Cauldron Energy : Quarterly Report Jan 2022

ASX Announcement

31 January 2022

QUARTERLY REPORT - QUARTER ENDED 31 DECEMBER 2021

Please find attached the Quarterly Activities Report and Appendix 5B for the three-month period ended 31 December 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: [phone]www.cauldronenergy.com.au

HIGHLIGHTS

EXPLORATION & PROJECTS Blackwood Gold Project

During this Quarter:

• o To improve access to drilling areas, it has been necessary to secure the Tyrconnel / Annie Laurie Reef junction.

• o The Blackwood team have worked tirelessly to establish the underground infrastructure and ground support necessary for the drilling program. This work was impacted by COVID related travel restrictions limiting labour availability and delaying receipt of critical supplies.

• o Despite the challenges, work was completed just prior to Christmas allowing drilling to recommence on 22 December 2021. The drilling program is underway with pauses necessary for driller availability which continues to be a challenge.

• o To enable continued exploration, the Company has applied for a Prospectors Licence (PL7763) over the Annie Laurie and Grace Egerton areas. This application has now been accepted by the Victorian Earth Resources Regulation division (ERR) of the Department of Jobs, Precincts and Regions (DJPR).

• o Coincidentally, additional historic reports were discovered documenting a population explosion alongside the mining of shallow bonanza gold grades from the Western Reef system.

• o Strong structural complexities produced mineralisation reportedly up to 9 metres in width and grades of up to 920 g/t Au (from Mine Reports at the Sultan Mine).

• o Unlike Bendigo and Ballarat with similar depth potential, Blackwood's mineralisation potential was never followed up at depth, leaving multiple unexplored areas down-dip and down-plunge of these exceptional gold grades.

• o New, high-quality targets can be accessed from within the northern Tyrconnel Adit drive, thus enabling low-impact drilling activities.

• o New LiDAR survey data acquired from the State Government of Victoria for the Blackwood area. Data analysis and review commenced at the end of the Quarter.

Future Activities

• o The current proposed plan/timing of further work is as follows:

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

  • ➢ Analysis of LiDAR data to continue for the identification of surface features such as surface workings and fault structures.

  • ➢ These data will allow the ground-proofing and validation of historical information and provide an additional tool for adjusting the design of current underground drilling.

  • ➢ Now that access has been established, drilling activities can start to benefit from the comprehensive data compilation and LiDAR analysis.

  • ➢ This continues the advancement of the project in testing the conceptual model of the south-plunging gold reefs promoted in the various mining periods since the 1860s.

  • ➢ Cauldron's Exploration Manager to mobilize to Blackwood in the next Quarter (Q1 2022) to position wider, more regional exploration plans at Blackwood.

Background

• o The Blackwood Goldfield project is located southeast of Daylesford, in the highly prospective Central Victorian Goldfields within which both Ballarat and Bendigo are also situated.

• 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 Review of historical data has identified multiple high-priority targets for immediate testing.

• 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 - considered a very promising sign as it confirms that initial interpretations of the position of historical high-grade zones were accurate.

• o The historical database compilation and review initiated during Project acquisition was revisited in 2021 with the addition of the new drilling data.

• o A schematic long section of the Western Reef mines was compiled showing historically reported fractured vein systems of up to 9m in thickness, containing grades of up to 920 g/t gold (Au) within the Western Reef system.

• o In order to visually represent the undiscovered potential of the Blackwood Goldfield, the averaged depth of mining from Blackwood was used to normalize current production figures from operational goldfields such as Ballarat and Bendigo, to show the estimated production comparison at similar shallow depths.

• o Results strongly suggest that the Blackwood Goldfield holds far more remaining potential for the same level of bonanza grades and tonnages as its neighbours in the surrounding region.

Yanrey Uranium Project

During this Quarter

• o The Company released the results of its passive seismic program conducted over its Flagstaff tenement (E08/3088).

• o The surveys highlighted multiple new targets over areas of unusual basement complexity. This structural information will assist in further developing the systems-style exploration model.

• o Passive seismic was first trialled by Cauldron at the Bennet Well Uranium Deposit (Bennet Well) in 2016, as part of a new, smarter, multi-faceted, exploration strategy.

• o Successful results from 2016 were key to improving the predictive, systems-style exploration model for Bennet Well/Yanrey.

• o Bennet Well has already been shown to have the right physical characteristics for low-cost extraction via In-Situ Recovery (ISR) mining (CSIRO 2017).

• o Cauldron reinforces the Yanrey region as an emerging uranium province, containing potentially significant, as-yet undiscovered, economic uranium resources.

1 Source: Report titled "The Gold Mines of Blackwood" prepared by Erik Norum, Consultant Geologist, August 2018

• o Uranium spot price finished the quarter marginally lower at US$43.62/lb (30 September 2021: US$44.11/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$44.85/lb as at the date of this report (Source: Trading Economics).

• o According to a recent article published on INN the rise in the uranium spot price in the past four months is being fuelled by concerns over supply shortages, and expectations of increasing demand due to the world's increasing drive to decarbonise. The article cites that 64% of the world's electricity is currently generated from the burning of fossil fuels with nuclear accounting for just 10 percent of electricity production, the second largest source of carbon-free power. The article also reports that there are currently 50 new nuclear reactors under construction, the majority being erected in China.

Future Activities

• o Cauldron to plan and undertake further passive seismic work over a selection of tenements.

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 domains; 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 substantive work on the mineralisation since the Mineral Resource was published in 2015.

• o This has been entirely due to the lack of Departmental approval for programs put forward since the WA State Government election of March 2017 and the corresponding ban on uranium mining in June 2017.

• 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.

WA Sands Project

During this Quarter

• o The Company received several expressions of interest for sand supply which it is currently working through. Shareholders will be updated if and when discussions result in a formal commitment being received.

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 Gascoyne (Carnarvon) and Ashburton (Onslow), and Fitzroy (Derby)Rivers in northern Western Australia, collectively covering an area of about 286 km2.

• o As at the date of this report, 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 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, Buurabalayji Thalanyji Aboriginal Corporation (BTAC), in

  Onslow's industrial zone to house the Mobile Concrete Batching Plant.

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 29 October 2021, the Company released its annual report, a copy of which is available on the Company's website.

• o On 16 December 2021, the Company despatched its notice of annual general meeting to shareholders. The Annual general meeting took place on 25 January 2022 with all resolutions being passed in favour. For full results refer ASX announcement of 25 January 2022 titled 'Results of Annual General Meeting'.

Cash Position

• o As at 31 December 2021, Cauldron had circa $0.7 million cash at bank (30 September 2021: $1.5M).

• o In addition, the Company holds a portfolio of shares in other ASX listed entities valued at approximately $0.65 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.

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