Krakatoa Resources : Auger Soil Survey Completed at Rand & NSW Projects Update

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20th January 2022

Infill and Extensional Soils Completed at Rand &

NSW Projects Update

• KTA awarded ~$100k for diamond drilling from NSW State Government Drilling Co-operative funding initiative

RAND PROJECT

• Significant infill and extensional geochemical soil survey completed over Bulgandry Goldfield amounting to over 1,630 soil samples completed in the last 12 months
• Clay hosted REE-bearingair-core samples from Magnetic Bullseye Anomalies submitted for metallurgical testing
• Additional land under application to test for ionic REE's

BELGRAVIA PROJECT

• Dipole-dipoleIP survey defines new, significant buried, porphyry-style chargeable anomaly at Bella-Larras Lee Target

Krakatoa Resources Limited (ASX: KTA) ("Krakatoa" or the "Company") is pleased to update the market on its recently completed exploration programs on its priority NSW Projects (Figure 1).

Krakatoa's CEO, Mark Major commented:

"It was a big end to 2021 for the Company with a strong exploration push in both NSW and WA well into December.I'm proud of our NSW crew who toiled through floods, fires and hailstorms to complete the infill soil program at Rand. Likewise, kudos goes to our in-house team and consultants who managed to persevere with the Molong COVID outbreak and floods to complete the IP surveys and drilling on EL8153.

It was a challenging year with COVID, weather and access to consultants and exploration resources however we were able to complete the exploration programs on budget and with only minor delays.

We are looking forward to the results of the Rand soil survey which will assist us with refining drill targets for 2022; and the IP survey at Bella-Larras Lee which has revealed a potentially significant anomaly at depth which the Company will pursue aggressively in 2022."

Capital Structure

294,709,917 Fully Paid Shares

21,200,000 Options @ 7.5c exp 29/11/23

15,000,000 Performance Rights at 20c, 30c and 40c.

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RAND PROJECT (EL9000, EL9276, EL9277 & ELA6406)

Bulgandry Goldfield Phase 2 Auger Soil Geochemical Survey

In December 2021, KTA completed a significant infill and extensional auger soil geochemical survey ("Phase 2") over the Bulgandry Goldfield. The Phase 2 survey followed-up the earlier ("Phase 1") work completed in February 2021 (refer to ASX release dated 8 June 2021) resulting in 1,630 samples taken within the last 12 months.

Phase 2 comprised 833 samples taken across an area of over 35 km2 spanning 7.8 kms E-W by 4.5 kms N-S. It was designed to better resolve the numerous gold and multi-element anomalies defined by the Phase 1

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survey (Figure 2). North-south oriented infill lines were spaced at 100 metres with 50 metre sample centres. Extension lines were either at a 100 or 200 metre spacing, with 50 metre samples centres. Raw (unsieved), bulk 300-500 gram samples were taken nominally within the B horizon from in situ soils. The sample batch has been freighted to Labwest in Perth where they will undergo ultrafine analysis ("UFF-PE") for Au and a full multi-element suite. Assay results are expected in February-March 2022.

Other Work

Clay hosted REE Metallurgical Testing

In December 2021, selected air-core percussion chip samples from 4 of the 2021 Bullseye Magnetic Targets drilling holes were freighted to ALS Global's Hydrometallurgical Centre of Excellence in Perth to undergo initial metallurgical testing. These samples are undergoing a series of leach testing using ammonium sulphate and weak acids to determine the levels and which REE's within the clay hosted basket display ionic characteristics under these conditions. (Refer to ASX announcement 8 December 2021 for further information).

Expert Geological Project Review

An independent expert geologist from CTEX Consulting was engaged to review the project in late 2022. A detailed data review and analysis was completed following a site visit in December 2021. The review addressed the IRG (gold), tin-tungsten and REE potential of the project. KTA is evaluating the report's findings and recommendations and is incorporating these in the 2022 field surveys.

ELA6464

Given the NSW REE discovery, the Company successfully lodged an application for 2,008 km2 land package surrounding the current Rand Els (Figure 3). The new ground will be explored for clay hosted ionic REE mineralisation within the regolith profile developed over numerous intrusives, like that known over the mineralised area of Rand. The application is expected to be granted by mid-2022.

BELGRAVIA PROJECT (EL8153)

Sugarloaf Diamond Drilling Assays

Assay results were received for the diamond drillholes drilled at Sugarloaf from late September to early November 2021. Two core holes (SDD001 and SDD002) totalling 1039.3 metres tested a coincident annular soil geochemical anomaly and magnetic feature (ASX release 18 November 2021 Figure 4 and Table 1). The holes intersected predominantly massive volcaniclastic sandstones, conglomerates and fine breccias and basalts with minor jaspers and laminated and pyritic siltstones and mudstones.

A total of 236 core samples were submitted to ALS Global for Au and multi-element analysis. Assay results were subdued with no significant intersections returned. Maximum individual grades were 0.022 g/t Au (over 1.0m in SDD002 from 102 metres) and 720 ppm Cu over 1 metre (from 48 metres in SDD001).

The Company is still waiting for the report from 23 petrography samples and completion of the interpretation of hyperspectral and whole rock analysis results. On completion of the outstanding work full interpretation of the system and further targeting will be undertaken.

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Figure 3 Krakatoa Resources central southern NSW exploration licenses and applications Rand project District. Showing mapped granites (geological survey of NSW).

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