Cradle moves into renewable energy sector with proposed geothermal acquisition

Cradle Resources Limited ('Cradle' or the 'Company') has entered into a binding agreement to acquire Volt Geothermal Pty Ltd ('Volt') and Within Energy Pty Ltd ('Within'), with geothermal assets in Queensland and South Australia (the Projects).

Geothermal energy is widely used throughout the world and is one of the only renewable energy solutions capable of operating continuously irrespective of the weather conditions. The proposed Managing Director of the Company will be Matt Kay, an equity holder in both Volt and Within and the former Managing Director of ASX 200 company Beach Energy Limited (ASX:BPT).

Highlights The Company is transitioning into the renewable energy sectors, by signing a binding agreement to acquire 84% of all the issued shares in Volt Geothermal Pty Ltd ('Volt') and Within Energy Pty Ltd ('Within') o Consideration for the acquisition is 220,360,329 Cradle shares Geothermal energy is a renewable energy solution that creates energy from heat sourced from within the earth. Unlike other renewable energy sources, geothermal energy is available 24 hours per day The Australian Government has set a renewable energy target of 82% by 2030. Renewable energy accounted for 35.9% of country's total electricity generation in 2022 The Projects comprise of prospective geothermal exploration licences in South Australia and Queensland. These areas are surrounded by key existing infrastructure for electricity generation, including powerlines and sub power stations Cradle plans to undertake a capital raise of $6 million to fund the Projects work programme and for working capital purposes, subject to shareholder approval for the transaction o Prior to the re-listing, the Company has succussfully rasied $850,000 at $0.02 per share. These funds will be used to complete the transaction As part of the transition into the energy sector, the Company will appoint Mr Matt Kay as Managing Director and Dr Trey Meckel as Head of Subsurface o Mr Kay is a seasoned energy industry executive with more than 30 years of experience, most recently as Managing Director of Beach Energy, an AX 200 company o Dr Meckel is a senior geologist with more than 30 years of experience in the global energy sector. He is Secretary of the Australian Geothermal Association and a Global Ambassador for the Geothermal Energy Advancement Association The Company's securities will remain suspended until after shareholder approval has been obtained and the Company re-complies with Chapters 1 and 2 of the ASX Listing Rules as an energy company

Cradle plans to focus on systematically exploring early-stage geothermal targets and developing geothermal resources. This will involve a fit-for-purpose exploration programme analysing subsurface geology to identify thermal resource potential at different well depths, undertaking preliminary survey and resource assessments based on offset well data, exploration location definition and exploration drilling. This will determine priority targets for exploration drilling for geothermal resources.

The Company's strategy is to follow a typical path for the maturation of an exploration play through the Exploration and appraisal activities to confirm existence of the resource and demonstrate the commercial viability; Study work such as pre-feasibility and definitive feasibility as part of the commercialisation of the resource and Project development which involves drilling of production wells and installation of surface facilities for delivery of energy to market.

Success with the strategy outlined above will determine future exploration and funding programsto advance the projects being acquired. The proposed acquisition will be the platform on which the Company grows its resource base, with the strategy to participate in the significant growth opportunities in the renewable energy industry via a focus on geothermal opportunities, given its unique ability to provide a base-load alternative that produces energy 24/7. Geothermal energy therefore plays an important role in the future energy transition towards zero carbon emissions given its ability to provide system's security and reliability. The Company is proposing to acquire geothermal projects in South Australia and Queensland (collectively the 'Projects'). Cradle intends to explore and exploit geothermal energy for the purpose of generating renewable energy to be connected to regional electricity grids or supporting standalone developments. The Projects comprise highly prospective geothermal exploration licences with significant discovered resources in South Australia at G1 + G2 (P50) of 5.2PJth and potential future developments in the discovered area of G1 + G2 of 842 PJth. Prospective Resources in exploration areas U50 (G4.1 + G4.2) is estimated at 235,102 PJth classified in accordance with UNFC Geothermal Specifications1 . For reference, a 10MW plant would require approximately 1.5 PJth of geothermal resource per annum. Geothermal energy is a carbon neutral renewable energy from the natural source of heat contained within the earth. It can be extracted for uses including heating, drying and electrical generation. Unlike other renewable energy sources, geothermal energy is available 24 hours per day. The geothermal energy industry has a more than 100-year history and is used for electricity generation across 30 countries. Given Australia's historical abundant supply of fossil fuels, there have been limited attempts to develop a geothermal energy industry in Australia. Cradle will apply proven technology which has become widely adopted over the last few years with the use of binary cycle systems which can use lower temperature reservoir water of between 80-180-degreeC via a heat exchanger process to operate a turbine in a closed loop. Binary cycle geothermal plants have been operating for over 70 years. Binary cycle power plants are most suited to Australia's low fluid temperature

Technology which has become widely adopted over the last few years is the Binary Cycle System, which uses much lower reservoir temperature water of between 80-180-degreeC via a heat exchanger process to operate a turbine in a closed loop. Binary cycle geothermal plants have been operating for over 70 years5 , with the first plant constructed in Italy in 1940. There are more than 150 binary cycle plants operating worldwide. The major developers include Turkey, Europe and the US. The US has 93 binary plants in operation, and this represents >90% of geothermal capacity added since 2010. Volt/Within have had discussions with contractors from these regions to bring developed knowledge, skills and experience to Australia. The Company is also assessing closed loop systems that circulate fluids within the well bore rather than extracting reservoir fluids. In the binary cycle system, warm geothermal water is pumped to the surface and passed through a heat exchanger that contains a fluid such as a butane or pentane hydrocarbon with a much lower boiling point than water. The heat from the geothermal water causes this secondary or 'binary' fluid to flash into vapor. The vapor created by heating the pentane is what spins the turbine powering the generator, while the cooled steam from the geothermal source is injected back into the formation where it heats up again and is available to eventually re-circulate through the heat exchanger.

Competent Persons Statement

The information in this release that relates to resource estimates through the mapping of prospective areas and gross rock volumes, review of reservoir temperature and properties of rock formations, pore fluids and fracture systems within the metasediments and basement rocks of WITHIN Energy's South Australian assets is based on analysis of data provided by WITHIN and sourced from open-domain databases. These analyses have been performed by Dr. Arnout JW Everts who holds a PhD in Geology from VU University Amsterdam and has 32 years of industry experience and a proven track record of technical leadership, project management, and technical task and project delivery. His areas of expertise include techno-commercial project due-diligence, field (re)development, oil & gas reserve and resource assessments and geothermal resources and exploitation viability. Through his career, Dr Everts has participated in and/or led over 100 energy projects spanning the entire project lifecycle, from frontier exploration to late field-life including unconventionals. In recent years his focus has shifted to renewables, mostly geothermal. Dr Everts is an Active Member of AAPG (American Association of Petroleum Geologists), EAGE (European Association of Geoscientists and Engineers) and GSM (Geological Society of Malaysia), a Professional Member of AGA (Australian Geothermal Association) and he has contributed as lead author or co-author to around 30 research papers and extended abstracts in international scientific journals. As EuroGeologist title holder (registration no 1435) Dr Everts is entitled to sign off on Company Reserves and Resources reports submitted to regulatory bodies. Dr. Everts has consented in writing to the inclusion in this release to the matters based on his information in the form and context in which it appears. Dr. Everts is engaged by WITHIN as an independent consultant and is not employed by the Company.

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