Cauldron Energy : Blackwood Update - Drill Access Coincides with Visible Gold

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ASX Announcement

16 November 2021

Blackwood Gold Project Update

Drill Access Coincides with Visible Gold Sample

Highlights

• Cauldron has successfully stabilised Annie Laurie - Tyrconnel Adit intersection. Clearance work of fallen material is nearly complete.
• Progress hampered by fall of ground inside Tyrconnel Adit, caused by exceptionally wet ground after severe weather events.
• The dedication and diligence of Cauldron's team has helped to bypass this additional obstacle.
• Ground support work allows resumed targeting of highly prospective areas identified in various historical reviews.
• Visible gold observed in an area formerly excavated for access purposes only.
• Channel samples collected from this newly-exposed rise near Annie Laurie. Results will assist in geological model development and future drill design.

Cauldron Energy Limited (Cauldron or the Company) (ASX: CXU) is pleased to provide an update relating to its exploration activities at the prospective Blackwood Gold Project (Figure 1).

Ongoing ground support work at the intersection of the Tyrconnel Adit (Tyrconnel or the Adit) and Annie Laurie stope (or Annie Laurie) has progressed nicely. This is despite several delays caused by multiple severe weather events and associated, State-wide, power outages. During the clearing of fallen stope material from the Adit, the team discovered a rise adjacent to the Annie Laurie. It is believed that the rise was excavated in the 1990s purely as an access route. No mining has been undertaken within that specific area. Observations of the newly exposed rise revealed a sharp geological contact between the shale and sandstone. A coincident area of intense structural complexity is believed to be associated with the Annie Laurie Reef. Channel sampling has been conducted across this area, with a total of 22 samples collected and submitted for assay.

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 Director

Chenchong Zhou

Non-executive Director

Michael Fry

Company Secretary

WWW.CAULDRONENERGY.COM.AU

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Cauldron's Executive Chairman, Simon Youds, commented on the discovery saying: "Our initial plan was to stabilise the Annie Laurie stope and clear the Fall of Ground (FoG) blocking access to our drill sites. We did not anticipate the discovery of a new, previously unmined, section of the Annie Laurie / Tyrconnel intersection. We believe the rise was excavated in the 1990s for access purposes, and not specifically related to gold extraction. The visible gold observed, coupled with the beautiful sandstone-shalecontact and structurally complex geology, provides an exciting new target for drill testing. The sample site is close to existing access, rewarding the Company for taking the underground, low community impact, approach. The observation of visible gold further increases our confidence in the remaining mineral potential of these historical mines.

Our team at Blackwood have continued to develop collaborative relationships with the local community. This further builds on our incorporation of innovative sustainability to achieve Cauldron's unique, holistic, circular economy approach to mining. It is this innovative operational model which allows our current activities to proceed without any impact, to date, to the surrounding surface, environment or local residents. This will be continued as the work program progresses."

Figure 1: Blackwood Gold Project Location Map

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2021 Blackwood Gold Project - Program Update

Drill Site Access and Ground Support

The advantage of drilling from within the Tyrconnel Adit, is a significant reduction in risk and cost. Drilling from underground and within the existing mining tunnel system allows greater targeting accuracy of mineralisation extension. This is enabled by the exposure of the reef systems within the adits and stopes, consequently allowing smarter and more accurate drill design by way of:

• shorter drillhole lengths,
• reduced risk of missing targets due to downhole drift and
• the use of directional drilling from a single drill collar.

The overall cost of drilling operations is therefore greatly reduced. Environmental impacts are also significantly minimised as there is no requirement for surface vegetation clearance, digging of sumps or establishment of tracks and pads. The Tyrconnel Adit is approximately 1.5 kilometres in length (Figures 2 and 3)1, trending east-west and intersecting many of the north-south orientated reef systems. Multiple drill positions are thus provided from which to target the down-plunge extensions of up to 8 reef structures.

Cauldron's efforts to stabilise the Annie Laurie - Tyrconnel intersection, clear away all blockages and reestablish drill site access were further hampered by multiple severe weather systems. Resultant, State-wide, power outages between October and November 2021 added to these delays. Despite this, the reestablishment work progressed well and on schedule, keeping within the timeframe initially estimated.

Another benefit of this work is the coincident stabilisation of the surface, thus satisfying one of Cauldron's initial commitments to preserve and protect the surrounding environment. Many of the historical mine workings were excavated within 20 - 30 vertical metres from the ground surface, causing concerns within the local community. Cauldron have now been able to help reduce risk of surface subsidence with this ground stabilisation work.

Stabilisation activities will near completion once the area has been tested for its strength and integrity. This ground support work has a three-fold benefit:

1. Re-establishmentof a safe working environment for all Cauldron personnel and contractors,
2. Re-establishingaccess to Cauldron's original planned drill sites2, and
3. Stabilising the overlying ground surface against future subsidence caused by the existence of the historical stopes. It must be remembered that the extensive underground mine workings were established between the late 1800s and early 1990s, with many of the historical stopes excavated within 20 - 30 vertical metres from the ground surface. Protecting the integrity of the ground surface has always been part of Cauldron's work plan. Due to the aforementioned rainfall and aging condition of the historical ground support timbers, the timing of this work was required unexpectedly much sooner than planned.

1. Refer to ASX:CXU announcement dated 15 March 2021
2. Refer to ASX:CXU announcement dated 16 August 2021

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Figure 2: Current, known, mineralised trends within the Blackwood Gold Project, overlain on regional geology

(ExAct Geoscience, 2020)

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Figure 3: Conceptual Long Section showing interpreted mineralisation trends along the north-south trend of

mineralised reefs at Blackwood (ExAct Geoscience, 2020)

Channel Sampling

Stabilisation and clearance work in the Tyrconnel Adit coincided with the exposure of the top of a ladder rise believed to have been a mine access route sometime in the 1990s. The walls of this rise revealed an exposed geological contact between sandstone and shale units, as well as an area of high structural complexity.

An initial observation of visible gold (Figure 4) from the nearby Annie Laurie stope makes this an exciting new target for future drill testing.

A series of channel samples have now been systematically collected to test for:

1. key geochemical signatures,
2. increased geological understanding of the lithologies hosting mineralisation,
3. possible alteration characteristics that will act as additional exploration vectoring tools later in the program, and
4. any additional mineralisation potential.

Historic channel samples near this location show grades of more than 15 g/t Au in a sampling suite that appears to have been terminated in mineralisation. This suggests a hypothetical continuation of gold grades with upwards progression towards, and into, a previously untested section of the Annie Laurie Reef structure. Geochemical information gleaned from the new suite of channel samples may shed additional light on this mineral potential.

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