Kaiser Reef : KAU Yields Profit & Achieves 35% increase in Gold Production

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ASX RELEASE

18 January 2022

KAISER YIELDS PROFIT AND ACHIEVES 36% INCREASE IN

GOLD PRODUCTION

Kaiser attains 36% increase in gold production for December Quarter over the previous Quarter and operationally profitable production with the ramp up ongoing.

o	Revenues:	$5.1 M
o Mine Operating Cash Costs:	$3.9 M
o	Gold Head Grade (recovered):	9.87 g/t gold

1. Operating Cash Costs per Ounce: AUD$2,006/Oz

o Gold Price Received:

AUD$2,474/Oz

Kaiser Reef Limited (ASX: KAU) ("Kaiser", or the "Company") is pleased to announce a further significant milestone since acquiring Centennial Gold Ltd assets in 2021. Investment in operational capital and dedication by the workforce has delivered further operational improvements in the December Quarter that have yielded profitable gold production at the A1 Gold Mine (Figure 1). During 2021, operational improvements began delivering profitable monthly operational results and Kaiser is pleased that the investment made in 2021 is delivering these significant outcomes. Further improvements in operating efficiency, gold production and output are targets in 2022.

Figure 1: Monthly Gold Sales

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This positive result underpins Kaiser's vision to become a multi-mine high grade gold producer and supports the exploration focus. The production ramp up which began with the commencement of decline extension in mid-2021 is ongoing and during the December quarter, development to allow access and mining of the Queens Lode, as well as exploration drilling at Maldon has progressed well. When accessed and in full production, the Queens Lode is expected to deliver further substantial increase in production and revenues. Full details will be delivered in the December 2021 Quarterly report.

The A1 Mine commenced operation in 1861 and is a significant high-grade asset that remains open at depth to further mineralisation. The mining team, working under Tom de Vries, have worked hard to deliver this solid result and remain focussed on future expanded production (Figure 2).

Figure 2: Loader transporting high grade ore at the A1 Mine

Kaiser's 'next-level' exploration target remains the Union Hill and Nuggety Reef gold projects within the Maldon goldfield, where exploration continues with two operating drilling rigs.

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The Maldon Goldfield

Maldon is located between Bendigo and Ballarat in the Victorian Goldfields and the licence area has produced over 1.74M ounces of gold at 28 g/t (Figure 3). Maldon is host to one of Australia's highest grade historic gold mines, the Nuggety Reef, that produced 301,000 ounces of gold at 187 g/t gold.

One of the Maldon's key attributes is the extensive existing infrastructure and proximity to Kaiser's gold processing plant (3 km away). Rapid and low-cost development could be implemented with the existing mining fleet owned by Kaiser and experienced mining team for minimal capital cost.

Kaiser considers the productive high grade historic Maldon goldfield to be underexplored and extremely prospective. Exploration at Maldon is a high priority objective for Kaiser. Drilling commenced early during December 2021 Quarter, targeting prospective potential ore shoot extensions. The large underground drilling rig concluded exploration drilling at the A1 Mine and has since commenced drilling from underground locations at Maldon. Drilling has initially targeted the projected extensions to historic high-grade mineralisation at the Eaglehawk reef, one of Maldon's largest high grade and largest historic mines.

The Kaiser owned Maldon goldfield produced 1.74 million ounces of gold at an average grade of 28 g/t gold1 on a granted mining lease close to the 100% owned, permitted and operating plant which is currently treating ore from the wholly owned high-grade A1 gold mine.

Maldon has some distinct exploration and development advantages including an established and serviced decline which allows excellent underground access for drilling high-grade shoots and is currently facilitating the underground drilling and future potential mining.

1 Not including alluvial/placer production.

Some of the historic high-grade gold results returned from Maldon that require follow up include:

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1. 0.90m @ 103.0 g/t gold o 2.73m @ 42.2 g/t gold o 2.75m @ 22.6 g/t gold o 0.44m @ 205.0 g/t gold o 2.00m @ 58.0 g/t gold o 0.83m @ 80.0 g/t gold

1. 3.55m @ 11.9 g/t gold o 2.95m @ 18.5 g/t gold o 0.85m @ 114.6 g/t gold o 1.80m @ 29.6 g/t gold o 2.30m @ 12.5 g/t gold o 1.0m @ 45.5 g/t gold

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Figure 3: Long section of the Maldon gold field - showing location of the Nuggety Reef to the North

This announcement has been authorised for release to the market by Executive Director, Jonathan Downes.

For further information:
Jonathan Downes	Jane Morgan
Managing Director	Investor & Media Relations
[e-mail]	[e-mail]
	[phone]

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Competent Persons Disclosure

The information included in this report that relates to Exploration Results is based on information compiled by Shawn Panton (B.Sc (hons) (Geology/Earth Science), M.B.A Ex.,an employee of Centennial Mining Limited. Mr Panton has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Panton consents to the inclusion in the report of the matters based on this information in the form and context in which it appears.

Mr Panton does not hold securities in the company.

Future Performance

This announcement may contain certain forward-looking statements and opinion. Forward-looking statements, including projections, forecasts and estimates, are provided as a general guide only and should not be relied on as an indication or guarantee of future performance and involve known and unknown risks, uncertainties, assumptions, contingencies and other important factors, many of which are outside the control of the Company and which are subject to change without notice and could cause the actual results, performance or achievements of the Company to be materially different from the future results, performance or achievements expressed or implied by such statements. Past performance is not necessarily a guide to future performance and no representation or warranty is made as to the likelihood of achievement or reasonableness of any forward-looking statements or other forecast. Nothing contained in this announcement nor any information made available to you is, or and shall be relied upon as, a promise, representation, warranty or guarantee as to the past, present or the future performance of Kaiser Reef.