KAISER REEF LIMITED - Capital/Financing Update 2020

KAISER REEF LIMITED ACN 635 910 271 SUPPLEMENTARY PROSPECTUS

IMPORTANT INFORMATION

This is a supplementary prospectus ( Supplementary Prospectus ) intended to be read with the prospectus dated 5 December 2019 ( Prospectus ) issued by Kaiser Reef Limited (ACN 635 910 271) ( Company ).

This Supplementary Prospectus is dated 28 January 2020 and was lodged with the Australian Securities and Investments Commission ( ASIC ) on that date. The ASIC, the ASX and their respective officers take no responsibility for the contents of this Supplementary Prospectus.

This Supplementary Prospectus must be read together with the Prospectus. Other than as set out below, all details in relation to the Prospectus remain unchanged. Terms and abbreviations defined in the Prospectus have the same meaning in this Supplementary Prospectus. If there is a conflict between the Prospectus and this Supplementary Prospectus, this Supplementary Prospectus will prevail.

This Supplementary Prospectus will be issued with the Prospectus in hard copy or as an electronic copy and may be accessed on the Company’s website at www.kaiserreef.com.au.

This is an important document and should be read in its entirety. If you do not understand it, you should consult your professional advisers without delay.

1. BACKGROUND

By this Supplementary Prospectus, the Company makes the amendments to the Prospectus as set out in section 2 below.

The amendments to the Prospectus outlined in section 2 below should be read in conjunction with the Prospectus.

2. AMENDMENT TO THE PROSPECTUS

The Supplementary Prospectus has been prepared to provide investors with a revised Independent Geologist’s Report. The revised Independent Geologist’s Report is included at Annexure A of this Supplementary Prospectus.

The Independent Geologist’s Report has been amended to:

(a) report the historical Exploration Results included in the Independent Geologist’s Report accordance with the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves ( JORC Code ); and
(b) include a competent person’s statement compliant with Appendix 3 of the JORC Code.

This Supplementary Prospectus is intended to be read with the Prospectus dated 5 December 2019 issued by Kaiser Reef Limited (ACN 635 910 271).

3. NEW APPLICATIONS

Applications for Shares under the Offer after lodgement of this Supplementary Prospectus must be made using the Supplementary Application Form attached to or accompanying the Supplementary Prospectus. Applications after the date of the Supplementary Prospectus must not be made on the Application Forms attached to or accompanying the Prospectus and any such applications will not be valid.

4. CONSENT OF INDEPENDENT GEOLOGIST

Snowden Mining Industry Consultants Pty Ltd has given its written consent to being named as the Independent Geologist to the Company in this Supplementary Prospectus and to the inclusion of the Independent Geologist’s Report at Annexure A of this Supplementary Prospectus. Snowden Mining Industry Consultants Pty Ltd has not withdrawn its consent prior to the lodgement of this Supplementary Prospectus with the ASIC.

Jeremy Peters, the Competent Person (as defined in the JORC Code) has provided his consent and compliance statement in relation to this Supplementary Prospectus.

5. DIRECTORS’ AUTHORISATION

This Supplementary Prospectus is issued by the Company and its issue has been authorised by a resolution of the Directors.

In accordance with Section 720 of the Corporations Act, each Director has consented to the lodgement of this Supplementary Prospectus with the ASIC.

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Adrian Byass Non-Executive Chairman For and on behalf of KAISER REEF LIMITED

This Supplementary Prospectus is intended to be read with the Prospectus dated 5 December 2019 issued by Kaiser Reef Limited (ACN 635 910 271).

Kaiser Reef Limited Stuart Town Exploration Project - Independent Geologist's Report Project Number AU10324 January 2020

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OFFICE LOCATIONS

Perth

Level 6, 130 Stirling Street Perth WA 6000 AUSTRALIA

Tel: +61 8 9213 9213 ABN: 99 085 319 562 [email protected]

This report has been prepared by Snowden Mining Industry Consultants Pty Ltd (Snowden) for use by Kaiser Reef Limited, pursuant to an agreement between Snowden and Kaiser Reef Limited for use in a Prospectus to support a listing on the Australian Stock Exchange and not for any other purpose.

 2020

All rights in this document are reserved in accordance with the terms of the agreement between Snowden and Kaiser Reef Limited.

Brisbane

22 Cordelia Street South Brisbane QLD 4101 AUSTRALIA Tel: +61 7 3026 6666 ABN: 99 085 319 562 [email protected]

Johannesburg

Technology House, Greenacres Office Park, Cnr. Victory and Rustenburg Roads, Victory Park Johannesburg 2195 SOUTH AFRICA PO Box 521278, Saxonwold 2132 SOUTH AFRICA Tel: +27 11 782 2379 Fax: +27 11 782 2396 Reg. No. 1998/023556/07 [email protected]

Website

www.snowdengroup.com

Prepared by: Jeremy Peters BSc, BEng, FAusIMM, CP (Min, Geo) Principal Consultant

Reviewed by: Paul Mazzoni MSc (Econ, Geo, Mine Exp), BSc (Geo), FAusIMM, MSEC Associate Executive Consultant

Issued by: Perth Office Doc ref: 191107 AU10324 Kaiser Reef Stuart Town CPR - FINAL.docx Last edited: 28/01/2020 3:27 PM

Number of copies: Snowden: 2 Kaiser Reef Limited: 2

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	Table of Contents	Table of Contents
1	EXECUTIVE SUMMARY ....................................................................................................... 5
	1.1	Summary of Mineral Resources and Ore Reserves .......................................................... 6
	1.2	Summary of Exploration Results ....................................................................................... 6
	1.3	Summary of geology and mineralisation ........................................................................... 7
	1.4	Summary of exploration strategy ....................................................................................... 7
	1.5	Conclusions and recommendations .................................................................................. 8
		1.5.1 Conclusions ............................................................................................................... 8
		1.5.2 Recommendations ..................................................................................................... 8
2	INTRODUCTION ................................................................................................................... 9
	2.1	Competent Person, Effective Date and no material change ............................................. 9
	2.2	Mineral Assets ................................................................................................................... 9
	2.3	Mineral Resources and Ore Reserves ............................................................................ 10
	2.4	Sources of information and site visit ................................................................................ 10
		2.4.1 Reliance on other experts ........................................................................................ 10
		2.4.2 Reliance on information ........................................................................................... 10
		2.4.3 Limitations ................................................................................................................ 11
		2.4.4 Declaration ............................................................................................................... 11
		2.4.5 Copyright ................................................................................................................. 11
3	PROJECT DESCRIPTION ................................................................................................... 12
	3.1	Location and access ........................................................................................................ 13
	3.2	Aboriginal heritage, Native Title and environment .......................................................... 13
		3.2.1 Town Common ........................................................................................................ 13
4	GEOLOGY AND MINERALISATION................................................................................... 14
	4.1	Regional geology ............................................................................................................. 14
	4.2	Local geology ................................................................................................................... 16
		4.2.1 Structure .................................................................................................................. 17
		4.2.2 Geophysics .............................................................................................................. 18
		4.2.3 Mineralisation ........................................................................................................... 19
5	HISTORICAL EXPLORATION ............................................................................................ 25
	5.1	Exploration summary ....................................................................................................... 26
		5.1.1 Kratos Uranium NL (1980 to 1982).......................................................................... 26
		5.1.2 Kratos-Stellar Exploration Group (1983, first reporting period) ............................... 27
		5.1.3 Kratos-Stellar Exploration Group (1983, second reporting period) ......................... 28
		5.1.4 Kratos Uranium NL, Joint Venture with Freeport of Australia Limited (1984) ......... 28
		5.1.5 Carpentaria Exploration Company Pty Ltd (1984 to 1986) ..................................... 28
		5.1.6 CRA Exploration Pty Ltd (1992 and 1993) .............................................................. 29
		5.1.7 CRA Exploration Pty Ltd (1994) .............................................................................. 29
		5.1.8 CRA Exploration Pty Ltd (1995) .............................................................................. 30

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		5.1.9 CRA Exploration Pty Ltd (1996) .............................................................................. 30
		5.1.10 LFB Resources NL (1997 to 1999) .......................................................................... 30
		5.1.11 Kanimblan Mines Pty Ltd (2002 and 2003) ............................................................. 31
		5.1.12 Ironbark Gold Limited and Waratah Gold Limited (2007 to 2011) ........................... 31
	5.2	Snowden commentary ..................................................................................................... 31
6	EXPLORATION STRATEGY ............................................................................................... 32
	6.1	Snowden opinion ............................................................................................................. 32
	6.2	Snowden conclusions ...................................................................................................... 33
	6.3	Snowden recommendations ............................................................................................ 33
7	REFERENCES .................................................................................................................... 34
8	ABBREVIATIONS AND UNITS ........................................................................................... 35

Figures

Figure	1.1	Stuart Town Exploration Project schematic location ............................................................................... 6
Figure	3.1	Stuart Town tenements ......................................................................................................................... 12
Figure	4.1	Regional geology of the Stuart Town Project ........................................................................................ 15
Figure	4.2	Stuart Town local geology ..................................................................................................................... 17
Figure	4.3	Stuart Town structure and interpreted transverse zone ........................................................................ 18
Figure	4.4	Central Stuart Town magnetic image .................................................................................................... 19
Figure	4.5	Stuart Town/Ravenswood analogy........................................................................................................ 22
Figure	4.6	Alkane prospects................................................................................................................................... 23
Figure	5.1	Stuart Town historic drilling .................................................................................................................. 26

Tables
Table 1-1	KAU Mineral Assets ................................................................................................................................ 5
Table 1-2	Summary of proposed exploration expenditure ....................................................................................... 8
Table 2-1	Responsibilities of the author ................................................................................................................ 10
Table 6-1	KAU proposed exploration activities...................................................................................................... 32

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1 EXECUTIVE SUMMARY

Snowden Mining Industry Consultants Pty Ltd (Snowden) was requested by Kaiser Reef Limited (KAU) to prepare a Independent Geologist’s Report (IGR) for its Stuart Town Exploration Project (“Stuart Town” or “the Project”), located near Orange in New South Wales (NSW) (Figure 1-1).

Snowden considers that the project has some geological similarities to Resolute Mining Limited’s (Resolute) 6 millionounce (Moz) Ravenswood field[1] and is in the regional vicinity of Newcrest Mining Limited’s (Newcrest’s) 22 Moz Cadia Valley operations[2] . It is considered to be prospective for large scale intrusion related gold systems. Snowden is encouraged by the following points:

Significant historical production exceeding 170,000 ounces of gold[3] sourced from many relatively small lode and alluvial gold sources and described in records kept by the NSW Department of Primary Industry. No major source or pathway has yet been identified for the gold mineralisation.
Large interpreted thrust fault zones provide favourable structural setting for an interpreted auriferous intrusive felsic body.
Examination of publicly available geophysical data indicates that coincident magnetic and gravity anomalies support the interpretation of a large, relatively shallow felsic intrusive, supported by a coincident potassic radiometric signature.
Mineralised brecciated rhyolites at Quartz Hill with accompanying high levels of arsenic reported from historic soil sampling and drilling may represent minor subvolcanic intrusives related to of an underlying mineralised intrusive.
Government mapping indicates that the Project lies within a west-northwest transverse fault zone.
There has been no effective testing of the deep-seated intrusive model.

Snowden further notes recent positive exploration results at Alkane Resources Limited’s (Alkane’s) North Molong porphyry project, some 20 km north of Stuart Town[4] .

Snowden understands that this IGR is to be included in a prospectus to be issued by KAU for an initial public offer of 22,500,000 shares at $0.20 to raise $4.5 million to facilitate a listing on the Australian Securities Exchange (ASX).

KAU proposes to acquire 100% of the issued capital in Chase Metals Pty Ltd (Chase). Chase currently has the rights to Exploration Licence (EL) 8491 and Exploration Licence Application (ELA) 5854 through trust deeds with Jonathan Downes and Adrian Byass respectively, as Directors of KAU.

This report has an Effective Date of 27 November 2018, this being the most recent date on which KAU made material in its possession available to Snowden; and Snowden is unaware of any material change since this date.

The KAU Mineral Assets being described are located within NSW (Figure 1-1) and comprise an EL and an ELA (Table 1-1) under NSW mining legislation (refer Section 2.2 below).

This document is prepared in accordance with the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Minerals Resources and Ore Reserves (the “JORC Code”) and the 2015 Australasian Code for Public Reporting of Technical Assessments and Valuations of Mineral Assets (the “VALMIN Code”).

Table 1.1 KAU Mineral Assets

Tenement ID Status Operator Holder Expiry Area (units/km[2] )

1 www.rml.com.au/ravenswood

2 www.newcrest.com.au

3 NSW DPI Primefacts, Primefact 562, February 2007, Stuart Town Gold Field

4 ALK ASX release, 9 September 2019

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EL 8491 ELA 5854	Live Application	KAU KAU	Jonathan Charles Downes Adrian Paul Byass	21 Dec 2020	12/32.55 15/43.34

Figure 1.1 Stuart Town Exploration Project schematic location

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Source: KAU

1.1 Summary of Mineral Resources and Ore Reserves

The Project does not contain any identified Mineral Resource or Ore Reserve estimates.

1.2 Summary of Exploration Results

Snowden is not reporting any recent Exploration Results[5] .

Snowden has based its report on the results of exploration historically performed by parties other than KAU and has referenced the publicly available descriptions of exploration undertaken by previous explorers and the results of that exploration.

These results are historical in nature and are reported here in accordance with the guidelines of the JORC Code, for which a Table 1 has been completed (Appendix A). The Competent Person considers that these results have been gathered in accordance with appropriate practice at the time and provide a reasonable but not absolute indication of the prospectivity of the Stuart Town geology.

The Competent Person has referenced the source of these historic exploration results as footnotes throughout this document and has provided a completed JORC Code Table 1, Sections 1 and 2 in Appendix A below, along with a summary of relevant drill hole locations and results in Appendix B below.

5 As defined by Clause 18 of the JORC Code

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There are numerous soil geochemical anomalies identified by previous explorers throughout the Stuart Town area that are yet to be drill tested.

1.3 Summary of geology and mineralisation

More than 80 lode-gold (quartz vein) and alluvial gold occurrences have been identified and documented at the Stuart Town goldfield. Gold mining first commenced in the 1850s and more than 5 tonnes (170,000 ounces) of gold is described has having been produced in records kept by the NSW Department of Primary Industry between 1875, when mine records were first kept in NSW and the early part of the 20[th] century[3] . No records have been kept on the production sourced from the fields during the rush between the 1850s and 1875, but it is considered to be significant.

The Project area covers a series of Silurian and Devonian sediments (Cunningham Formation), which were deposited in an extensional environment (Hill End Trough) prior to being compressed in a later orogenic event which is represented by upright folding and reverse faulting. These reverse faults have been shown in regional exploration to be conduits for gold mineralisation, which occurred after major deformation. The historically mined area is shear-bounded by a western and eastern structure.

Gold mined to date was structurally controlled as lode-style veins or as alluvial concentrations. Lode gold was often associated with laminated quartz veins and has also been documented in quartz vein stockworks. Gold was associated with pyrite and arsenopyrite, galena, chalcopyrite and sphalerite. Documented veins range in width from 0.1 m to 1.2 m, with the strike of some individual veins exceeding several hundred metres. Historical production often documented head grades of sorted ore at two to three ounces of gold per ton. Underground mining has not been documented below 65 m depth.

Gold mineralisation occurs intermittently along approximately 6 km of the Western Shear and 2 km of the Eastern Shear, in relatively narrow quartz veins. The Kaiser Wilhelm Mine was the largest recorded producer from which 112 kg of Au was mined at an average reported sorted grade of 24 g/t Au.

The Project overlies an interpreted intrusive unit that has been modelled previously by Kratos Uranium whilst in joint venture with Freeport (1984). Carpentaria Exploration Company Pty Ltd (owned by MIM Limited) described the deep-seated intrusion related gold hypothesis in 1985. This theory postulates a felsic intrusive body at depth being the source of gold mineralisation at Stuart Town. This is based on ground magnetic and gravity surveys, airborne magnetic and radiometric data in conjunction with goldarsenic-base metal assays from soil sampling and geological mapping.

Only limited drilling has been conducted to date and observation of this drilling indicates that it was ineffective. Anecdotal evidence indicates that drilling by several parties was hastily conceived and directed toward meeting tenement expenditure commitments, rather than a particular geological strategy[6] .

An underlying intrusive has been interpreted from geophysics with estimated dimensions of 1,200 m across, an estimated vertical extent of 1,700 m and is interpreted to come within 200 m of the surface. Altered, brecciated and mineralised rhyolites have been observed to occur to the northeast of the interpreted intrusion at Quartz Hill and Specimen Hill.

1.4 Summary of exploration strategy

Snowden considers the Stuart Town Project to represent an exploration project that enjoys relative ease of access and the regional presence of significant infrastructure.

Work by historical explorers has identified sufficient indications of mineralisation to warrant further exploration on the premise that the intrusive system is large.

KAU proposes to:

Rank all structural, geochemical and geophysical targets in order to prioritise drill targets

6 Various conversations with locals who were engaged to assist in several drilling campaigns.

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Drill the highest priority targets from surface to confirm their location, geology and geometry
Conduct further geophysical programmes to identify the location of favourable structure and associated indications of mineralisation
Collect samples for metallurgical testwork.

Snowden has been advised that KAU has budgeted approximately $2.5 million on direct exploration out of available funds of $4.5 million post expenses to issue (Table 1-2). The budget contemplates exploration expenditure at Stuart Town over two years and Snowden considers this to be appropriate to support the strategy described.

Table 1.2 Summary of proposed exploration expenditure

Project area	Activity	Year 1 ($)	Year 2 ($)	Total ($)
Stuart Town	Detailed mapping Assays Geophysical surveys Reverse circulation (RC) drilling Diamond drilling	60,000 20,000 400,000 200,000 n/a	20,000 60,000 n/a 200,000 700,000	80,000 80,000 400,000 400,000 700,000
Service costs	Heritage and tenement administration Geological services and field labour Administration	50,000 250,000 100,000	40,000 300,000 100,000	90,000 550,000 200,000
Total		1,080,000	1,420,000	2,500,000

1.5 Conclusions and recommendations

1.5.1 Conclusions

Snowden concludes that KAU has rights to tenure over a prospective area near Orange, NSW that has prospective geology and recommends that it proceed to implement its exploration strategy on listing.

The regional geology hosts Newcrest’s Cadia operations and KAU contends that there is likely to be economic mineralisation on its tenements. Snowden concurs with this contention.

Snowden considers the Project to be at an Early Exploration[7] stage. Previous explorers have returned gold drill intersections as well as attractive geochemical results. Numerous geochemical and geophysical targets have been identified that are yet to be drill tested.

The prospectivity of the Stuart Town Project is supported by the regional presence of the Cadia project and recent exploration results at Alkane’s Northern Molong project in comparable geology. Further support is provided the Competent Person’s observation of geological and geochemical similarities to Resolute’s Ravenswood project.

KAU will benefit from the work by previous miners and explorers that has resulted in the identification of alluvial and lode gold mineralisation.

Snowden has examined the proposed exploration budget of $2.5 million, and the proposed work program for the first two years after KAU’s listing and concludes that these are reasonable and achievable.

In the event of grant of Exploration Licence Application 5854, KAU plans to expend $25,000 on mapping of this licence in the first year and a further $125,000 in the second year on geochemical exploration and geophysics. This is considered to be appropriate and not to represent a material increase to the overall planned budget.

1.5.2 Recommendations

Snowden recommends that structural geology work should commence in parallel with the proposed geophysics, mapping and geochemical sampling to provide context to the results of these exercises.

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2 INTRODUCTION

Snowden was requested by KAU to prepare a IGR for its Stuart Town Exploration Project, located near Orange, in the central west of NSW (Figure 1-1).

The Project is directed toward the identification of economic gold mineralisation.

Stuart Town is located in the vicinity of Newcrest’s Cadia project, a large-scale intrusive related gold and copper mine (refer Section 4.2.3 below). KAU has identified sufficient geological evidence to indicate potential for intrusive related gold mineralisation. Snowden advises that this concept is based on the findings of previous exploration and Snowden has referenced the publicly available sources of this information, as appropriate. Snowden concurs with this view.

This IGR does not provide a Valuation[7] of KAU’s Stuart Town Project for the purposes of listing.

2.1 Competent Person, Effective Date and no material change

The Competent Person for preparation of the report is Mr Jeremy Peters, FAusIMM CP (Mining, Geology). Mr Peters has extensive professional experience with the geology of and has worked extensively throughout Australia and is familiar with the geology of NSW.

The information in this report that relates to Exploration Results is based on information compiled by Jeremy Peters, who is a Member of the Australasian Institute of Mining and Metallurgy and an employee of Snowden Mining Industry Consultants Pty Ltd at the time of preparation of this report. Jeremy Peters has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the JORC Code. Jeremy Peters consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

The effective date of this report is 27 November 2019, this being the date at which no further information was supplied to the author by KAU, and the author is not aware of any material change in the status of The Project in the period between receipt of data and completion of the report.

Unless otherwise stated, information and data contained in this report or used in its preparation has been provided by KAU or has been gathered from public sources.

2.2 Mineral Assets

The Mineral Assets that are the subject of this IGR are a granted EL and an ELA under NSW mining legislation[8] (Table 1-1 and Figure 3-1). The Division of Resources and Geoscience in NSW requires minimum expenditure and annual reporting of exploration activity as a condition of tenure.

Chase currently has the rights to EL 8491 and ELA 5854 through trust deeds with Jonathan Downes and Adrian Paul Byass, respectively, both being Directors of KAU.

Upon listing, KAU is to acquire 100% of the issued capital in Chase and thereby beneficial rights to EL 8491 and ELA 5854.

Snowden is not qualified to comment definitively on licensing matters but has made enquiries of publicly available data[9] to the effect that the tenements are in good standing.

7 As defined by the VALMIN Code

8 For a more comprehensive explanation of NSW mining legislation, refer to https://www.resourcesandgeoscience.nsw.gov.au/minersand-explorers/applications-and-approvals/mining-and-exploration-in-nsw

9 NSW Department of Industry Exploration and Mining Titles, accessed 15/10/19

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2.3 Mineral Resources and Ore Reserves

The Project does not contain any Ore Reserves or Mineral Resources, as defined by the JORC Code.

2.4 Sources of information and site visit

The geology and exploration history of the Stuart Town area has been extensively and publicly reported. Mr Peters has worked on the rocks of the Lachlan Fold Belt at various points in his career and has traversed the Stuart Town locality in the course of that work. Mr Peters has examined the database of Stuart Town literature to satisfy himself of the veracity of the information.

Mr Peters has physically examined the exploration site between 30 August 2019 and 3 September 2019 and accepts representations made by KAU and bases his inferences on his own experience and observations.

Unless otherwise stated, all currencies are expressed in Australian dollars (A$) and units of measurement are metric. Historical units have been converted to metric units. Grid locations are in Geocentric Datum of Australia 1994 (GDA94), unless otherwise indicated.

Extensive reference is made to the results of historical exploration. These results are reported here in accordance with the guidelines of the JORC Code and . The Competent Person considers these to be adequately reliable for the purposes of indicating geological prospectivity. Snowden has referred to the publicly available MinView[10] database references for these historical exploration results, where they can be read in their original format and context.

Snowden is responsible for this report as part of KAU’s listing documentation and declares that it has taken all reasonable care to ensure that the information contained in this report is, to the best of its knowledge, in accordance with the facts and contains no material omissions.

2.4.1 Reliance on other experts

In preparing this report, Mr Peters has extensively relied on information collated by other parties, as described in Section 2.4 above. Mr Peters has critically examined this information, made his own enquiries and applied his general geological competence to conclude that the information presented in this IGR complies with the definitions and guidelines of the JORC Code.

The responsibility of the author is provided in Table 2-1.

Table 2.1 Responsibilities of the author

Author	Responsible for sections
Jeremy Peters, FAusIMM CP (Min, Geo)	1, 2, 3, 4, 5, 6, 7

The principal sources of information regarding KAU’s assets are private and statutory reports that have been prepared by various parties and collated by the Geological Survey of New South Wales (GSNSW).

2.4.2 Reliance on information

Snowden believes that its opinion must be considered as a whole and that presentation of selections of its report could create a misleading view of the opinions presented in this IGR. The preparation of a IGR is a complex process and does not lend itself to partial analysis or summary.

10 https://minview.geoscience.nsw.gov.au/#/?l=&lat=148.9143431&lon=-32.6560775&z=6&bm=bm1

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2.4.3 Limitations

KAU has agreed to indemnify Snowden for any liability arising as a result of or in connection with the information provided by or on behalf of it being incomplete, incorrect or misleading in any material respect. KAU has confirmed in writing to Snowden that, to its knowledge, the information provided by it (when provided) was complete and not incorrect or misleading in any material respect. Snowden has no reason to believe that any material facts have been withheld and KAU has confirmed in writing to Snowden that it believes it has provided all material information available to it.

2.4.4 Declaration

Snowden will receive a fee for the preparation of this report in accordance with normal professional consulting practice. This fee is not contingent on the outcome of the IGR and Snowden will receive no other benefit for the preparation of this report. Snowden does not have any pecuniary or other interests that could reasonably be regarded as capable of affecting its ability to provide an unbiased opinion in relation to the assets.

Neither Snowden, the Competent Person, Mr Peters, who is responsible for authoring this IGR, nor any Directors of Snowden have at the date of this report, nor have had within the previous two years, any shareholding in KAU or any of its advisors.

Consequently, Snowden, Mr Peters and the Directors of Snowden consider themselves to be independent of KAU and its related parties.

2.4.5 Copyright

Copyright of all text and other matter in this document, including the manner of presentation, is the exclusive property of Snowden.

It is an offence to publish this document or any part of the document under a different cover, or to reproduce and/or use, without written consent, any proprietary technical procedure and/or technique contained in this document. The intellectual property reflected in the contents resides with Snowden and shall not be used for any activity that does not involve Snowden, without the written consent of Snowden.

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3 PROJECT DESCRIPTION

The Stuart Town licences include the granted EL 8491 and an ELA 5854 (Figure 3-1). On listing, KAU will have the rights to these licences as a result of acquiring 100% of the capital of Chase (refer Section 2.2 above). The total area of EL 8491 is 12 graticular units (or about 32.55 km[2] ) and the area of ELA 5854 is 15 graticular units (or about 43.34 km[2] ).

Figure 3.1 Stuart Town tenements

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Source: KAU

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KAU has collated a substantial database of historical geological, geochemical, geophysical and drilling data from exploration programs completed since the 1970s and historical reports since the 1870s.

KAU’s primary focus will be to explore for economic gold deposits, possibly associated with copper. As a result of the historical exploration programs, numerous attractive drill targets have already been identified across the Project area and prioritised and KAU considers that drilling can commence soon after listing on the ASX.

Snowden concurs with this view.

3.1 Location and access

The Stuart Town Project is located around 300 km northwest of Sydney. Access from Sydney is via the Great Western Highway to Orange, a distance of 262 km, and a further 62 km to the north on a sealed road. Access within the Project is via station tracks and minor shire roads.

Stuart Town may also be reached by sealed road from Wellington via sealed roads 35 km south of Wellington to the township, via Burrendong Way. It is serviced by the main western railway, which provides regular service to/from Sydney. The closest regular air service is to and from Orange. There is a well-maintained network of shire and farm roads throughout most of the project area.

The Stuart Town Project tenements are located on the GSNSW Euchareena 1:100,000 map sheet, Code 8732.

The area consists of an undulating plateau incised by tributaries of the Macquarie River. The native vegetation is ironbark scrub, partially cleared for farmland. The terrain within the Project area is undulating, with no seasonal restriction of access to the project.

The land has a maximum relief of approximately 270 m and the physiography becomes progressively more rugged to the east of the Project area. Rock outcrop is good outside the reworked alluvial areas.

3.2 Aboriginal heritage, Native Title and environment

The Stuart Town Project lies within the Wellington Local Aboriginal Land Council Region. There are currently no Registered Native Title Applications, Determination Outcomes or Indigenous Land Use Agreements in Place over the Stuart Town Project area.

Prior to ground disturbing exploration, a Right to Negotiate process[11] must be followed by the negotiation parties (Title Holder and Native Title Claimants) to ensure exploration is lawfully completed. Claimants have three months to commence the negotiation process with the Title Holder once the negotiation has been signalled.

3.2.1 Town Common

Significantly, the Project covers land held in Trust as a Common for the inhabitants of Stuart Town. This removes access restrictions associated with freehold land from a large part of the historical goldproducing area. Access to the Town Common is unrestricted for inspection purposes, but more intensive exploration activities will require Native Title and Local Council clearance.

The remainder of the tenement is Stuart Town freehold proper, freehold or leasehold farmland. KAU has established communications and rapport with the owners of areas of interest.

11 For details of the Right to Negotiate process, refer to: http://www.nntt.gov.au/futureacts/Pages/Negotiation.aspx

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4 GEOLOGY AND MINERALISATION

Stuart Town is interpreted to be an intrusive related gold system. Field observation and examination of the conclusions drawn by previous explorers, particularly, strong arsenic values coincident with an interpreted intrusive, leads Snowden to infer strong similarities to Resolute’s 6 Moz Ravenswood gold field. Significantly, Newcrest’s 22 Moz Cadia Valley gold mining operations and Alkane’s North Molong porphyry project occur in the region and in an adjacent geological setting.

4.1 Regional geology

The Stuart Town Project occurs at the junction of the late-early-Silurian to early Middle Devonian Molong Zone and Hill End Zone of the Palaeozoic Lachlan Fold Belt, of the Lachlan Orogen[12] (Figure 4-1). The Molong Zone comprises a suite of intermediate to basic volcanics, volcaniclastics, co-magmatic intrusions, and limestones, probably part of a subduction-related island arc disrupted by later tectonism. The Hill End Zone is a rift trough of mainly sediments that developed during the middle Silurian in the north-eastern Lachlan Orogen and continued until the end of the Early Devonian.

Erosion during the Lachlan Orogen into ocean basins covered Cambrian oceanic crustal basalts and form Early to Middle Ordovician turbidites that occupy much of the Lachlan Orogen. Destruction of a Cambrian subduction zone formed the Ordovician Macquarie island arc system of central and southern NSW, above a west-dipping subduction zone. Breaks in volcanism are marked by the formation of tropical limestone reefs.

The intrusion of monzonites before resumption of plate tectonics in the Early Silurian caused the arc to collide with the back-arc basin turbidites, resulting in the major Benambran deformation that caused the folding and faulting of older rocks and generation of new granite magmas. This deformation ended the first stage in the development of the Lachlan Orogen.

The Macquarie arc is a world-class porphyry copper-gold province. Monzonite intrusives in the arc host gold-copper deposits at Cadia, Northparkes, Lake Cowal, Browns Creek and major mineral accumulations at Cargo and Copper Hill.

A new subduction zone was formed several hundred kilometres to the east after the Benambran deformation event, placing the Lachlan Orogen in a back-arc position.

Extension occurred in the Lachlan Orogen from the Middle Silurian to middle Devonian and reworking of the earlier crust formed sedimentary and volcano-sedimentary basins and emplacement granites, some mineralised. The Macquarie arc split into several belts, separated by rift-sag basins which were closed by the mid-Devonian Tabberabberan Deformation, at the end of the second stage of development of the Lachlan Orogen.

Mid-Silurian to Mid-Devonian extension formed a major volcanic province with numerous volcanic hosted metal sulphide deposits. Later development of volcano-sedimentary rift basins accompanied Devonian fluviatile sedimentation. The Carboniferous Kanimblan deformation event followed and was itself followed by emplacement of the post-tectonic Bathurst Batholith.

Subsequent activity includes two major deformations and a number of magmatic events.

Significant mineral deposit types include volcanic-hosted massive sulphide systems, low-sulphide orogenic gold vein deposits, intrusive related skarns, epithermal and porphyry systems of various ages and placer deposits of various styles ranging in age from the Permian to recent.

12 https://www.resourcesandgeoscience.nsw.gov.au/miners-and-explorers/geoscience-information/nsw-geology-overview/statewidetectonics

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Figure 4.1 Regional geology of the Stuart Town Project

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Source: GSNSW Dubbo SI55-4 1:250,000 geological map sheet

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4.2 Local geology

The Stuart Town Project lies in the northern part of the Hill End Trough, within largely Devonian volcanosedimentary rocks of the Crudine Group and Cunningham Formation.

The Project area straddles a structural boundary divide within the Lachlan Fold Belt between the Molong Zone (refer Section 4.2.3 below) and the Hill End Zone (Figure 4-1). This boundary approximates the division between the Cunningham Formation to the west, and the Crudine Group to the east. Both the Molong and Hill End structural zones comprise predominantly Silurian-Devonian aged sediments and volcaniclastics within the Project area and surrounds.

GSNSW mapping indicates the central part of the tenement is underlain by undifferentiated elements of the Devonian Crudine Group, which is composed of thin to thick bedded and massive, quartzose, feldspathic and crystal-lithic felsic volcaniclastic sandstones; dacitic to rhyolitic and andesitic lavas and volcaniclastics; slate, tuff, siltstone, conglomerate, phyllite, rare limestone[13] (Figure 4-2). This group hosts the greatest intensity of historic gold workings.

Previous explorers mapped interbedded volcanic arenites, tuffs, greywackes, siltstones and slates, which was unofficially described as the Stuart Town Formation. This sequence was differentiated on the basis of the occurrence of volcanic arenites and tuffs.

The eastern and western parts of the tenement are underlain by the ungrouped Devonian Cunningham Formation, comprising phyllite, slate, shale, siltstone, quartz-feldspar-lithic- calcareous sandstone and tuff[14] , which overlies the Crudine Group. Mapping of the Cunningham Formation at Stuart Town has identified a sequence of undifferentiated creamy brown to dark grey slates, phyllites, shales, calcareous and lithic greywackes and minor volcanic arenites.

A conglomerate member of the Cunningham Formation is mapped in the extreme southeast the Project area, comprising a sequence of interbedded volcanic arenites, slates, mudstones and greywackes.

Previous explorers have mapped a brecciated and altered intrusive rhyolite near the historical Quartz Hill mine (refer Section 4.2.2 below). KAU considers this to be significant in the context of epithermal or intrusion-related mineralisation, given the association of rhyolite breccias with economic mineralisation in many places. Snowden concurs with this assessment.

Examination of geophysical data has led previous explorers to conclude the presence of a shallow, blind intrusive beneath the area of historical workings (refer Section 4.2.2 below). Snowden’s field examination of the area supports this interpretation, postulating the presence of several such intrusions, based on apparent ring-structures in the topography and magnetic imagery. Snowden observes that such an intrusive has not been drill tested and recommends that detailed mapping be undertaken, followed by stratigraphic drilling to test this interpretation.

Such an intrusive (a monzonite) is associated with the Cadia mineralisation near Orange, around 40 km to the south of Stuart Town.

Alteration in the Project area includes silicification, chloritisation and rock ground mass replacement by calcite. There is considerable silicification and kaolin clay development around the historical Specimen Hill mine. Extensive hydrothermal alteration, defined by silicification, sulphidation alteration was mapped in this area by Kratos (1981 to 1983).

Snowden considers this to be consistent with the presence of an underlying intrusive.

13 https://asud.ga.gov.au/search-stratigraphic-units/results/4970

14 https://asud.ga.gov.au/search-stratigraphic-units/results/5031

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Figure 4.2 Stuart Town local geology

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Source: Dubbo 1:250:000 sheet

4.2.1 Structure

Previous explorers have identified a single major generation of folding, followed by broad, gentle eastwest deformation of the Project area. Cleavage is mapped as being uniform throughout, striking roughly north-south and dipping steeply to the east.

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Two prominent shears have been mapped and interpreted at the eastern and western boundaries of the Project area. An interpreted west-northwest trending transverse zone is known to pass through the Project area on the southern margins, which has been identified through plunge changes that are interpreted to reflect inferred blind faults (Figure 4-3).

Figure 4.3 Stuart Town structure and interpreted transverse zone

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Source: 1:250,000 Dubbo map sheet. The red circular ring represents the coincident gravity/magnetic anomaly (refer Section 4.2.2 below).

4.2.2 Geophysics

Previous explorers have accessed publicly available geophysical data to assist in geological interpretation of Stuart Town. Early reports describe ground-based gravity, ground-magnetic and Induced Polarity (IP) surveys[15] . These were limited in area and the historical data of limited usefulness in the modern context.

Snowden recommends that an airborne geophysical program be commissioned, including gravity, magnetics and radiometrics and that the resultant data be professionally interpreted.

Publicly available regional airborne magnetic, gravity and radiometric survey data has been used to correlate previous ground-based surveys. Previous explorers have interpreted a blind intrusive unit below the historical gold mine workings[16] , based on then-available magnetic and gravity geophysical information and surface mapping of rhyolite (Figure 4-4).

15 NSWGS GS1981_185, Kratos Uranium NL, IP and gravity surveys between 1981 and 1983, Reports R00015387 to R00015391.

16 NSWGS GS1983_279, Report R00014680

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Preliminary modelling of the magnetic/gravity feature indicated a source lying 200 m below the surface, of approximately 1,200 m diameter and extending to a depth of 1,700 m. Further historical work included a gradient array IP survey and six percussion holes.

The gradient array survey was hampered by the proximity of high voltage powerlines, but some anomalies were detected which were interpreted to have been possibly related to sulphide alteration.

In 1984, a limited program of RC drilling conducted by Freeport of Australia Inc. was based on both geophysical surveys and soil sampling. The results indicated that the rhyolite breccia at Quartz Hill is associated with arsenic (As) values. These include an intersection of 15.5 m at 0.32% As from 30 m depth and an associated subtle gold anomaly of 0.04 g/t Au in hole PH4, and 8.0 m at 0.40% As with a subtle gold anomaly of 0.04 g/t Au in hole PH3 from 72 m depth[16] . The larger Manna Hill and Specimen Hill workings remain untested.

Snowden cautions that these results are historical and should be treated with appropriate caution but are considered to be reliable in the context of indicating geological prospectivity. Snowden considers that the presence of anomalous As values to be significant in the context of intrusive-related gold mineralisation, with reference to gold mineralisation in the intrusive Lolworth-Ravenswood Block of North Queensland. Snowden considers this analogy to be directly applicable to Stuart Town (refer Section 4.2.3 below).

Figure 4.4 Central Stuart Town magnetic image

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Source: GSNSW. First vertical derivative, total magnetic intensity, interpreted intrusive circled in blue.

4.2.3 Mineralisation

The NSWGS identifies 80 lode gold deposits within the Project area, which includes 43 historical mines and numerous alluvial gold workings. The mines that have been the focus of most of the exploration programs are Quartz Hill, Specimen Hill, and Kaiser Wilhelm mines (Figure 4-2). All except two of the mines lie within the Cunningham Formation and Crudine volcaniclastics.

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The field was initially worked between 1851 and 1910, with most activity during the late 19[th] century. Recorded production is 5.3 tonnes of gold, but it is apparent from early reports that the actual production, particularly from artisanal workings, was significantly greater. Historically reported head grades from Mines Department records[17] were in the order of 25 g/t to 30 g/t, consistent with hand-picking of ore to be carted to batteries and amalgam tables.

Gold was recovered from hard-rock mining of lodes or veins; significant and extensive alluvial workings, both artisanal and by commercial dredges which operated until the 1950s and from deep leads beneath Tertiary basalts covering streambeds.

The NSW Mines Department records document the annual production sources and mine types for the field. The longest running operation was the Manna Hill gold mine which continued production until 1914.

Site inspection by Snowden indicates there are substantially more workings than those in the literature, and Snowden understands from examination of NSWGS data that the Stuart Town area has the greatest concentration of historical workings in NSW, outside of the Cadia Valley.

The primary gold mineralisation is structurally controlled and orogenic and occurs in quartz veins from 10 cm to 1.2 m thick, mostly striking northward and dipping steeple eastward, consistent with the lineation of the synclines and anticlines that control schistosity and dominate the surface structure of the area. There are numbers of workings that strike counter to the major lineation, indicating a Riedel[18] control to the structure.

Historical reports indicate that the gold is mostly free milling and several stamp batteries were in operation at various times. Minor gangue sulphides include pyrite and arsenopyrite with reports of copper minerals in some places. Mining appears to have ceased when sulphides were encountered, a practise consistent with metallurgical processing techniques of the time.

Workings were mostly shallow, with the deepest workings of 65 m recorded at Kaiser Wilhelm. The topography allowed several deposits to be worked by adits at various levels in the hillsides. The field appears to have not attracted significant capital in the manner that Western Australian gold operations of the period, possibly a result of tenure limitations. Field observation by Snowden of the workings indicates that several, parallel veins were worked at many locations, indicating the presence of stacked lode systems. The records show that the thickness and tenor of the gold decreased with depth in most mines.

The emplacement of the gold-bearing quartz veins appears to have been a late-stage event following the major episode of folding in the project area. The veins are structurally controlled by faulting, jointing, cleavage and bedding planes. Seventeen of the major historical mines are spatially associated with the Western Shear and three of the major mines are spatially associated with the Eastern Shear. Gold mineralisation occurs intermittently along approximately 6 km of the Western Shear and 2 km of the Eastern Shear.

Cadia

Newcrest’s 38 Moz[19] Cadia Valley gold mining operations are the largest mining operation in the district and offer an analogue to the potential intrusive-related gold system inferred to underlie Stuart Town.

The Cadia deposits are 40 km south of Stuart Town and are part of a Late Ordovician–Early Silurian porphyry alteration-mineralisation system that extends over an area of at least 6 km x 2 km within the Ordovician Molong Volcanic Belt of the Palaeozoic Lachlan Fold Belt[20] . The Molong Volcanic Belt comprises a suite of intermediate to basic volcanics, volcaniclastics, co-magmatic intrusions, and limestones. The suite is probably part of a subduction-related island arc disrupted by later tectonism[21] . In the Cadia area the volcanics and intrusions are shoshonitic[22] .

17 NSWGS Report ARC066

18 https://en.wikipedia.org › wiki › Strike-slip tectonics

19 Newcrest Mining Limited – Explanatory Notes to the Annual Mineral Resources and Ore Reserves Statement – 31 December 2018

20 Newcrest Mining Staff, 1997

21 Glen et al, 1997

22 Blevin, 1998

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Mineralisation styles at Cadia include sheeted quartz vein, stockwork quartz vein, disseminated and skarn, all of which are genetically related to a relatively small, predominantly monzonitic intrusion into volcaniclastics, lavas, subvolcanic intrusions and minor limestone. Emplacement of the Cadia Hill Monzonite was probably facilitated and localised by the development of a major northwest to southeast trending dilational structural zone, which is evident in magnetic data.

The discovery of Cadia occurred over a number of years, with explorers initially being attracted to the high density of historical workings over a small area. An intrusive source was inferred from geophysical data and mapping and initial stratigraphic drilling returned anomalous, but modest gold values. Persistence with drilling eventually revealed the size and tenor of the deposits.

Ravenswood

Resolute’s Ravenswood 6 Moz[23] gold mining operations occur in a geologically and structurally comparable situation to Stuart Town and offer a possibly more accurate analogue than Cadia.

The Ravenswood goldfield is located about 100 km south of Townsville and exploits Carboniferous structurally controlled orogenic quartz veins emplaced in a Silurian granite. These are apparently zoned away from an inferred central intrusive, possibly exploiting a major fault and dyke structure. Mineralisation varies from massive quartz lodes with a gold-copper-tellurium association through a gold-zinc-bismuth and gold-arsenic-lead association to a silver-arsenic-antimony association (Figure 4-5). The nearby Mount Wright mine exploits a Carboniferous rhyolite intruding and Ordovician granite[24] .

Significantly, the Sarsfield-Nolans mine exploits a structurally controlled sheeted vein system with a goldarsenic-lead association, which Snowden considers to be analogous to the historical workings at Stuart Town.

At Stuart Town, Waratah Resources Limited returned an intersection of 50 m at 0.3% As from RC drilling at Quartz Hill in 2010[25] . Snowden cautions that this Exploration Result was reported in accordance with then current standards and is historical in nature and not reported in accordance with the provisions of the JORC Code and should be treated with appropriate caution, but the Competent Person considers that it attracts sufficient confidence to indicate geological prospectivity.

This is further supported by the arsenic-bismuth soil results at Stuart Town returned by CRA Exploration Ltd (CRAE) in the mid-1990s (refer Section 5 below). Explorers were initially attracted to the intense concentration of old workings at the Nolans-Sarsfield area, seeking orogenic lode-gold deposits of the Charters Towers type. Exploitation and exploration over time revealed the size of the field and the relationship between intrusions and mineralisation.

23 Resolute ASX Announcement, 22 July 2019

24 www.jcu.edu.au/__data/assets/pdf_file/0005/597587/Updated-Geology-Metallogeny-Charters-Towers_Beams-S.pdf 25 NSWGS Report GS2013_1267 Report04462

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Figure 4.5 Stuart Town/Ravenswood analogy

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Source: Beams and Morrison, Characterization of Intrusion-related hydrothermal mineral systems in the Charters Towers Region, Northeast Queensland, James Cook University, 2017

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Alkane Resources Limited

Alkane’s Northern Molong porphyry project is located some 20 km north-northwest of Stuart Town in the Molong Zone, which hosts the Cadia mineralisation and occurs parallel to and abuts the Hill End Zone, which hosts the Stuart Town mineralisation (refer Section 4.1 above).

In a public statement to the ASX dated 9[th] September 2019, Alkane reports significant drill intersections from its Boda, Kaiser and Glen Hollow prospects, which been mapped over a north-south strike length of 5 km and 1 km wide corridor defined by monzonite intrusives, extensive alteration and widespread lowgrade gold-copper mineralisation.

Figure 4.6 Alkane prospects

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Source: ALK ASX release, 9 September 2019

Snowden refers to Alkane’s recent public announcement regarding these exploration results[26] , which states that at Boda, a single diamond drillhole followed up gold mineralisation (311 m at 0.28 g/t Au[27] ) identified in RC drilling conducted in 2016 and intersected a thick zone of gold and copper mineralisation for 502 m at 0.48 g/t Au and 0.2% Cu from 211 m. At Alkane’s Kaiser prospect, five RC drillholes and a single diamond drillhole returned 40 m at 1.30 g/t Au from surface and 2 m at 3.24 g/t Au from 25 m (drillhole KSRC027) and 0.26% Cu, and 32 m at 0.53 g/t Au and 0.27% Cu (drillhole KSRC029).

At Glen Hollow, two RC drillholes returned 42 m at 0.27 g/t Au and 0.19% Cu from surface (drillhole COMRC045).

26 ALK ASX Announcement 9 September 2019

27 ALK ASX Announcement 6 May 2016

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The Competent Person considers that Alkane’s results have been reported in accordance with the JORC Code and refers readers to the attendant Table 1 in its public statements and that it attracts an appropriate degree of reliability in the context of this document.

In the interests of balanced reporting, to Snowden’s knowledge to date, similar results have not been gathered in the Hill End Zone. The work of previous explorers in the Hill End Zone indicates that a similar intrusive-related model is applicable to Stuart Town and that such results are conceptually possible but do not attract any degree of certainty, given the sparsity of exploration undertaken to date.Snowden considers these results to be relevant to the Stuart Town mineralisation given spatial proximity and geological relationship. Alkane’s intrusive related geological model is similar to that proposed for Stuart Town. Snowden comments that the presence of monzonite intrusives and copper bearing a strong resemblance to Cadia, which is located in the same geology to the south. Monzonites have not yet been identified at Stuart Town. Stuart Town has not returned copper values of this tenor in previous exploration but has returned a strong arsenic association.

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5 HISTORICAL EXPLORATION

The Stuart Town area has a history of artisanal exploration since the 1850s, much of which was uncoordinated and directed toward the identification of placed deposits for dredging.

Modern exploration was initiated by Kamilaroi Ltd and Aquitaine Australia Minerals Pty Ltd, which explored the general Stuart Town region between 1970 and 1975. Most of this work was focused on an area to the southwest of the Project area.

The Project area was held as E1439 by Kratos Uranium NL (Kratos) between 1980 and 1985, being explored in joint venture with Freeport of Australia Inc. during this time. Kratos commissioned Geoscience Field Surveys Ltd to undertake a limited study of the regional geology of the exploration licence area and an evaluation of the gold mines located within it.

Geoscience Field Surveys Ltd concluded that there was low potential for establishing a high tonnage mining operation on an extension of one or more of the historical mines, but that the area had good potential for either:

High tonnage gold/base metal deposits in acid volcanics analogous to that exploited at Cadia
Carlin-type fine grained gold mineralisation in carbonates within the sequence at Stuart Town.

Snowden concurs with the Cadia model but discounts the Carlin-type model as being unsupported by subsequent understanding of the geology.

Kratos conducted detailed geochemical soil surveys over two of the historical mines, Specimen Hill and Quartz Hill, together with underground chip sampling at Specimen Hill. The geochemical survey indicated that, although substantial sulphide mineralisation had been encountered at the mines, the main geochemical anomaly lay to the north.

Work at Specimen Hill indicated that the mineralisation exploited by the underground workings was evident on the surface over a strike length of at least 150 m. Underground sampling indicated erratic gold distribution.

Kratos commissioned a reconnaissance gravity survey to explore for an intrusive source beneath the Stuart Town area. The most prominent feature identified by this survey was a residual gravity low centred in the region of the Quartz Hill and Manna Hill mines. The feature was coincident with the centre of a magnetic identified in government data (refer Section 4.2.2 above).

Subsequent major explorers included CRAE (now Rio Tinto Limited) and Carpentaria Exploration Limited (CEC, a subsidiary of Mount Isa Mines Limited). These explorers were seeking a Cadia-style and scale deposit and mostly centred their attention on the Molong Area, to the south and west of Stuart Town.

5.1.1 Stuart Town historic drilling

Several previous explorers have engaged in drilling at Stuart Town and Snowden has referenced the publicly available descriptions of the results of that drilling (Figure 5.1).

These results are historical in nature and may not have been reported in accordance with the JORC Code or its predecessors and are to be treated with appropriate caution. The Competent Person considers that these results have been gathered in accordance with appropriate practice at the time and provide a reasonable but not absolute indication of the prospectivity of the Stuart Town geology.

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Figure 5.1 Stuart Town historic drilling

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Source: KAU

5.2 Exploration summary

More recent explorers have been juniors and have for the most part been restricted by funding. KAU has collated the findings of the more productive explorers:

5.2.1 Kratos Uranium NL (1980 to 1982)

Philosophy

Literature search with regard to the prospectivity the historical mines and development of a geological mineralisation model[15] .

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Work undertaken

Historical mines were mapped and chip sampled and the general geology mapped and related to publiclyavailable geophysical data.

Results and conclusions

Kratos concluded that potential for a large-scale mining appeared to be limited due to the narrowness and intermittent occurrence of gold-bearing veins. Kratos noted that the extent and behaviour of the same veins at depth remained unknown due to the lack of drilling and these should be assessed by way of drilling to establish whether there are deposits of sulphide ore that early miners would have had difficulty treating.

Kratos developed the intrusive-related model during this period, being particularly interested in the Quartz Hill rhyolite.

5.2.2 Kratos-Stellar Exploration Group (1983, first reporting period)

Philosophy

Undertake soil geochemical surveys at Quartz Hill and Specimen Hill historical mining activity to determine whether this method of exploration would delineate any extension of anomalous metal values beyond the general area of the existing workings.

Work undertaken

Soil geochemistry for copper, lead and arsenic was undertaken for 158 samples at Quartz Hill and 91 samples at Specimen Hill, spaced at 25 m intervals on lines 50 m apart. A total of 21 rock chip samples were taken from the Quartz Hill adit and 45 rock chip samples from the Specimen Hill adit. Soil samples were sieved to -80# and assayed for arsenic, copper and lead; chip sampling involved channel sampling of underground workings.

Results and conclusions

The soil samples identified an arsenic anomaly at Quartz Hill associated with rhyolite.

Two areas of anomalism at Specimen Hill were associated with old workings, and weaker anomalism associated with a tailings dump, possibly a result of contamination and minor workings in the west of the area:

One of the anomalies highlighted the area occupied by the adits, open cuts and pits and defined the outcrops of the sheer zone in the area of the workings. The values along the shear zone fell off to the northwest and southeast.
The second anomaly was a circular zone situated to the north of the adit indicating that the adit had not been sited optimally. Underground samples taken in the adit were regarded as indicative of background gold levels within the intrusion, away from the main body of any higher-grade mineralisation which may be inferred from the geochemical anomaly.

Underground sampling confirmed the highly erratic nature of gold values and the conclusion drawn was drawn that although continuous sampling may provide a clearer idea of the grade of mineralisation, only a large bulk sample would give reliable grade information.

The rock chips from the Quartz Hill adit returned disappointing results, with the best result being 0.47 g/t Au. Six of the rock chip samples taken from the Specimen Hill adit (number 2) returned encouraging assay results, the highest being 120 g/t Au and 7.3 g/t Ag[16] . A more thorough sampling program of the Specimen Hill number 2 adit was recommended.

Snowden cautions that these results are historical and have not been reported in accordance with the JORC Code and should be treated with appropriate caution, but the Competent Person considers them to attract sufficient confidence to indicate geological prospectivity.

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5.2.3 Kratos-Stellar Exploration Group (1983, second reporting period)

Philosophy

Follow up soil sampling of the Quartz Hill and Specimen Hill prospects, follow-up underground channel sampling at Specimen Hill and initial soil sampling at the Post Office, Redfern and Kaiser Wilhelm mines.

Work undertaken

Soil samples previously collected were re-analysed for mercury and silver. Soil samples were collected from the Post Office, Redfern and Kaiser Wilhelm grids at a nominal depth of 20 cm. At Specimen Hill, adit numbers 1, 2 and 3 were resampled to compare previously reported gold values. In all, 46 samples were collected; six from adit number 1, 22 from adit number 2, and 18 from adit number 3.

Results and conclusions

The Quartz Hill soil geochemistry identified several areas that warranted further work. Kratos concluded that the geometry of the geochemical anomalies indicated that the rhyolite intrusion had probably acted as a source, rather than a host for any mineralisation in the area and was encouraged by As, Hg, and Ag geochemistry. Kratos proposed geophysical testing using surface electrical techniques to delineate sulphide concentrations.

Recommendations included bedrock gold geochemistry across the rhyolite/sediment boundary and into the sediments to assist in determining whether the rhyolite had acted as a mineralising source and therefore whether there was an enrichment of gold in the sediments.

Detailed gravity traversing was proposed to determine the geometry of the rhyolite intrusion and the likelihood that it was part of a larger mineralising system at depth.

5.2.4 Kratos Uranium NL, Joint Venture with Freeport of Australia Limited (1984)

Philosophy

Determine the prospectivity of old mines in the area, particularly Quartz Hill.

Work undertaken

Soil sampling over a 50 m grid at the Quartz Hill mine, IP survey, adit sampling and percussion drilling (six holes) of Quartz Hill.

Results and conclusions

Adit sampling yielded low gold grades but the amount of brecciation, silicification and sulphidisation associated with high arsenic values supported the presence of a substantial hydrothermal system.

Kratos concluded that quartz stockworks in the sediments at Kaiser Wilhelm and Specimen Hill remained prospective. As a result of negligible assays from the Quartz Hill drilling program, no further exploration on the Quartz Hill prospect was proposed. However, targets such as Kaiser Wilhelm and Specimen Hill remained prospective.

5.2.5 Carpentaria Exploration Company Pty Ltd (1984 to 1986)

Philosophy

Exploration of the Ordovician Molong Rise to the west of Stuart Town.

Work undertaken

No work was carried out at Stuart Town.

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Results and conclusions

Access to the area of interest was denied and no effective work was completed; however, CEC noted that:

“…just to the east of the licence area is the important former gold producing area of Stuart Town. Here approximately 5.4t of gold were produced from both alluvial and reef area. The reef gold principally occurred in narrow quartz veins within slates and siltstones of the Cunningham Formation. The origin of the gold still unknown, however magnetic and radiometric data suggest there is the possibility of a deepseated intrusive body occurring within the area which may be the source of gold mineralisation” .[28]

5.2.6 CRA Exploration Pty Ltd (1992 and 1993)

Philosophy

To test the potential for economic gold mineralisation associated with historically mined high-grade shoots within large low grade disseminated mineralisation.

Work undertaken

Purchase of airborne and radiometric data, literature search, geochemical anomaly follow-up, and collection of 48 rock chip samples[29] .

Results and conclusions

CRAE confirmed that previous mining and exploration activity in the area focused on narrow shear zone hosted quartz reefs and concluded that gold associated with the massive white, sometimes banded buck quartz is nuggety with no consistent base metal association. Calcite gangue was noted in some of the higher-grade samples. Detailed mapping to record the location of all shafts was recommended. In addition, the geological mapping of a 10 km x 14 km area centred on Stuart Town and a stream sediment orientation program was proposed.

5.2.7 CRA Exploration Pty Ltd (1994)

Philosophy

To test the potential for economic gold mineralisation associated with historically mined high-grade shoots within large low-grade disseminated mineralisation.

Work undertaken

Regional geological mapping, review of publicly available stream sediment data and collection of 12 rock chip samples.

Results and conclusions

In addition to the widespread gold anomalism throughout the Project area, the stream sediment sampling review identified coincident gold, arsenic, bismuth and antimony anomalism east of Stuart Town Common. The geochemical anomalism appears coincident with a large 4 km x 4 km aeromagnetic low. Recommendations were to conduct an improved soil sampling program, and the selection of targets for reconnaissance RC drilling in the Stuart Town area.

28 NSWGS Report 1984_385 29 NSWGS Report 1993_084

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5.2.8 CRA Exploration Pty Ltd (1995)

Philosophy

To test the potential for economic gold mineralisation associated with historically mined high-grade shoots within large low-grade disseminated mineralisation.

Work undertaken

A total of 2,892 soil samples, 35 rock chip samples were taken over the Stuart Town area[30] .

Results and conclusions

Soil sampling returned anomalous gold-arsenic-antimony geochemistry near the Princess Alex and Kaiser Wilhelm workings. Rock chip sampling of these quartz veins returned maxima of 15 g/t Au and 2.9 g/t As[31] . The gold-arsenic-antimony soil geochemistry anomaly in the Kaiser Wilhelm area lies within an area of associated copper, cobalt and nickel, resembling a fold closure. Other potential targets were highlighted.

Snowden cautions that these are historical exploration results and are to be treated with appropriate caution, but the Competent Person considers that these attract appropriate reliability to indicate geological prospectivity.

5.2.9 CRA Exploration Pty Ltd (1996)

Philosophy

To drill RC holes to test zones of anomalous gold-arsenic-antimony soil geochemistry coincident with Kaiser Wilhelm and Princess Alex workings.

Work undertaken

Eleven RC holes were drilled for 1,113 m.

Results and conclusions

Drilling returned gold grades[32] that were considered to be anomalous, but not economic and no further work was recommended, as the target of large tonnage disseminated gold mineralisation was not met.

5.2.10 LFB Resources NL (1997 to 1999)

Philosophy

General appraisal of the prospectivity of the tenement.

Work undertaken

Rock chip sampling and evaluation of previous exploration.

Results and conclusions

The licence was relinquished on the basis that the cost of locating viable gold deposits using existing technology would probably be too high.

Recommendations made by LFB Resources NL were to drill test the laterally continuous and relatively wide Ginger Reefs lode system located within the Town Common and explore via drilling for a deepsourced intrusive source for gold mineralisation.

30 NSWGS Report 1996_109

32 NSWGS Report 1996_105

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5.2.11 Kanimblan Mines Pty Ltd (2002 and 2003)

Philosophy

Not stated.

Work undertaken

Review of previous exploration reports and re-evaluation of archival geochemical and geophysical data as well as interpretation of airborne geophysical data.

Results and conclusions

The work defined various targets related to an inferred deep-seated porphyry system that may have been the source of historical gold production.

Airborne geophysical data was purchased and processed by Kanimblan Mines Pty Ltd to identify a magnetic low that was interpreted to reflect magnetite depletion related to a deep intrusive. A secondary source, of similar magnetic susceptibility, was observed at shallow depth that was thought to constitute a relatively easy target to evaluate. Kanimblan Mines Pty Ltd was unable to attract joint venture participation to test these models.

5.2.12 Ironbark Gold Limited and Waratah Gold Limited (2007 to 2011)

Philosophy

Development of the intrusive model.

Work undertaken

Review of previous exploration reports, rock chip sampling and drilling of three diamond holes for 1,041 m.

Results and conclusions

Snowden observed during its site visit that the drilling was poorly targeted, based on the orientation of the holes and reportedly returned no material results.

5.3 Snowden commentary

Snowden considers that the intrusive-related gold model has not been adequately tested by previous explorers despite its first being postulated in the 1980s. Exploration has been poorly coordinated over time. The companies involved have not committed sufficient funding to drill the deep stratigraphic holes required to identify the location and nature of the inferred intrusive.

Snowden considers that remodelling of the Kanimblan Mines Pty Ltd geophysical data and compilation of the historical soil sampling results with mapping by the various explorers over time would, when compiled into a modern GIS database, provide sufficient information on which to plan and locate a stratigraphic drilling program.

Of particular interest is Waratah’s intersection of 50 m at 0.3% As from RC drilling at Quartz Hill in 2010, supported by the arsenic-bismuth soil results returned by CRAE in the mid-1990s. The Competent Person considers these results to be historical in nature but attract sufficient confidence to indicate geological prospectivity.

Snowden concludes that there is evidence to support the presence of intrusive-related gold mineralisation.

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6 EXPLORATION STRATEGY

Subject to a successful Initial Public Offering, KAU has an exploration budget of approximately $2,500,000, for its first two financial years, which includes exploration expenditure, tenement rents and rates, office and administration costs and salaries.

KAU is aware that exploration success or failure and new circumstances have the potential to affect the manner in which the funds are ultimately applied and has explained to Snowden that it reserves the right to alter the way funds are applied.

Snowden has interviewed KAU directors and worked with them on a number of assignments over a period of some years and considers these personnel to be suitably qualified to implement the proposed exploration strategy.

Snowden comments that the most valuable asset for any mining or exploration company is its knowledge of its mineral assets and observes a significant volume of data has been collected by numerous explorers over a long period of time. Snowden further observes the effort that has been put into collating this information.

Table 6.1 KAU proposed exploration activities

Project area	Activity	Year 1 ($)	Year 2 ($)	Total ($)
Stuart Town	Detailed mapping Assays Geophysical surveys Reverse circulation (RC) drilling Diamond drilling	60,000 20,000 400,000 200,000 n/a	20,000 60,000 n/a 200,000 700,000	80,000 80,000 400,000 400,000 700,000
Service costs	Heritage and tenement administration Geological services and field labour Administration	50,000 250,000 100,000	40,000 300,000 100,000	90,000 550,000 200,000
Total		1,080,000	1,420,000	2,500,000

Source: KAU

6.1 Snowden opinion

Snowden considers that the project has some similarities to Resolute’s 6 Moz Ravenswood field[33] and is prospective for large scale intrusion-related gold systems and is encouraged by the following points:

Significant historical production described in records kept by the NSW Department of Primary Industry[3] as exceeding 170,000 ounces. Au sourced from many relatively small lode and alluvial gold sources. No major source or pathway has yet been identified for the gold mineralisation.
Large interpreted thrust fault zones provide a favourable structural setting for an interpreted auriferous intrusive felsic body.
Examination of publicly available geophysics indicates that coincident magnetic and gravity anomalies support the interpretation of a large, relatively shallow intrusive felsic unit, as does a coincident potassic radiometric signature.

33 www.rml.com.au/ravenswood

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Mineralised brecciated rhyolites with accompanying high levels of arsenic returned by historical soil sampling and drilling observed at Quartz Hill may represent minor high level subvolcanic intrusives related to an underlying mineralised intrusive unit.
Government mapping indicates that the Project lies within a west-northwest transverse fault zone.
There has been no effective testing of the deep-seated intrusive model.

6.2 Snowden conclusions

Snowden concludes that KAU holds tenure over a prospective area near Orange, NSW that has potential to yield economic mineralisation and recommends that it proceed to implement its exploration strategy on listing.

Snowden concludes that the Stuart Town Project is at an early conceptual stage of exploration but its prospectivity is enhanced by the presence of the Cadia Project and recent Alkane discovery (Northern Molong project) in comparable geology.

KAU will benefit from the work by previous miners and explorers that has resulted in the identification of alluvial and lode gold mineralisation.

6.3 Snowden recommendations

Snowden recommends that structural geology work should commence in parallel with the proposed detailed mapping and geochemical sampling to provide context to the results of these exercises.

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7 REFERENCES

Author	Date	Title	GSNSW data reference
ASARCO(Australia)PryLtd	1980	Annual Report BurrendongProject	1980/428
AuriCula Mines Pty Ltd	2006	Final Report EL 6185 Final Report EL 6185	2006/277 2006/276
CEC	1984	Final Report EL2242 & EL2243	1984/385
Cluff Resources Pacific Limited	1988	Reports, EL2890 Reports, EL2890, 2139 & 2631	1988/014 1988/238
CNGM Resources Limited	2014	Annual Report EL 8044	2014/329
Compass Resources NL	1990	Reports, EL3373	1990/165
CRAE	1992 1993 1994 1995 1996 1997	Stuart Town Group of ELs: Annual Report	1982/459 1993/084 1996/105 1996/108 1996/109 1997/140
Freeport of Australia Inc.	1984	Reports EL 1439	1983/279
Ironbark Gold Limited	2007 2008 2006	Annual Report EL 6575 Annual Report EL 6575 Information Memorandum (unpublished)	2007/422 2008/545 2008/545
LFB Resources Limited	1999 1998 1999 1998 1998 2000	Final Report EL5249 Final Report EL4023 Annual Report EL4225 Annual Report EL4023 & 41265 Annual Report El 4023, 4126 and 4225 Final Report El4126	1999/333 1998/316 1999/331 1999/332 1998/395 2000/015
NSW Department of Primary Industry	2007	Stuart Town Gold	Primefact 562
NSW Geological Survey	1999 2014 1975 1999 1975	Dubbo 1:250,000 Geological Sheet Bathurst 1:250,000 Metallogenic Sheet Dubbo 1:250,000 Metallogenic Sheet Dubbo 1:250,000 Geological Sheet Explanatory Notes www. minview.geoscience.nsw.gov Annual Report Compilation, Stuart Town 1875 - 1975	ARC066
PLD Corporation Limited	2013	Annual Report EL7948	2014/361
Kanimblan Mines Pty Ltd	2002 2002	Annual Report EL 5877 Final Report EL 5877	2002/698 2003/359
Kratos-Stellar Exploration Group Limited	1980 1983	Reports, Stuart Town	1981/185 1983/279
Newmont Holdings Limited	1982	EL1839 Annual Report	1982/459
Rio Tinto Exploration	1998	EL 4199: Final Report	1998/397
Sunshine Gold Search PtyLtd	1984	Reports, EL2153	1984/206
Waratah Gold Limited	2009	Annual Report EL6575	2010/891
Waratah Resources Limited	2013	Annual Report EL6575	2013/1267

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8 ABBREVIATIONS AND UNITS

Abbreviation/unit	Definition
% Ag Alkane As ASX Au Bi CEC Chase cm IGR CRAE Cu EL ELA GSNSW g/t IP kg km km2 Kratos KAU m mH Moz mW Newcrest Pb pXRF Resolute RC Sb Snowden Zn	percent silver Alkane Resource Limited (ASX: ALK) arsenic Australian Securities Exchange gold bismuth Carpentaria Exploration Company Limited (formerly a subsidiary of Mount Isa Mines Limited) Chase Metals Pty Ltd centimetre(s) Competent Person’s Report CRA Exploration Limited (now Rio Tinto) copper exploration licence exploration licence area Geological Survey of New South Wales grams per tonne Induced Polarity, gravity and magnetics; geophysical exploration techniques; For a brief explanation: www.en.wikipedia.org/wiki/Exploration_geophysics kilogram(s) kilometre(s) square kilometres Kratos Uranium NL Kaiser Reef Limited metre(s) metre high million ounces metre wide Newcrest Mining Limited (ASX: NRL) lead Portable X-Ray Fluorescence, a field analytical technique; for a brief explanation: www.thermofisher.com.aul Resolute Mining Limited (ASX: RES) Reverse circulation – a pneumatic percussion drilling technique. For an explanation refer: www.castledrill.com/an-introduction-to-reverse-circulation-drilling/ antimony Snowden Mining Industry Consultants Pty Ltd zinc

Abbreviation/unit

Definition

%
Ag
Alkane
As
ASX
Au
Bi
CEC
Chase
cm
IGR
CRAE
Cu
EL
ELA
GSNSW
g/t
IP
kg
km
km2
Kratos
KAU
m
mH
Moz
mW
Newcrest
Pb
pXRF
Resolute
RC
Sb
Snowden
Zn

percent
silver
Alkane Resource Limited (ASX: ALK)
arsenic
Australian Securities Exchange
gold
bismuth
Carpentaria Exploration Company Limited (formerly a subsidiary of Mount Isa Mines Limited)
Chase Metals Pty Ltd
centimetre(s)
Competent Person’s Report
CRA Exploration Limited (now Rio Tinto)
copper
exploration licence
exploration licence area
Geological Survey of New South Wales
grams per tonne
Induced Polarity, gravity and magnetics; geophysical exploration techniques; For a brief
explanation: www.en.wikipedia.org/wiki/Exploration_geophysics
kilogram(s)
kilometre(s)
square kilometres
Kratos Uranium NL
Kaiser Reef Limited
metre(s)
metre high
million ounces
metre wide
Newcrest Mining Limited (ASX: NRL)
lead
Portable X-Ray Fluorescence, a field analytical technique; for a brief explanation:
www.thermofisher.com.aul
Resolute Mining Limited (ASX: RES)
Reverse circulation – a pneumatic percussion drilling technique. For an explanation refer:
www.castledrill.com/an-introduction-to-reverse-circulation-drilling/
antimony
Snowden Mining Industry Consultants Pty Ltd
zinc

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Appendix A JORC Code Table 1

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JORC Code, 2012 Edition – Table 1 report template

Section 1 Sampling Techniques and Data

(Criteria in this section apply to all succeeding sections.)

Criteria	JORC Code explanation	Commentary
Sampling techniques	• Nature and quality of sampling (eg cut channels, random chips, or specific specialised industry standard measurement	•Information on sample collection was not recorded but the Competent Person considers that the documentation
	tools appropriate to the minerals under	referenced in the text for each operator
	investigation, such as down hole gamma	indicates that samples were collected in
	sondes, or handheld XRF instruments, etc).	accordance with then-current standards
	These examples should not be taken as	and forms a reasonable basis on which to
	limiting the broad meaning of sampling.	form an opinion.
	• Include reference to measures taken to
	ensure sample representivity and the
	appropriate calibration of any measurement
	tools or systems used.
	• Aspects of the determination of
	mineralisation that are Material to the Public
	Report.
	• In cases where ‘industry standard’ work has
	been done this would be relatively simple
	(eg ‘reverse circulation drilling was used to
	obtain 1 m samples from which 3 kg was
	pulverised to produce a 30 g charge for fire
	assay’). In other cases more explanation
	may be required, such as where there is
	coarse gold that has inherent sampling
	problems. Unusual commodities or
	mineralisation types (eg submarine nodules)
	may warrant disclosure of detailed
	information.
Drilling techniques	• Drill type (eg core, reverse circulation, open- hole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (eg core	•1984 Drilling conducted by Freeport of Australia was Reverse Circulation Drilling. •Drilling conducted by Waratah gold Limited
	diameter, triple or standard tube, depth of	was non-oriented standard NQ Diamond
	diamond tails, face-sampling bit or other	Core Drilling.
	type, whether core is oriented and if so, by
	_what method, etc). _
Drill sample recovery	• Method of recording and assessing core and chip sample recoveries and results assessed.	•Drilling recoveries not recorded but the Competent Person considers that the documentation referenced in the text for
	• Measures taken to maximise sample	each operator indicates that samples were
	recovery and ensure representative nature	collected in accordance with then-current
	of the samples.	standards and forms a reasonable basis on
	• Whether a relationship exists between	which to form an opinion.
	sample recovery and grade and whether
	sample bias may have occurred due to
	preferential loss/gain of fine/coarse material.
Logging	• Whether core and chip samples have been geologically and geotechnically logged to a	•All drill holes were logged in their entirety. •Logging was qualitative.
	level of detail to support appropriate Mineral
	Resource estimation, mining studies and
	metallurgical studies.
	• Whether logging is qualitative or quantitative
	in nature. Core (or costean, channel, etc)
	photography.
	• The total length and percentage of the
	relevant intersections logged.

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Criteria	JORC Code explanation	Commentary
Sub-sampling techniques and sample preparation	• If core, whether cut or sawn and whether quarter, half or all core taken. • If non-core, whether riffled, tube sampled, rotary split, etc and whether sampled wet or dry.	•Half Core samples were sawn using a core saw •No recorded information for non-core samples.
	• For all sample types, the nature, quality and
	appropriateness of the sample preparation
	technique.
	• Quality control procedures adopted for all
	sub-sampling stages to maximise
	representivity of samples.
	• Measures taken to ensure that the sampling
	is representative of the in situ material
	collected, including for instance results for
	field duplicate/second-half sampling.
	• Whether sample sizes are appropriate to the
	grain size of the material being sampled.
Quality of assay data and laboratory tests	• The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total. • For geophysical tools, spectrometers, handheld XRF instruments, etc, the	•Industry standard assay techniques used that are appropriate for gold exploration. The Competent Person considers that the documentation referenced in the text for each operator indicates that samples were collected in accordance with then-current
	parameters used in determining the analysis	standards and forms a reasonable basis on
	including instrument make and model,	which to form an opinion
	reading times, calibrations factors applied
	and their derivation, etc.
	• Nature of quality control procedures adopted
	(eg standards, blanks, duplicates, external
	laboratory checks) and whether acceptable
	levels of accuracy (ie lack of bias) and
	precision have been established.
Verification of sampling and assaying	• The verification of significant intersections by either independent or alternative company personnel. • The use of twinned holes.	•Historic reports have been reviewed by independent and company personnel. •No holes have been twinned. •Data entered onto paper logs
	• Documentation of primary data, data entry	•There have been no adjustments to assay
	procedures, data verification, data storage	data.
	(physical and electronic) protocols.
	• Discuss any adjustment to assay data.
Location of data points	• Accuracy and quality of surveys used to locate drill holes (collar and down-hole surveys), trenches, mine workings and other	•Holes have not been surveyed. •Kaiser Reef has recorded all data point in MGA 1994 Z 55 coordinates.
	locations used in Mineral Resource
	estimation.
	• Specification of the grid system used.
	• Quality and adequacy of topographic
	control.
Data spacing and distribution	• Data spacing for reporting of Exploration Results. • Whether the data spacing and distribution is sufficient to establish the degree of	•No Mineral Resource has been estimated.
	geological and grade continuity appropriate
	for the Mineral Resource and Ore Reserve
	estimation procedure(s) and classifications
	applied.
	• Whether sample compositing has been
	applied.

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Criteria	JORC Code explanation	Commentary
Orientation of data in relation to geological structure	• Whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this is known, considering the deposit type. • If the relationship between the drilling orientation and the orientation of key	•Orientation of sampling is notconsidered by the Competent Person to have introduced biases for the purpose of early-stage exploration results.
	mineralised structures is considered to have
	introduced a sampling bias, this should be
	assessed and reported if material.
Sample security	• The measures taken to ensure sample security.	•Sample security measures unknown but the Competent Person considers that the documentation referenced in the text for
		each operator indicates that samples were
		collected in accordance with then-current
		standards and forms a reasonable basis on
		which to form an opinion.
Audits or reviews	• The results of any audits or reviews of sampling techniques and data.	•Available data has been reviewed by independent and company personnel.

Section 2 Reporting of Exploration Results

(Criteria listed in the preceding section also apply to this section.)

Criteria	JORC Code explanation	Commentary
Mineral tenement and land tenure status	• Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical	•The Stuart Town Project lies within Exploration Licence 8491 held in trust for Kaiser Reef Limited in the name of Jonathan Charles Downes. The adjacent Exploration Licence Application 5854 is held in trust for
	sites, wilderness or national park and	Kasier Reef Limited in the name of Adrian
	environmental settings.	Byass Limited. The Licences lie 40km south
	• The security of the tenure held at the time	east of Wellington in NSW, adjacent to the
	of reporting along with any known	township of Stuart Town.
	impediments to obtaining a licence to	•Both the Licence and Licence Application are
	operate in the area.	in good standing.
Exploration done by other parties	• Acknowledgment and appraisal of exploration by other parties.	•Previous exploration has been completed by: `o` Kratos Uranium NL (1980-1982) `o` Kratos-Stellar Exploration Group (1983)
		`o` Kratos Uranium JV with
		Freeport of Australia (1984)
		`o` Carpentaria Exploration (194-
		1986)
		`o` CRA Exploration (1992-1996)
		`o` LFB Resources NL (1997-1999)
		`o` Kanimblan Mines (2002-2003)
		`o` Ironbark Gold Limited / Waratah
		Resources Limited (2007-2011)
		• Exploration included mapping, rock chip
		and soil sampling, limited geophysics
		and limited drilling.
Geology	• Deposit type, geological setting and style of mineralisation.	•The Project lies within the Northern part of the Hill end Trough, within largely Devonian
		volcano-sedimentary rocks of the Crudine
		Group and Cunningham Formation.
		•The primary goldis structurally controlled

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Criteria	JORC Code explanation	Commentary	Commentary
		and hosted in quartz veins.
		•There are many alluvial workings
		documented within the Licence.
Drill hole Information	• A summary of all information material to the understanding of the exploration results including a tabulation of the	•Refer Appendix B
	following information for all Material drill
	holes:
	`o` easting and northing of the drill hole
	collar
	`o` elevation or RL (Reduced Level –
	elevation above sea level in metres) of
	the drill hole collar
	`o` dip and azimuth of the hole
	`o` down hole length and interception
	depth
	`o` hole length.
	• If the exclusion of this information is
	justified on the basis that the information is
	not Material and this exclusion does not
	detract from the understanding of the
	report, the Competent Person should
	clearly explain why this is the case.
Data aggregation methods	• In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (eg cutting of high grades) and cut-off grades are usually	•All reported assays have been length weighted. •No metal equivalents have been reported.
	Material and should be stated.
	• Where aggregate intercepts incorporate
	short lengths of high grade results and
	longer lengths of low grade results, the
	procedure used for such aggregation
	should be stated and some typical
	examples of such aggregations should be
	shown in detail.
	• The assumptions used for any reporting of
	metal equivalent values should be clearly
	stated.
Relationship between mineralisation widths and intercept lengths	• These relationships are particularly important in the reporting of Exploration Results. • If the geometry of the mineralisation with respect to the drill hole angle is known, its nature should be reported. • If it is not known and only the down hole	•The geometry of the mineralisation is not well understood.
	lengths are reported, there should be a
	clear statement to this effect (eg ‘down
	_hole length, true width not known’). _
Diagrams	• Appropriate maps and sections (with scales) and tabulations of intercepts	Refer to: • Figure 4.2
	should be included for any significant	•	Figure 4.3
	discovery being reported These should	•	Figure 4.4
	include, but not be limited to a plan view of	•	Figure 5.1
	drill hole collar locations and appropriate
	sectional views.
Balanced reporting	• Where comprehensive reporting of all Exploration Results is not practicable, representative reporting of both low and	•All results have been reported.

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Criteria	JORC Code explanation	Commentary
	high grades and/or widths should be
	practiced to avoid misleading reporting of
	Exploration Results.
Other substantive exploration data	• Other exploration data, if meaningful and material, should be reported including (but not limited to): geological observations; geophysical survey results; geochemical survey results; bulk samples – size and	•Limited exploration has been conducted on the site and work is ongoing to compile some of the data from geophysics and soil surveys.
	method of treatment; metallurgical test
	results; bulk density, groundwater,
	geotechnical and rock characteristics;
	potential deleterious or contaminating
	substances.
Further work	• The nature and scale of planned further work (eg tests for lateral extensions or	•Kaiser Reef is planning detailed mapping, sampling geophysics and drilling.
	depth extensions or large-scale step-out
	drilling).
	• Diagrams clearly highlighting the areas of
	possible extensions, including the main
	geological interpretations and future drilling
	areas, provided this information is not
	commercially sensitive.

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Appendix B Historic drill hole locations

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Hole ID	licence_holder	Easting	Northing	EOH (m)	Dip	Azi	Significant Intercept
PH-1	Kratos Exploration Pty Ltd	697355	6369595	92.5	55	49	NSI
PH-2	Kratos Exploration Pty Ltd	697710	6369050	136	50	49	NSI
PH-3	Kratos Exploration Pty Ltd	697690	6369190	79.5	50	49	NSI
PH-4	Kratos Exploration Pty Ltd	697715	6369150	47.5	50	49	NSI
PH-5	Kratos Exploration Pty Ltd	697540	6369520	60	60	49	NSI
PH-6	Kratos Exploration Pty Ltd	697780	6369335	200.3	50	202	17.3m @ 0.23 g/t Au from 36
WSD1	Waratah Gold Limited	698163	6369819	339.2	60	180	NSI
WSD2	Waratah Gold Limited	697896	6368911	351.3	60	205	1m @ 2.3g/t Au from 259
WSD3	Waratah Gold Limited	698904	6366860	351.6	65	75	NSI
RC96ST006	CRA Exploration Pty Limited	695123	6369294	105	60	235	NSI
RC96ST007	CRA Exploration Pty Limited	695123	6369334	99	60	235	NSI
RC96ST008	CRA Exploration Pty Limited	696333	6363924	99	60	258	6m @ 0.43g/t Au from 24m
RC96ST009	CRA Exploration Pty Limited	696443	6363944	117	60	258	3m @ 0.78g/t Au from 84m
RC96ST010	CRA Exploration Pty Limited	696333	6364094	99	60	258	NSI

Final

Page 43 of 43

28 January 2020

AI assistant

KAISER REEF LIMITED — Capital/Financing Update 2020

65173_rns_2020-02-25_73778d10-f266-40be-838d-4345088edc03.pdf

KAISER REEF LIMITED ACN 635 910 271 SUPPLEMENTARY PROSPECTUS

IMPORTANT INFORMATION

1. BACKGROUND

2. AMENDMENT TO THE PROSPECTUS

3. NEW APPLICATIONS

4. CONSENT OF INDEPENDENT GEOLOGIST

5. DIRECTORS’ AUTHORISATION

OFFICE LOCATIONS

Perth

 2020

Brisbane

Johannesburg

Website

Table of Contents

Figures

1 EXECUTIVE SUMMARY

1.1 Summary of Mineral Resources and Ore Reserves

1.2 Summary of Exploration Results

1.3 Summary of geology and mineralisation

1.4 Summary of exploration strategy

1.5 Conclusions and recommendations

1.5.1 Conclusions

1.5.2 Recommendations

2 INTRODUCTION

2.1 Competent Person, Effective Date and no material change

2.2 Mineral Assets

2.3 Mineral Resources and Ore Reserves

2.4 Sources of information and site visit

2.4.1 Reliance on other experts

Table 2.1 Responsibilities of the author

2.4.2 Reliance on information

2.4.3 Limitations

2.4.4 Declaration

2.4.5 Copyright

3 PROJECT DESCRIPTION

Figure 3.1 Stuart Town tenements

3.1 Location and access

3.2 Aboriginal heritage, Native Title and environment

3.2.1 Town Common

4 GEOLOGY AND MINERALISATION

4.1 Regional geology

Figure 4.1 Regional geology of the Stuart Town Project

4.2 Local geology

4.2.1 Structure

4.2.2 Geophysics

4.2.3 Mineralisation

Cadia

Ravenswood

Figure 4.5 Stuart Town/Ravenswood analogy

Alkane Resources Limited

Figure 4.6 Alkane prospects

5 HISTORICAL EXPLORATION

5.1.1 Stuart Town historic drilling

5.2 Exploration summary

5.2.1 Kratos Uranium NL (1980 to 1982)

Philosophy

Work undertaken

Results and conclusions

5.2.2 Kratos-Stellar Exploration Group (1983, first reporting period)

Philosophy

Work undertaken

Results and conclusions

5.2.3 Kratos-Stellar Exploration Group (1983, second reporting period)

Philosophy

Work undertaken

Results and conclusions

5.2.4 Kratos Uranium NL, Joint Venture with Freeport of Australia Limited (1984)

Philosophy

Work undertaken

Results and conclusions

5.2.5 Carpentaria Exploration Company Pty Ltd (1984 to 1986)

Philosophy

Work undertaken

Results and conclusions

5.2.6 CRA Exploration Pty Ltd (1992 and 1993)

Philosophy

Work undertaken

KAISER REEF LIMITED Capital/Financing Update 2020