Kairos Minerals : 15/03/2022 – Half Year Accounts

ABN 84 006 189 331

HALF-YEAR FINANCIAL

REPORT

31 DECEMBER 2021

Table of Contents

Directors' Report ............................................................................................................	3
Auditor's Independence Declaration ...............................................................................	19
Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income .	20
Condensed Consolidated Statement of Financial Position................................................	21
Condensed Consolidated Statement of Changes in Equity................................................	22
Condensed Consolidated Statement of Cash Flows..........................................................	23
Notes to the Condensed Financial Statements.................................................................	24
Directors' Declaration .....................................................................................................	31
Independent Auditor's Review Report.............................................................................	32
Corporate Directory ........................................................................................................	34

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Directors' Report

The Directors of Kairos Minerals Limited ("KAI" or "the Company") provide the following Report in relation to the Company for the half year ended 31 December 2021.

Directors

The following persons were Directors of the Company during the half-year and up to the date of this report:

Mr Terence Topping

Mr Neil Hutchison

Mr Bruno Seneque

Results

For the six months ended 31 December 2021, the Company incurred a consolidated comprehensive loss after income tax of $1,254,871 (31 December 2020: $3,269,936).

Review of Operations

During the six months to 31 December 2020, Kairos Minerals (ASX: KAI - "Kairos" or "the Company") advanced exploration activities targeting gold and lithium across its extensive 100%-owned Pilbara tenement package and its 100%-owned Roe Hills Project, located ~120km east of Kalgoorlie in Western Australia.

The key objectives of the Company's exploration programs were to:

• Expand and upgrade the existing 873,500oz JORC Mineral Resource at the Mt York Gold Project, with drilling targeting extensions of known deposits and to upgrade Inferred Resources to higher-confidenceIndicated Resources to underpin ongoing mining studies. The next Mineral Resource update is scheduled for Q2 2022;
• Progress ongoing exploration activities across numerous greenfields exploration targets prospective for Hemi-stylegold discoveries across the Pilbara;
• Accelerate lithium exploration activities within the Company's Pilbara portfolio and the Roe Hills Project in light of the buoyant investment environment for lithium exploration. This work resulted in the identification of several high-priority lithium-pegmatitetargets that will be drill tested in 2022.

Key Highlights:

• A 95-hole Reverse Circulation (RC) drilling program for 14,988m was completed at the Mount York Gold Project, part of the Pilbara Gold-Lithium Project in WA.
• The drilling was designed to expand and further upgrade the current Pilbara Gold Project JORC 2012 Global Mineral Resource inventory, including the Mt York, Iron Stirrup and Old Faithful gold deposits:
• • Indicated and Inferred Resource of 20.9Mt @ 1.30g/t Au for 873,500oz
• While assays for 23 holes from this program (~24% of the total) were still outstanding at the date of this report due to the widely-publicised delays in assay turnaround at commercial laboratories, this work is expected to pave the way for an updated JORC Mineral Resource in Q2 2022.
• Two high-priority lithium pegmatite targets were identified from preliminary Ultrafine+ soil geochemistry results and follow-up field mapping, less than 3km from the world-class Wodgina Lithium Mine.

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Directors' Report

• High-prioritylithium pegmatite targets were identified at the Kangan Project following mapping of extensive pegmatites and successful air-core drilling.
• Further mapping, sampling and ground-truthing is being conducted in conjunction with heritage clearances across these lithium targets in preparation for drilling in Q2 2022.
• Further strong progress was achieved with the Company's exploration targeting intrusion-hosted gold mineralisation in the Pilbara region, with numerous new targets identified within Karios' extensive portfolio of regional gold projects.
• Regional exploration of the Company's expanded tenure resulted in the identification of further prospective areas for follow-up gold and lithium exploration.
• Key protocols were implemented to allow continued exploration in the Pilbara after taking into consideration the restrictions and health and safety requirements of the current COVID-19 environment.
• The Company continued to maintain a strong focus on minimising corporate overheads and maximising exploration expenditure into the ground, with total exploration and tenement expenditure for the half-year of $4.69 million compared with total administrative costs of $308,520.
• Kairos maintained a strong balance sheet during the reporting period, with cash and equivalents at 31 December 2021 of $5.073 million. This compared with $8.299 million as at 30 June 2021.
• The Company received a total of $5.063 million after 31 December 2021 following the exercise of listed share options at $0.025 per option. This ensured the Company is in a strong position to maintain exploration momentum in 2022.

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Directors' Report

PILBARA GOLD PROJECT, PILBARA REGION (KAI: 100%)

In the Pilbara, Kairos' flagship asset is the advanced Mt York deposit, located ~100km south-east of Port Hedland. Together with the nearby Iron Stirrup and Old Faithful deposits, this forms the cornerstone of the Company's Pilbara Gold Project.

Since acquiring the project in early 2016, Kairos has rapidly established a substantial JORC compliant Mineral Resource inventory totalling 20.9Mt at 1.30g/t Au for 873.500 ounces (comprising Indicated Resources of 8.5Mt at 1.33g/t for 366,000oz and Inferred Resources of 12.3Mt at 1.28g/t for 507,500oz), initially by re-evaluating the known resources from the historical Lynas Find gold mine (which produced 125,000oz between 1994 and 1998) and subsequently through highly successful drilling programs. Kairos also holds 1,547 square kilometres of tenure which is highly prospective for gold and copper discoveries.

Table 1: Global Resources for the Pilbara Gold Project, reported at a 0.5g/t Au cut-off grade and to a maximum

vertical depth of 195m.

Indicated

Inferred

Total

Tonnes (kt)

Au (g/t)

Ounces

Tonnes

Au

Ounces

Tonnes

Au

Ounces

(koz)

(kt)

(g/t)

(koz)

(kt)

(g/t)

(koz)

8,565

1.33

366

12,364

1.28

507

20,929

1.30

873

Figure 1. Pilbara Gold Project and the Mt York Deposit locations

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