Krakatoa Resources : VTEM survey identifies multiple conductors at Mt Clere

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25th January 2022

Highly successful VTEM survey identifies multiple

conductors at Mt Clere

• Interpretation of 1,966-line kilometre Versatile Time-domain Electro- Magnetic (VTEM) survey results is complete
• Identification of 20 strong discrete late time high priority targets along regional structural trends highly prospective for Julimar type discoveries
• Processing of the high priority targets has delineated:

o localised focal clusters of discrete priority targets congregating within a central area, and

• 1. multiple discrete priority targets clustered along extensive structural lineaments
• Planning and approvals process underway for ground EM and future drilling over priority targets

Krakatoa Resources Limited (ASX: KTA) ("Krakatoa" or the "Company") is pleased to announce the results of its heliborne VTEMTM Max survey recently completed over parts of the Mt Clere project located at the north western margins of the Yilgarn Graton, WA. The survey data clearly outlines multiple extensive highly conductive targets which have the potential to host significant massive sulphide mineralisation (Figure 1).

Krakatoa's Geophysical Consultant, David McInnes commented:

"It is a privilege to be able to assist Krakatoa Resources with the interpretation of this data. The survey has discovered multiple isolated late-time conductors that form discrete shapes, situated next to large scale magnetic lineaments. The data records some of the best EM responses representing potential basement conductors I have seen in my 30 years of AEM data review."

Krakatoa's CEO, Mark Major commented:

"This is a major achievement for the Company. It took close to 10 months to get the VTEMTM Max system to the project and the wait has been well worth it. We now have world class late time conductive targets at key structural intersection, close to the craton margins. All the hallmarks for company defining discoveries. We look forward to proving up the priority targets with ground exploration activities followed by drilling as soon possible."

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Figure 1 Area of VTEM Max Survey showing the residual late time Tau image, priority EM targets with subsequent refined regional cluster groups, over RTP magnetics.

In November 2021 UTS Geophysics, on behalf of Krakatoa Resources, collected 1,966 line kilometres of versatile time domain electromagnetic (VTEM™ Max) and total magnetic field data over the Mt Clere Project. The VTEM system is sensitive to changes in the subsurface conductivity.

Airborne EM surveys have been shown to be successful in locating geophysical anomalies associated with sulphide mineralised zones. Chalice Mining Limited's recent Ni-Cu-PGE Julimar discovery was in the similarly aged Southwest Terrane of the Yilgarn Craton and was initially identified as a strong electromagnetic feature. The Narryer terrane, which forms the northwest margin of the Yilgarn Craton is an underexplored region which similarly consists of relatively high-grade granitic gneisses interlayered with metasedimentary rocks that are intruded by granites and pegmatites.

Geophysical consultant, Montana GIS (David McInnes) has completed a comprehensive interpretation of the Versatile Time-domainElectro-Magnetic (VTEM) surveys flown over the part of the Mt Clere tenement area.

The data revealed a total of 52 VTEM conductive targets which were ranked according to various characteristics and are shown in Figure 1.

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Of these fifty-two targets twenty high-prioritytargets were defined as late time, with strong amplitude (late time Taus), appropriate late time cross over in the X component, highly coherent "z" component single and twin peak anomalies, pertinent wavelengths, strike limited and close to know or interpretated lineaments.

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Sixteen medium-prioritytargets were defined as mid to late time anomalies generally without a magnetic anomaly association.

Eight targets of the fifty-two, are shown as plot section in Figures 2 to 5. These sections represent various targets within the cluster areas across the survey field. Each plot displays "X' and "Z" component observed data time decay profiles, total magnetic field and derivative profiles (Reduced To Pole) with resistivity depth transform images.

About the VTEM Survey

The data was collected using the following VTEMTM Max system specification:

• Transmitter - Transmitter loop diameter: 34.6 m
• Effective Transmitter loop area: 3761 m2
• Number of turns: 4
• Transmitter base frequency: 25 Hz
• Peak current: 172.4 A - Pulse width: 7.36 ms
• Wave form shape: trapezoid - Peak dipole moment: 648,394 nIA
• Average transmitter-receiver loop terrain clearance: 35 metres
• Receiver X Coil diameter: 0.32 m
• Number of turns: 245
• Effective coil area: 19.69 m2
• Y-Coildiameter: 0.32 m
• Number of turns: 245
• Effective coil area: 19.69 m2
• Z-Coildiameter: 1.2 m
• Number of turns: 100
• Effective coil area: 113.04 m2

Data was processed by UTS Geophysics Ltd. with inhouse proprietary software to produce levelled multi- component (X, Y & Z) magnetic field time decay and magnetic field intensity information. Further processing of the "Z" component data was undertaken to produce early, mid-time and late-time, time constants (Tau): These are indicative of the subsurface geology electrical conductance. Resistivity Depth Calculations of the "Z" component data were computed using the Meju (1998) apparent resistivity transform calibrated system based forward plate modelling.

Structural interpretation was undertaken using the magnetic field data, GSWA geological maps and field mapping data.

VTEM is an effective first-pass screening tool for detecting shallow conductive sources such as accumulations of sulphides. Flight spacing ranged from 200m on the northern K-13 target area and 400m for all the remaining areas. No in filling flights were conducted.

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Figure 2 Section plots through Calvin cluster - Line 1441 (top) and K-13 cluster - Line 2170 (bottom). Each Plot displays "X' and "Z" component observed data time decay profiles, Total magnetic field and derivative profiles (Reduced To Pole) with Resistivity Depth transform images. The equivalent profile length is displayed in plans over the residual Reduced to pole magnetic image and late time Tau image.

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Figure 3 Section plots through the Bullbadger cluster - Line 1540 (top) and Milly Milly cluster - Line 1520 (bottom). Each Plot displays "X' and "Z" component observed data time decay profiles, Total magnetic field and derivative profiles (Reduced To Pole) with Resistivity Depth transform images. The equivalent profile length is displayed in plans over the residual Reduced to pole magnetic image and late time Tau image.

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