CAULDRON ENERGY LIMITED — Capital/Financing Update 2013

Oct 7, 2013

8 October 2013

Cauldron ’ s Uranium Grows at Yanrey

ABN 22 102 912 783

Bennet Well stands at the gateway to the ISR project pipeline

32 Harrogate Street, West Leederville WA 6007

HIGHLIGHTS

• Further high grade uranium areas intersected including 6.48m @ 602 ppm eU3O8 with grade width of 3901 ppm.m

PO Box 1385, West Leederville WA 6901

• 100% holes intersected economic uranium at Bennet Well East, South and Deep South, recovering 93.6% core

• High grade uranium intersections identified on the most northern and southern drill lines at Bennet Well South showing potential to further upgrade current resource in both directions

ASX code: CXU

159,622,605 shares 4,300,000 unlisted options

• Currently working to complete a JORC 2012 compliant revised resource upgrade once all of the core data has been obtained

Board of Directors

• Cauldron is in the process of finalising a scoping study for the Bennet Well resources to commence in late 2013 to early 2014.

Australian resources company, Cauldron Energy Limited (ASX: CXU) (“Cauldron” or “the Company”) is pleased to announce an update on the recently completed diamond core drilling programs completed at Bennet Well and Barradale prospects at its Yanrey uranium project in Western Australia (Figure 1).

Drilling at Bennet Well has identified significant high grade uranium extensions to the previously announced uranium resources (refer ASX announcement dated 7 February 2013). Barradale drilling has shown that this area is a lot more complex compared to the Bennet Well region and that a possible unconformity model is the likely style of uranium mineralisation for this prospect.

Tony Sage Executive Chairman

Brett Smith Executive Director

Qiu Derong Non-executive Director

Claire Tolcon Company Secretary

A total of eight core holes were drilled at Bennet Well with four holes at Bennet Well East, three holes drilled at Bennet Well South and one hole drilled at Bennet Well Deep South (Figures 2 and 3). Significant uranium grades were identified in all eight core holes drilled in the Bennet Well region. The most significant intersection was 6.48m @ 602 ppm eU3O8 from YNDD018 located on the most northern drill line at Bennet Well South (Figures 4 and 5).

On the southern end of Bennet Well South, an exploration hole YNDD020 identified two significant uranium zones totalling 3.04m @ 707 ppm eU3O8 . This shows that the high grade uranium mineralisation extends further south than the current drill lines.

32 Harrogate Street, West Leederville WA 6007Ph: (+618) 9380 9555 Fax: (+618) 9380 9666 PO Box 1385, West Leederville WA 6901 Web: www.cauldronenergy.com.au

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These two high grade uranium intersections, identified at either end of the Bennet Well South resource, have highlighted the potential to get significant resource upgrades for this resource area when future drilling is completed with the aim of defining the extent of the mineralisation.

Cauldron head of operations, Simon Youds commented: “ How far the uranium zone extends at Bennet Well South is unknown with no historical drillhole data in these regions to use as a reference.”

“The very high grades identified at both ends of the current resource, suggests that there could be a significant size increase to this very exciting resource. Identifying the extents of the high grade uranium mineralisation will be a priority of future drilling programs”.

Outcomes of Bennet Well drill program

The core drilling program at Bennet Well had two intended outcomes.

• 1) Uncover the nature and structure of uranium-hosted sediment

The first was to establish key information regarding the nature and structure of the sediment in which the uranium is hosted. Understanding the nature of uranium deposition and the nature of the sands allows an increase in confidence in the use of in-situ recovery (ISR) extraction methods.

Having completed the core drilling program, Youds said the Company now had a good understanding of the uranium in this system.

“The Company’s ability to leverage off this knowledge to establish further satellite uranium resources highlights the confidence that Cauldron has in this exciting region,” he said.

• 2) Metallurgical and leach testing

The second outcome of the core drilling program at Bennet Well was to obtain core samples from across the three resource areas for metallurgical and leach testing. The metallurgical testing will be completed by Coffey. The aim of this testing is to upgrade sections of the current Inferred resources to an Indicated resource. The leach testing will be completed by ANSTO in NSW who will test the core to determine the ISR (in-situ recovery) potential of the resources.

Cauldron is currently processing the core ready to commence both testing methods. The final results are expected towards the end of 2013.

Beyond formalising these preliminary results through laboratory analysis, the clear step for the Company is to establish the JORC resource through an independent review and resource evaluation. This is believed by the Company to now be at a suitable size and there is now enough confidence in terms of resource (Inferred and Indicated) to progress the Bennet Well project into a scoping study. A firm scope

32 Harrogate Street, West Leederville WA 6007 Ph: (+618) 9380 9555 Fax: (+618) 9380 9666 PO Box 1385, West Leederville WA 6901 Web: www.cauldronenergy.com.au

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and fully costed proposal have been received for this work and await Board approval to be initiated.

Exploration Manager Mark Couzens commented: “Most of the core obtained from the core drilling program has shown that the high uranium zones are associated with more permeable sand zones located at the edge of large extensive palaeochannels with very distinct redox interfaces between oxidised and reduced sediments ,” he said.

“The core looks very encouraging from a leaching perspective and Cauldron is excited about the ISR potential of the recently identified uranium resources surrounding the original Bennet Well uranium resource. The testing to be completed by ANSTO will give Cauldron a definitive answer as to how much uranium oxide is leachable from the sediments and whether the Bennet Well resources are amenable to ISR style uranium production”.

The calibration of the raw downhole gamma field readings, by Uranium Specialist Dr David Wilson, has shown that all eight core holes drilled at Bennet Well, where grades are above 250ppm uranium oxide over a one metre interval, are considered of economic importance (refer ASX announcement dated 7 February 2013).

Ravensgate Resources, an independent consultant group, calculated a JORC compliant resource for the Bennet Well region in February this year (refer ASX announcement dated 7 February 2013).

The uranium resource increased the previous 4.8Mlb at 300 ppm eU3O8 to 15.7 Mlb at 270 ppm eU3O8 using a 150 ppm cut-off.

Drilling for both of the recently completed programs was completed by Terra Drilling who did mud rotary pre-collars with diamond tails of either HQ or NQ2 core. Downhole geophysical logging was completed by Bore-Hole Geophysical Services who probed both the Bennet Well holes and Barradale Holes.

Background

For the Bennet Well drilling program, a total of eight core holes were drilled totalling 356 metres of mud rotary pre-collars and 257 metres of HQ/NQ2 diamond core (Table 1). Core drilling at the Barradale Prospect totalled six holes with 272 metres of mud rotary pre-collars and 668 metres of HQ/NQ2 diamond core (Table 2).

The Barradale project is part of a Joint Venture agreement between Cauldron which owns 70% of the project and Intra Energy Corporation Limited (ASX: IEC) which owns 30% of the project.

Drilling at the Company’s Barradale Prospect has established the presence of at least one very deep palaeochannel/series of smaller stacked palaeochannels (Figure 6). Also identified were units of a once-sedimentary origin, including thick packages of sandstone and siltstone, that doesn’t appear to be associated with

32 Harrogate Street, West Leederville WA 6007 Ph: (+618) 9380 9555 Fax: (+618) 9380 9666 PO Box 1385, West Leederville WA 6901 Web: www.cauldronenergy.com.au

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palaeochannels but may in fact be thick marine packages older than the Cretaceous sediments observed elsewhere in the Bennet Well region. These thick, possibly marine, packages appear to have since been subjected to moderate metamorphic influences, given the almost psammitic and phyllitic textures observed within each interval.

Geochemical assays of the core identified low uranium grades up to 92 ppm but elevated thorium grades up to 1140 ppm within sedimentary units. The close proximity of uranium and thorium identified from assay in YNDD013 suggests that the more mobile uranium has moved away leaving behind the less mobile thorium in higher abundance.

Although drilling results were of lower tenor than expected, Cauldron believes that the Barradale region might represent a different uranium mineralisation model such as an unconformity style model and requires follow-up work.

Four of the six core holes drilled at Barradale as well as the drillhole at Bennet Well Deep south have been partially funded with the $300,000 in government incentive grants that Cauldron received in June 2013. Cauldron would like to thank the Department of Mines and Petroleum in Western Australia for their assistance in encouraging new exploration areas and are planning to do further drilling in 2014 as part of this agreement. Cauldron looks forward to further exploration success with the assistance of this government grant.

End.

For further information, visit www.cauldronenergy.com.au or contact:

Simon Youds

Cauldron Energy Limited Ph: (08) 9380 9555

David Tasker

Professional Public Relations Ph: (08) 9388 0944

32 Harrogate Street, West Leederville WA 6007 Ph: (+618) 9380 9555 Fax: (+618) 9380 9666 PO Box 1385, West Leederville WA 6901 Web: www.cauldronenergy.com.au

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Figure 1 - Yanrey Project and Prospect Location Plan

32 Harrogate Street, West Leederville WA 6007 Ph: (+618) 9380 9555 Fax: (+618) 9380 9666 PO Box 1385, West Leederville WA 6901 Web: www.cauldronenergy.com.au

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Figure 2 - Bennet Well prospect locations showing the location of the recently completed core drillholes at the Bennet Well resources. Previous drilling by Cauldron and the geological interpretation is also shown 32 Harrogate Street, West Leederville WA 6007 Ph: (+618) 9380 9555 Fax: (+618) 9380 9666 PO Box 1385, West Leederville WA 6901 Web: www.cauldronenergy.com.au

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Figure 3 - Bennet Well prospect locations showing the location of the recently completed core drillholes at the Bennet Well resources. Previous drilling by Cauldron and a bouguer gravity image is also shown

32 Harrogate Street, West Leederville WA 6007 Ph: (+618) 9380 9555 Fax: (+618) 9380 9666 PO Box 1385, West Leederville WA 6901 Web: www.cauldronenergy.com.au

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Figure 4 – Core photos taken from drillhole YNDD018 at Bennet Well South from 87.6 metres to 96.7 metres. The high grade uranium zone is located within the grey fine-grained to medium-grained sand from 88.64 metres to 95.12 metres. Figure 5 shows the downhole gamma log

32 Harrogate Street, West Leederville WA 6007 Ph: (+618) 9380 9555 Fax: (+618) 9380 9666 PO Box 1385, West Leederville WA 6901 Web: www.cauldronenergy.com.au

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– Figure 5 Downhole deconvolved gamma log from YNDD018 showing the high grade uranium zone. See Figure 4 for the core photos from the mineralised zone

32 Harrogate Street, West Leederville WA 6007 Ph: (+618) 9380 9555 Fax: (+618) 9380 9666 PO Box 1385, West Leederville WA 6901 Web: www.cauldronenergy.com.au

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– Figure 6 Core photos taken from drillhole YNDD010 at the Barradale Prospect showing part of the thick palaeochannel unit dominated by sandstone and conglomeratic beds

32 Harrogate Street, West Leederville WA 6007 Ph: (+618) 9380 9555 Fax: (+618) 9380 9666 PO Box 1385, West Leederville WA 6901 Web: www.cauldronenergy.com.au

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						Depth From (m)	Depth To (m)		Deconv. eU308 (ppm)	Maximum eU308 (ppm)	Grade Width (ppm.m)
			TD (m)	Core Recovery (%)	Resource Name			Thickness (m)
Hole ID	Easting	Northing
YNDD015	302878	7508657	52.5	92.9	Bennet Well East	40.54	43.12	2.58	380
										1138	979
					Bennet Well East
YNDD016	303305	7507544	68	88.6		62.48	63.44	0.96	306	759	294
					Bennet Well East	57.6	59.22	1.62	585	1344	948
YNDD017	303240	7507886	64.1	95.6
						60.54	61.22	0.68	268	591	182
						86.86	87.74	0.88	397	1192	349
YNDD018	299975	7506937	102.1	95.6	Bennet Well South	88.64	95.12	6.48	602	2024	3901
						95.18	95.96	0.78	199	286	155
					Bennet Well South
YNDD019	300271	7506221	99.6	100		80.82	85.66	4.84	368	1399	1781
					Bennet Well South	72.6	73.8	1.2	506	1399	608
YNDD020	300538	7505854	90.6	90.2
						81.26	83.1	1.84	838	3313	1541
						54	55.74	1.74	346	718	602
YNDD021	299124	7504044	68.7	93.8	Bennet Well Deep South	60.5	61.8	1.3	530	1849	689
						62.52	63.16	0.64	142	212	91
					Bennet Well East
YNDD022	302970	7508268	67.6	92.9		57.46	60.52	3.06	441	1536	1349
Note: All eU308 grades are calculated using 2cm incriments from a 100ppm						minimum grade over a minimum width of 50cm.
Note: Drillhole YNDD019 only probed the upper uranium zone and not the lower uranium zone due to hole blockage. The lower zone in the original hole YNAC278 located 5m away (Easting 300271, Northing 7506226) had a lower zone grade of 1.5m @ 1152 ppm eU308
Note: The datum for all drillholes is GDA94_Zone50

Table 1 - Bennet Well core drillhole locations and deconvolved uranium oxide grades

32 Harrogate Street, West Leederville WA 6007 Ph: (+618) 9380 9555 Fax: (+618) 9380 9666 PO Box 1385, West Leederville WA 6901 Web: www.cauldronenergy.com.au

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					Depth From (m)	Depth To (m)
			TD (m)	Prospect Name			Thickness (m)	Th (ppm)	Maximum Th (ppm)	U (ppm)	Maximum U (ppm)
Hole ID	Easting	Northing
YNDD009	299090	7470979	154.4	Barradale	No channel intersected - no significant intercepts
YNDD010	299029	7471560	208.7	Barradale	Channel intersected - no significant intercepts
YNDD011	298745	7471594	59.9	Barradale	No channel intersected - no significant intercepts
YNDD012	298943	7473311	70.7	Barradale	No channel intersected - no significant intercepts
YNDD013	299021	7470554	270.3	Barradale	130.7	133.1	2.4	293.4	1140.0	26.8	91.8
					138.1	139.1	1	256.8	378.0	26.0	37.4
					163.5	164.1	0.6	133.5	133.5	9.8	9.8
					174.6	175.7	1.1	229.1	176.5	31.9	37.6
					182.9	185.9	3	107.5	141.5	12.7	17.4
					186.4	186.9	0.5	136.0	136.0	14.6	14.6
					187.9	188.4	0.5	106.5	106.5	12.5	12.5
					190.9	192.9	2	109.5	130.0	11.3	15.3
					194.4	194.9	0.5	139.5	139.5	13.6	13.6
YNDD014	298927	7469988	175.8	Barradale	106.8	106.9	0.1	250.0	250.0	23.2	23.2
					151.1	151.3	0.2	260.0	260.0	26.7	26.7
Note: Cut-off grade of 100pm used for thorium (Th) assays. No cut-off grades have been used for the uranium (U) assays
Note: The datum for all drillholes is GDA94_Zone50

Table 2 – Barradale Prospect showing drillhole locations as well as the most significant uranium and thorium assay grades from the drilling program

32 Harrogate Street, West Leederville WA 6007 Ph: (+618) 9380 9555 Fax: (+618) 9380 9666 PO Box 1385, West Leederville WA 6901 Web: www.cauldronenergy.com.au

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Disclosure Statements

Analytical Method For Barradale Diamond Drill Core Geochemistry

Laboratory:- Australia Laboratory Services Pty Ltd (ALS)

Techniques used:

GEO-4A01 + ME – MS61 Multi-Acid Digestion with Hydrofluoric Acid for 48 elements (Inductively Coupled Plasma with both Atomic Emission Spectrometry and Mass Spectrometry finish)

Au – ST43 Super Trace Level Gold analysis by Aqua Regia extraction with ICP-MS (Inductively Coupled Plasma-Mass Spectrometry) finish

Competent Person Statement

The information in this announcement to which this statement is attached that relates to Cauldron Energy Limited’s exploration results is based on information compiled by Mr Mark Couzens who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Couzens is a full-time employee at Cauldron Energy Limited in the role of Exploration Manager and has sufficient experience relevant to the styles of mineralisation and types of deposits under consideration. Mr Couzens is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.’ Mr Couzens consents to the inclusion in the announcement of the matters based on their information in the form and context in which it appears.

The information in this resource memorandum that relates to mineral resources is based on information evaluated by Mr Craig Harvey who is a Member of the Geological Society of Southern Africa. Mr Harvey is full time employee of Ravensgate, an independent consultancy group specialising in mineral resource estimation, evaluation and exploration. Mr Harvey has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as a Competent Persons as defined in the 2004 Edition of the ‘Australasian Code for Report of Exploration Results, Mineral Resources and Ore Reserves’. Mr Harvey consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

The calculation of the uranium grades used in the resource estimate are based on information compiled by David Wilson BSc MSc MAusIMM from 3D Exploration Ltd based in Western Australia. These uranium grades form the basis of the resource estimate and have been calculated from the gamma results and from the disequilibrium testing. Mr Wilson has sufficient experience relevant to the style of mineralisation and the deposit type and the activities he is undertaking to qualify as a Competent Person as defined by JORC Code for Reporting of Mineral Resources and Ore Reserves (2004).

32 Harrogate Street, West Leederville WA 6007 Ph: (+618) 9380 9555 Fax: (+618) 9380 9666 PO Box 1385, West Leederville WA 6901 Web: www.cauldronenergy.com.au