Krakatoa Resources Limited announced the assay results have been returned from the second phase drilling program at the Tower prospect, representing just one of many prospective clay hosted REE prospects at its 100% owned Mt Clere project located in the north-western margins of the Yilgarn Craton, Western Australia. The 100 hole air core program resulted in 12 holes being drilled at Tower West (for 412m) and 88 holes at the Tower main area (for 2,801m). Results from the recent infill and extensional drilling program at the Tower complement results from the discovery holes.

The extent of the mineralisation is now over 5km at the Tower prospect, the extent drilled to the south, while the Tower West Prospect has expanded to 3km extent of mineralisation. The core area of the Tower prospect is now covered by approximately 200m-spaced drill holes, which gives great confidence in the continuity of potentially economic mineralisation, considering the thick and flat-lying nature of the deposit. Several holes encountered the saprock closer to surface (8-15m) and typically did not carry any significant REE mineralisation.

These areas are thought to represent basement highs. Two holes failed to be drilled due to drilling conditions. While the drilling at the Tower was systematically spaced, locations for the Tower West scout drilling at this stage were based primarily on accessibility.

The holes here confirmed similar saprolitic clays as those at the Tower with the target horizon thickening to the south. Samples were collected each metre and combined into 2 to 4 metre composite samples from surface. End of hole samples composites varied from 1 to 4 metres, dependent on the depth encountered.

Majority of the holes intersected the expected bedrock of alkaline granitic and gneissic basement rocks with the pallid clay zones being well developed and having thickness from 10 to 50 plus metres. One hole encountered bedrock at 3 metres. The analytical results revealed significant levels of widespread REEs, with abundant quantities of magnetic and critical rare earth elements along the entire length drilled.

These additional drill hole assays are consistent with the initial samples results. The clay intersection of >500ppm TREO range in thickness from 3m to 32m within the current area of drilling. Zirconium although not a rare earth element, was also elevated within several zones of the regolith, with several assays higher than 1000ppm returned and an average of 458 within intervals >200ppm TREO.

Uranium and Thorium levels are low which is expected with ionic clay hosted REE deposits. They averaged 1.28ppm (U) and 25ppm (Th) respectively for >200ppm TREO intervals. The main mineralisation envelopes are interpretated to lie within the large horizontal clay saprolite layer and are open to the north, east and west.

Additional areas within the laterite caprock and within the highly weathered saprock have also shown significant REE mineralisation. The Company has validated these latest assay results and has commenced work on a maiden Mineral Resource Estimate for the Tower REE deposit, so far confined to the air core drilled area. REE mineralisation on the Tower plateau is predominantly hosted within the lower saprolite unit of the regolith profile.

The Company is happy to announce the imminent commencement of reconnaissance auger drilling on the downslope terraces to the southwest of the plateau to determine if mineralization extends into this area. The lateritic cap and upper saprolite have largely been eroded from these terraces and the company believes the REE-hosting horizon is present in this area beneath less unmineralised cover. Positive indications from the auger program will justify future aircore drilling with the potential to add considerable volume to the known extent of REE mineralisation.

Initial metallurgical diagnostic leach tests at ANSTO are still ongoing to optimise possible extraction workflows.