Alligator Energy : Geophysics assessment triggers Big Lake Project acquisition

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ASX Announcement

16 December 2021

Geophysical EM data assessment triggers

purchase of Big Lake Uranium Project

Key Highlights

• Airborne EM interpretation reveals promising palaeochannel systems within Tertiary Lake Eyre Basin at Big Lake Uranium Project (EL6367), South Australia
• Preliminary assessment of public domain seismic supports this and also shows significant opportunity to guide exploration for potential ISR uranium in the Cooper Basin
• This geophysical investigative work was partially supported through the Accelerated Discovery Initiative (ADI) by the SA Department for Energy and Mining
• Data supports targeting of broader levels of stratigraphy analogous with the Chu-Sarysu Basin in Kazakhstan, which produced 42% of world's mined uranium in 2020
• Detailed assessment and integration of various data sets into a 3D model is being initiated
• Funding committed by Alligator for maiden aircore and mud rotary drillhole programs targeted to commence Q2 2022
• Alligator has issued an Acquisition Notice and finalised the Contract of Sale for the purchase of EL6367 as per the Farm-in and Share Sale Agreement Heads of Agreement with the shareholders of Big Lake Uranium Pty Ltd (BLU) announced on 5 December 2019
• Acquisition will compliment Alligator's Uranium Project portfolio with significant future exploration potential aiming to define a new Uranium Province.

Alligator Energy (ASX: AGE, 'Alligator' or 'the Company') is pleased to announce that it is sufficiently satisfied with geophysical data interpretation and desktop data reviews of the Big Lake Uranium project to commit funding for a significant maiden drilling program targeted for Q2 2022. This program will be staged aircore and mud rotary, testing targets in both the Tertiary and Cretaceous basin sediments. Drill locations will be guided by the upcoming results of 3D integration model of geophysical, seismic and well log data, as well as historic uranium intersections viewed with a holistic "roll front" model.

While all greenfields exploration is ultimately an evaluated risk / reward opportunity, the interpretation of various geophysical and historic drilling data by Alligator (including the presence of uranium in the system) supports the Company's contention that the Big Lake Project in the Cooper Basin, South Australia, has bona fide uranium exploration potential.

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Broad continuous palaeochannel systems have been identified in recently-acquired airborne electromagnetics ("EM") and these are also evident in public domain seismic data emanating from the petroleum industry. The seismic also resolves to deeper levels of Cretaceous stratigraphy where potential uranium traps are also evident, broadening the prospectivity of the project. The geological setting and scale are analogous in many respects with the giant Chu-Sarysu Basin Uranium Province in Kazakhstan, as initially prognosed by the current BLU owners and Alligator. Over 40% of the world's mined uranium comes from this province, exclusively via the In Situ Recovery ("ISR") method, which is currently the dominant means of uranium extraction globally. The principal hosts of uranium at the Beverley and Honeymoon Deposits, the Eyre and Namba Formations, are the principal shallower targets at Big Lake.

On the basis of these observations, Alligator has finalised the acquisition of the Big Lake Project under the terms of the Farm-in and Share Sale Agreement (Agreement) announced on 5 December 2019 and the extension of the Earn-in Period approved by shareholders at an EGM on 29 June 2021. This will bring the Project under Alligator ownership adding to the Company's growing uranium portfolio. Under the terms of the Agreement, Alligator will now acquire all of the shares in Big Lake Pty Ltd, the holder of the 100% owned licence EL 6367 through the conversion of 30,000,000 Acquisition Performance Shares to fully paid ordinary shares in the Company. The issue of the Acquisition Performance Shares was approved by Shareholders at the 26 November 2019 AGM.

Greg Hall, Alligator CEO, said: "This is an exciting time for Alligator in being able to acquire the Big Lake Uranium Project after our initial and somewhat delayed investigation work. The extensive and detailed airborne EM survey, combined with the innovative use of public seismic data and the known presence of uranium in the system, has supported our view of the uranium potential over the Big Lake tenement. This acquisition still represents very good value for a prospective uranium exploration region, with known uranium presence, in light of recent uranium exploration project market valuations as indicated through recent IPOs."

Background and Technical Description

The Big Lake Project concept targets the margins of deep-seated dome structures associated with known oil and gas reservoirs within the Cooper Basin of South Australia (Figure 1). REDOX- controlled "roll front" uranium mineralisation is being targeted within sedimentary sandstone units primarily of the Lake Eyre and Namba Formations, sourced from distal U-rich source rocks transported as oxidised fluids through palaeochannels. The original uranium source rocks are represented by the highly radiogenic Big Lake Granite suite, recognised initially in seismic data and later intersected in petroleum wells. These granites not only supplied the uranium into the sedimentary basin, they have also acted as a heat source to stimulate and maintain fluid flow, as well as drive isostatic neotectonics in the region. Hydrocarbons generated in the lower part of the basin have transgressed stratigraphy and leaked into the upper parts of the basin system to enable chemical reduction of uranium from the basinal fluids above. These are all considered primary prerequisites to a functional roll front uranium mineral system.

The best analogue for Big Lake is the Chu-Sarysu Basin (Province) in Kazakhstan, which hosts dozens of highly productive uranium deposits, all of which are exploited via ISR methods. This province currently produces over 40% of the worlds uranium and does so in the lowest production cost quartile. The stratigraphy of the Chu-Sarysu Basin mirrors the Cooper-Eromanga-Lake Eyre Basins in many respects. While many Australian ISR deposits lie in the younger geologic units, the dominant host in Kazakhstan is in the Cretaceous. Both provinces are active petroleum producing

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basins and both exhibit broad zones of oxidised (red-brown) and reduced (green-grey) sands. The Cooper Basin Province has received very little uranium exploration and hence is very immature in that respect, despite the obvious comparisons with the Chu-Sarysu Basin.

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Figure 1. Location of BLU Project in South Australia and existing uranium deposits.

Similarly, the targets sought at Big Lake are comparable to those at Beverley, where mobile hydrocarbons are likely to have been the major catalyst for uranium deposition (Figure 2). Other analogues are West Texas and Wyoming, which are also co-producing ISR uranium and oil/gas.

Figure 2. Diagrammatic section (not to scale) of sandstone hosted roll front uranium system, where uranium is sourced within the basin and is precipitated along roll fronts where hydrocarbons leak from underlying petroleum traps (source: Jaireth et al, 2008)

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Demonstration that uranium is in the groundwater system at Big Lake and has moved along aquifers is the presence of radiometric "tails" in historic oil and gas drill logs, complimented by narrow but highly anomalous uranium in assays in drill cores, including 0.4m @ 329 ppm U3O8 (refer ASX 16/10/2019). This is especially significant given that only a small proportion of historic holes have been gamma logged or assayed in the fertile stratigraphic interval. The accompanying sands are oxidised indicating that uranium fluids have passed, and the responsible roll front is lateral to the drill hole. Beyond these sites the sands are reduced. Exploration will be focussed on locating these migrated roll fronts and will be fundamentally guided by the 3D sedimentary architecture that Alligator now begins to build. Fortunately for the company, there is a plethora of historic data available to build this model, including: airborne EM that Alligator has acquired over the project area (refer ASX 4/6/2021); over 50 lines of 2D seismic and large coverage of 3D seismic acquired by petroleum companies over the last 30 years and that is available in the public domain; and drill hole data acquired by both the petroleum and minerals companies.

Preliminary interpretation of the Airborne EM has highlighted several large sinuous conductive features interpreted as potential palaeochannel systems that meander throughout the licence (Figure 3). Initially EM profiles were correlated with historic drilling demonstrating a strong affiliation of conductive horizons with historically logged sand units. Referencing analogous palaeochannel systems of the Eyre and Namba Formations such as Beverley, Gould's Dam and Honeymoon, it has been inferred these conductive sand horizons relate to saline groundwaters passing through subsurface palaeodrainage systems in which roll front and REDOX uranium mineral occurrences can develop.

Figure 3. Regional colour stretch of the Big Lake WB_MGA54_Con021_doi_gm_097.8-113.0m.grd

with interpreted channel pathways.

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While Figure 3 shows planar conductive traces, 3D modelling of potential channel systems has commenced as shown below in Figures 4 and 5. Through analysing individual sections and tracing conductive EM responses several conductors with channel style morphologies have been identified, shown best in Figure 4. This section shows a potential meandering system having developed large channel profiles (1) with inferred narrow tributaries in the north (3) through a broadening channel (2) into a large U-shaped channel with similar dimensions to those observed at Gould's Dam and Honeymoon. Whilst this remains an early-stage interpretation, confirmation of saline groundwaters and continued modelling will remain ongoing to delineate key targets.

Figure 4. L303301 southern section A-A' channel interpretation looking east on 1D conductivity (5x

vertical exaggeration)

Figure 5. Initial interpretations and modelling of EM sections

A 2D seismic re-processing program was also piloted to investigate the shallow (<500m) profiles of publicly available 2D seismic data, which was collected by petroleum companies to exclusively explore for oil and gas in reservoirs over 2000m below surface. This pilot program was able to resolve

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