Cauldron Energy : Quarterly Activities Report and Appendix 5B

Quarterly Report for Period Ended 30 September 2017

26 October 2017

QUARTERLY REPORT - 30 SEPTEMBER 2017

Please find attached the Quarterly Activities Report and Appendix 5B for the period ended 30 September 2017.

Yours faithfully,

Tony Sage Executive Chairman Cauldron Energy Limited Cauldron Energy Ltd ABN 22 102 912 783 ASX Code CXU 329,289,708 shares

20,000,000 unlisted options

Board of Directors

Tony Sage Executive Chairman

Qiu Derong

Non-Executive Director

Judy Li

Non-Executive Director

Nicholas Sage

Non-Executive Director

Chenchong Zhou

Non-Executive Director

Management

Catherine Grant-Edwards Company Secretary

Jess Oram Exploration Manager

32 Harrogate Street, West Leederville WA 6007 | PO Box 1385 West Leederville WA 6901 | PHONE [phone] | FAX [phone]

www.cauldronenergy.com.au

HIGHLIGHTS

CORPORATE

• Annual General Meeting to be held 23 November 2017

• CXU succeeds in Court of Appeal legal challenge from Forrest & Forrest Pty Ltd

  EXPLORATION & PROJECTS

• Yanrey Uranium Project

  • The second passive seismic program ended in the middle of the September quarter, with interesting results returned for areas immediately surrounding the Bennet Well Deposit

  • Validation of all passive seismic data collected was undertaken in the second half of the September quarter

  • Incorporation of the passive seismic data into the project-wide exploration model

  • A desktop review of all historical work conducted around the Boolaloo and Yanrey Project areas was commenced in the June quarter and continued through the September quarter

Cauldron Energy Ltd (Cauldron or the Company) is pleased to present its Quarterly Activities Report for the period ended 30 September 2017.

CORPORATE ACTIVITIES

Annual General Meeting

The Company's Annual General Meeting (AGM) will be held 23 November 2017 at 9:00am. For more information, refer to the Notice of AGM as dispatched to all shareholders and available via the Company's website at www.cauldronenergy.com.au.

CXU succeeds in Court of Appeal legal challenge from Forrest & Forrest Pty Ltd

The Company refers to its announcements made on:

• 29 August 2016 that the Supreme Court of Western Australia dismissed the application for judicial review by Forrest & Forrest Pty Ltd (Forrest) of the decision of the Minister for Mines and Petroleum to progress the Company's applications for E08/2385, E08/2386 and E08/2387 through the determination processes under the Mining Act 1978 and Native Title Act 1993; and

• 16 September 2016 that Forrest lodged an appeal against this decision in the Western Australian Supreme Court, Court of Appeal.

During the quarter, the Court of Appeal handed down its unanimous decision today in favour of the Company. The Court of Appeal dismissed Forrest's appeal and ordered Forrest to pay the Company's legal costs of the appeal.

Cash at 30 September 2017

Cash available to the Company at the end of the September 2017 quarter was $2.6 million.

EXPLORATION ACTIVITES: AUSTRALIA

In Australia, Cauldron has two project areas (Figure 1) covering more than 2,300 km2 in Western Australia. Projects include:

• Yanrey Project (Yanrey) in Western Australia comprises 12 granted exploration licences (1,280 km2) and 7 applications for exploration licences (913 km2). Yanrey is prospective for large sedimentary-hosted uranium deposits.

• Boolaloo Project (Boolaloo) in Western Australia comprises two granted exploration licences (104 km2) prospective for gold mineralisation.

Figure 1: Major Project Locations in Australia

BENNET WELL (YANREY REGION)

The mineralisation at Bennet Well is a shallow accumulation of uranium hosted in unconsolidated sands (less than 100 m downhole depth) in Cretaceous sedimentary units of the North Carnarvon Basin.

The Bennet Well deposit is comprised of four spatially separate deposits; namely Bennet Well East, Bennet Well Central, Bennet Well South and Bennet Well Channel.

Work completed during the quarter comprised validation of all passive seismic data collected and incorporation of that data into the exploration model.

Passive Seismic Work

The second phase passive seismic program commenced in the June quarter was ended in the middle of the September quarter. The survey had been designed using a combination of results from the 2016 survey and regional-scale, airborne electromagnetic (EM) and magnetic data. Figure 3 provides a plan view of the proposed survey. Passive seismic survey lines were designed for the Bennet Well Deposit as infill and extension to those completed in 2016. The northern part of the deposit-scale survey was completed during the September quarter.

The passive seismic data derives accurate depth to basement, which is a fundamental input to the exploration model used to predict sites of likely accumulation of uranium. These areas may then be scheduled for later scout exploration drill testing.

The resulting data was incorporated into the project-scale, ever-developing, and evolving, systemic exploration model.

YANREY PROJECT

The Yanrey Project comprises a collection of twelve exploration tenements in northwest 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. Cauldron continued passive seismic surveying in areas distal to Bennet Well, within the greater Yanrey Project region. New survey lines were planned in addition to those not completed during the 2016 field season, in areas both to the north and south of the Bennet Well Deposit. Some of these areas were completed during the September quarter. Results highlighted:

1. significant deepening of the basement to the northwest, and north-northwest, of the Bennet Well Deposit, confirming the current exploration model which involves the strong influence of regional-scale fault structures on the formation of basement depressions (i.e. palaeochannels);

2. shallow basement to the southeast of the currently delineated Bennet Well Channel, however there also appear to be two narrow areas of depression orientated northwest-southeast, near the southern boundary of tenement E08/2774;

3. two minor areas of basement depression in the southern-most part of the Yanrey tenement package, on exploration licences E08/2478 and E08/2480. The suggested strike of these southern targets is north-northwest/south- southeast.

The interpretation and analysis of the passive seismic data will assist in generating prospective drilling targets for potential exploration follow-up.