Calidus Resources reported on the significant progress that has been made at the Warrawoona Gold Project (WGP) during the September quarter. The ramp-up towards steady state production at WGP continued during the period, with the 2.4Mtpa processing plant achieving nameplate capacity and the LNG power station commssioned and fully integrated into operations. These key milestones were achieved despite challenges stemming from a labour shortage, including the impact of two major COVID outbreaks that occurred during the quarter.

Consequentially, material movement and ore production were restricted due to a large number of critical operational workers required to isolate under the WA Government mandatory isolation requirements. With the processing plant's high throughput and recovery rates, mining movement normalising and removal of regulatory COVID isolation requirements, WGP is on track for a strong December quarter. Mining and Processing Plant: The processing plant is now operating at or above nameplate capacity with a recent peak of 330tph (equivalent to 2.64Mtpa) achieved against nameplate of 300tph (2.4Mtpa).

Gold recovery remains exceptionally high, averaging 98% for the quarter, 3% above Feasibility Study expectations. Total mill throughput throughout the quarter was 525,705t at 0.78g/t. The mill feed during the quarter was adversely impacted as result of COVID-19 related workforce disruptions that restricted ore tonnages to the processing plant and subsequently resulted in: Lowering of the head grade material feed to the mill Increased stockpile depletion The ROM cut-off grade lowered to 0.4g/t A total of 12,657oz of gold was poured during the quarter with 1,380oz of additional gold in circuit. Geology: A further 14,493m of RC grade control drilling was completed during the quarter, with an additional 20,000m planned for the remainder of 2022.

In the 4 months to date, the grade control model reconcilation to the resource model grade is 100% with a 13% reduction in ore tonnes. The reduction in tonnage is attributable to the exclusion of lower confidence ore blocks away from the main ore zone and it is expected that silghtly increased mining rates will make up for any lower ore tonnes predicted by the grade control to date. Mill head grade and reconciled gold output was lower than the diluted grade control model predicted (0.78g/t v 1.01g/t).

This is under review and is believed to be attributable to a combination of blasting and mining practices that are subject to a continuous improvement programme. These practices resulted in unexpected ore loss and dilution to that modelled in the Feasibility Study. To improve mine to mill reconcilation, Calidus has implemented the following initiatives: An external grade control specialist has been mobilised to site to review grade control and mining practices, and has suggested changes to the current system that are being implemented; An external blasting specialist has been mobilised to site to review blasting practices and assist with training staff; A 3D blast monitoring system has been implemented to better predict ore block positions and grade post blast; Additional geologists and pit technicians will be employed to ensure these extra initiatives can be fully covered; and A Calidus Mining Superintendent responsible for ensuring quality mining practices has commenced.