest in a number of river sand tenements located at the mouths of the Carnarvon, Onslow and Derby rivers in Western Australia, collectively covering an area of about 286 km2.

• o Sand is the most consumed natural resource on the planet besides water and by far the largest globally mined commodity. It is estimated that over 40 billion tonnes of aggregate (sand and gravel) is consumed annually2.

• o The demand for construction sand, found in the beds, banks and riverplains of rivers, as well as in lakes and on the seashore, is significant and likely to outstrip supply in years to come.

• o High quality silica sand is a key ingredient in the manufacture of concrete. Additionally, the sand must be angular in shape so as to provide the necessary binding strength (through interlocking sand and aggregate grains) with the cement. The river mouth sand licences acquired by Cauldron are expected to contain high quality silica sand suitable for cement production.

• o Cauldron is seeking to establish a concrete manufacturing business with an agreement reached with Kuuwa Rentals Pty Ltd to lease its T4 Sami Mobile Concrete Batching Plant, capable of producing a range of high strength quality concrete products. Contemporaneously, Cauldron signed an initial one- year property lease with Traditional Owner, BTAC, in Onslow's industrial zone to house the Mobile

  Concrete Batching Plant.

Yanrey Uranium Project During this Quarter

• o Apart from minor recent activity at the Company's Flagstaff tenement (E08/3088), development work remains suspended pending a change in government support for mining of uranium in Western Australia.

• o Uranium spot price finished the quarter significantly higher at US$44.11/lb (30 June 2021: US$32.23/lb) having reached a 9 year high of US$50.88/lb on 17 September 2021 and has since fluctuated appreciably but is currently trading at US$47.20/lb as at the date of this report (Source: Trading Economics).

2 Source: "Why the world is running out of Sand" BBC article dated 18 November 2019, author Vince Beiser

• o According to Trading Economics the rise in the uranium spot price is as a result of a strong outlook for demand, with supply constraints expected to continue for medium term.

Future Activities

• • Resource Potentials to complete the passive seismic data collection at Flagstaff. This will occur in Q4 2021, with the survey crew remobilising to the Yanrey Project area at the time of writing this report.

• • Cauldron will incorporate the passive seismic data into the exploration model and consider follow-up work

Background

• o Yanrey is prospective for large sedimentary-hosted uranium deposits and is host to the Bennet Well Uranium Deposit.

• o The Bennet Well Uranium Deposit is comprised of four spatially separate deposits; Bennet Well East, Bennet Well Central, Bennet Well South and Bennet Well Channel.

• o The Mineral Resource (JORC 2012) estimate is:

  • ➢ Inferred Resource: 16.9 Mt at 335 ppm eU3O8 for total contained uranium-oxide of 12.5 Mlb (5,670 t) at 150 ppm cut-off;

  • ➢ Indicated Resource: 21.9 Mt at 375 ppm eU3O8 for total contained uranium-oxide of 18.1 Mlb (8,230 t) at 150 ppm cut-off;

  • ➢ total combined Mineral Resource: 38.9 Mt at 360 ppm eU3O8, for total contained uranium-oxide of 30.9 Mlb (13,990 t) at 150 ppm cut-off.

• o Cauldron has not completed any work on the mineralisation since the Mineral Resource was published in 2015.

• o 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 North Carnarvon Basin.

Project Generation

• o Cauldron remains vigilant to new project opportunities that complement the Company's project portfolio, are value accretive and have the potential to provide early cash flow. Shareholders will be informed of key developments if and when they occur.

Corporate

• o On 8 September 2021, the Company completed a placement issuing 35,294,118 new fully paid ordinary shares at 3.4 cents each raising a total of $1.2 million before costs. Participants in the placement were issued a total of 17,647,059 free attaching unlisted options which are exercisable on or before 30 November 2023, at an exercise price of $0.05. The unlisted options were issued on the basis of 1 free attaching option for every two shares subscribed for.

• o On 30 September 2021, the Company released its annual financial report to market.

• o During the quarter Ms Asha Rao, who has wide-ranging experience in both gold and uranium mineral systems across three continents, commenced employment as Exploration Manager to oversee Cauldron's Blackwood Gold Project and Yanrey Uranium Project.

Cash Position

• o As at 30 September 2021, Cauldron had circa $1.5 million cash at bank (30 June 2021: $375k).

• o In addition, the Company holds a portfolio of shares in other ASX listed entities valued at approximately $0.7 million as at the date of this report.

• o The Company can continue to divest (in part or all) of its portfolio of shares in other ASX listed entities to meet short to medium term cash requirements.

Cauldron Energy Ltd (Cauldron or the Company) is pleased to present its Quarterly Activities Report for the period ended 30 September 2021.

EXPLORATION ACTIVITES: AUSTRALIA

In Australia, Cauldron holds a 51% joint venture interest in the Blackwood Gold Project located south-east of Daylesford, in the highly prospective Central Victorian Goldfields that surround Ballarat.

In December 2020, Cauldron announced the acquisition of a 100% ownership interest in a number of river sand leases located at the mouths of the Carnarvon, Onslow and Derby rivers in Western Australia, collectively covering an area of about 286 km2. As at the date of this report, the acquisition is partially complete, with ownership of four of the eight licences having transferred to Cauldron. For further information refer following.

In addition, Cauldron owns the Yanrey Project (Yanrey) consisting of 12 granted exploration licences for a total project area of 1,270 km2 in Western Australia. Yanrey is prospective for large sedimentary-hosted uranium deposits and is host to the Bennet Well Uranium Deposit.

BLACKWOOD GOLD PROJECT

From 1864 to 1960 the Blackwood Goldfield produced about 218,000 ounces of gold from orogenic gold sources (199,000 ounces) and from placer sources (19,000 ounces).3 Gold was won from surface down to a depth of 100 m below ground level, with very little mining activity below a depth of 150 m. The Sultan mine is the deepest in the goldfield with production levels at 230 m below ground surface and its shaft reaching 274 m, and still in pay.

For detailed information on the Blackwood Gold Project and historical work performed refer Appendix B.

Work Completed During Reporting Period

In mid-August 2021, Cauldron commenced its drilling program at Blackwood Gold Project following consent received from Melbourne Water, and the Earth Resource Regulation (ERR) division of Victoria's Department of Jobs, Precincts and Regions.

The commencement of drilling followed the completion of services with over 450 metres of underground pipework having been installed providing air and water to the intended drill sites, and of the undertaking of community engagement programs aimed at outlining Cauldron's work approach and objectives. These objectives focus on Cauldron's commitment to achieving net zero carbon emissions during exploration and mining operations.

The drilling program was designed to utilise the Tyrconnel Adit and drive as a drill access point to target deeper high-grade plunges projected for the Sultana, Sultan and North Sultan prospects (Figure 1); with no impact on surface. The Tyrconnel drive runs ~1.5km east to west at approximately 100 metres below surface (Figure 2) and bisects many of the North-South striking reef systems.

3 Source: Report titled "The Gold Mines of Blackwood" prepared by Erik Norum, Consultant Geologist,

August 2018

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