Krakatoa Resources Limited provided an exploration update on the Company's 100% owned, Mt Clere Project ("Mt Clere" or "the Project"), located approximately 180km northwest of Meekatharra, Western Australia. Since 2021, the Company has successfully and systematically explored and developed Mt Clere, with a focus on rare earth elements (REE), basement sulphide complexes and heavy minerals sands. The extensive amount of work completed by Krakatoa has led to the discovery of the Tower deposit, definition of a maiden Mineral Resource estimate (MRE) of 101Mt @ 840ppm TREO1 and identification of basement sulphide targets.

Impressively, this has been achieved through exploration on only 20% of the Company's 2,400 square kilometre landholding, providing exceptional upside potential for further exploration and discovery growth at Mt Clere. The Company is set to recommence exploration at Mt Clere, focusing on infill and extensional drilling programs around the Tower deposit and regional exploration targeting advanced prospects. The primary objective of these activities is to make new hard rock and clay hosted rare earth discoveries.

Krakatoa has developed a range of exploration initiatives across Mt Clere for the upcoming 2023 field season, with the objective to expand the Tower deposit through infill and extensional drilling programs and carry out regional exploration programs to replicate the Tower discovery success. Exploration is set to commence in April, through the commencement of regional reconnaissance, mapping, and geochemical field programs. Key workstreams at Tower include: Further aircore (AC) drilling to expand the current clay hosted REE Mineral Resource estimate; Diamond drilling program for further geochemical and geotechnical work, along with providing samples for the ongoing metallurgical test work; Environmental baseline and Aboriginal heritage surveys at main Tower area, which will likely feed into a Scoping Study on the Tower deposit. Regional programs across Mt Clere include: Outcrop geological mapping and geochemical (rock and soil) sampling to generate new targets across under-explored region (80% of landholding yet to be explored); Targeted exploration fieldwork at specific areas of interest which include Wheelo Creek & Number 6 bore, and a zone of elevated metal values in stream samples identified northeast of One Gum bore; Petrological work will be completed in order to continue advancing its geological knowledge of the area; Geophysical and reconnaissance drill programs will be defined on further successful targeting and completion of fieldwork programs. On reviewing the historical BHP stream geochemistry data in 2020, Krakatoa identified the presence of monazite at Mt Clere.

Monazite is a well-known REE-bearing mineral, which typically contains 30% of the highly valued magnetic REE. Since identification, the Company undertook a further regional stream survey in 2021 across targeted catchments over only 1,500 square kilometre of project area. The results showed anomalous concentrations of REE throughout, with one of these catchments (Tower) drill tested in late 2021 and through further successful exploration work, a discovery was made April 2022 and a major clay hosted REE JORC Resource defined in November 2022.

Importantly, the Tower deposit MRE, is one of the larger Resources in Australia. The Company undertook several geochemical, geophysical and imagery studies to help with identifying target areas within unexplored regions of Mt Clere. Several highly anomalous REE areas have been identified as well as processing of radiometric and magnetic data (Figure 1).

The Company can now reveal several circular, high-thorium, magnetic features are present; which may be intrusive alkaline rock units such as carbonatites, lamprophyres, or kimberlites; all which showed similar genesis. It is important to note that the Project area was previously explored for diamonds (BHP and Astro Mining) and multiple lamprophyre intrusions were identified across the Project by Astro Mining. The discovery of lamprophyres having deep crustal origin in a highly complex area at the edge of an Archaean craton, indicated that the area has considerable potential for a broader suite of alkaline ultramafic rocks including carbonatites.

Carbonatites typically occur as small plugs within zoned alkalic intrusive complexes, or as dikes, sills, breccias, and veins. They are almost exclusively associated with continental rift-related tectonic settings; the same setting present along the Yilgarn craton margin (where Mt Clere is located). They are typically associated with silica undersaturated alkaline igneous rocks.

Many carbonatites are enriched in REEs, in fact majority of the world's REE resources are found in mineral deposits associated with carbonatites. Several of the stream sampled catchments show elevated levels of TREO up to a maximum of 1.03% along with high levels of Thorium and magnetic features (where data resolution is suitable) which tend to be circular, possibly representing pipelike intrusive bodies. These areas will be ground-truthed in the upcoming field season.

Other areas may be flown with higher resolution airborne magnetic and radiometric surveys during 2023 to define new and further exploration targets.