Kaiser Reef : Nuggety Reef Drilling Commenced - Maldon Goldfield

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ASX RELEASE

8 December 2021

Nuggety Reef Drilling Commenced- Maldon Goldfield

• Diamond Drilling Commenced at the Nuggetty Reef Historic Gold Mine (past production of 301,000 Oz @ 187 g/t*)
• Exploration doubled with two diamond drilling rigs in operation
• Part of the Maldon Historic Goldfield (past production exceeding 1.74M Oz @ 28 g/t gold)
• The Nuggety Reef is situated on the contact of the classic Bendigo style sediments and the Harcourt Granite. This contact is considered to be extremely prospective
• Despite being one of the highest-grade mines in Australia the Harcourt contact has not been tested below the historic mining
• Testing this contact down plunge will be a priority for Kaiser
• Complements the Ongoing Underground Exploration Drilling at Maldon with first results recently announced and first results including 1.8m @ 29.6 g/t gold1
• Exploration initially targeting the Eaglehawk Reef at depth (past production from the Eaglehawk Reef is 491,400 Oz gold) ongoing with a separate diamond drilling rig

Kaiser Reef Limited (ASX:KAU) ("Kaiser", or the "Company") is pleased to announce the commencement of drilling at the Nuggety Reef historic gold mine, located at the northern end of the Maldon historic gold mine. Maldon is positioned between Bendigo and Ballarat and is one of Victoria's premier historic gold mining centres.

The Nuggety Reef mine was one of, if not the, highest grade significant Australian gold mines with recorded production of 301,000 ounces at 187 g/t recovered gold.

1 See ASX Release dated 15 November 2021

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History

The Nuggetty Reef was discovered in 1856 and produced 301,000 ounces of gold from 50,000 tonnes of ore averaging 187 g/t Au over a 10-year period. The reef was mined over a strike length of 350 metres with four shafts, sunk to a maximum depth of 238m.

The Nuggety Reef is contained within the broader Nuggetty shear zone and is the most northern reef and mine in the Maldon Goldfield (Figure 1). The deposit is truncated by the Harcourt Granodiorite to the north and at depth, forming a south plunging footwall. The Nuggetty Reef is situated within steep eastern dipping metasediments that have been contact metamorphosed to cordierite - andalusite hornfels. The mine workings strike north - south and comprise of 2 subvertical east dipping quartz reefs, referred to as the west reef and the east reef. These structures are joined at depth by near flat en-echelon reefs.

Surface Diamond Program (NSDH-001-004)

The surface diamond drilling is targeting both the eastern and western reefs which are located within the main north-south Nuggetty shear zone.

Historic diamond holes being followed up include NUGD01 (0.46m @ 205 g/t Au) and NUDG02 which returned 1.4m @ 9.78 g/t Au*. These structures are modelled slightly outside of the shear zone. Additional holes will target confirming and infilling other historic results. The Nuggety shear zone continues to the south and the prospective target contact with the Harcourt granite remains essentially untested down plunge.

Figure 1: Long section of the Maldon gold field - showing location of the Nuggety Reef to the North

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*See ASX release dated 19 July 2021.

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Image 1: Diamond drilling rig at Nuggety Reef

Further to the south, the underground drilling rig is continuing exploration from underground positions within the Union Hill decline. Early results have returned some excellent high-grade intervals. In the context of the "contained metal" that the first 5 of 11 drillholes returned an exceptionally high average "gram x metre" interval of 20.5 g/t gold.

Most of the holes intercepted the Eaglehawk reef at its targeted location. The first drilling results from Maldon are summarised below (see ASX release dated 15 November 2021):

• Exciting Preliminary include:

1. UH-UDH-001:0.3m at 54.5 g/t gold within 1.2m @ 14.1 g/t gold o UH-UDH-005: 0.65m @ 33.4 g/t gold
   o UH-UDH-006: 0.8m @ 63.6 g/t gold within 1.8m @ 29.6 g/t gold
   o UH-UDH-018: 0.8m @ 12.1 g/t gold and 0.3m @ 11.7 g/t gold
   o UH-UDH-021: 1.5m @ 6.5 g/t gold

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*See ASX release dated 19 July 2021.

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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 2 and 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.

The Maldon goldfield is located in the Bendigo Zone in host turbidite sandstone, siltstone and shales of the Castlemaine group and was subject to deformation resulting in north-south trending series of chevron folds. During folding a complex history of faulting is also noted. An event around ~445Ma believed to have involved crustal thickening and the circulation of metamorphic fluids through the crust (Vandenberg et al, 2000) and formed gold deposits at Bendigo, Fosterville, Castlemaine, Maldon and Daylesford. Maldon was later subject to further potential mineralising and remobilisation events with the emplacement of the Harcourt Batholith.

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 Maldon to be an underexplored and extremely prospective prolific high grade historic goldfield. Exploration at Maldon is a high priority objective for Kaiser. Drilling commenced early during the Quarter targeting prospective potential ore shoot extensions. Kaiser initially utilised a small company owned Kempe diamond drilling rig to commence early drilling at Maldon. Unfortunately, the production and effectiveness of the rig was substantially below expectations and some of the deeper targets were not tested. The full-scale underground drilling rig concluded drilling at the A1 Mine and has since commenced drilling from underground locations at Maldon. The contracted drilling rig has since proven to be very productive and capable. 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 gold2 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.

2 Not including alluvial/placer production.

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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.

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

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 2.30m @ 12.5 g/t gold o 0.83m @ 80.0 g/t gold o 1.0m @ 45.5 g/t gold o 3.55m @ 11.9 g/t gold o 2.95m @ 18.5 g/t gold o 0.85m @ 114.6 g/t gold

Management Transition

With Kaiser's progress towards increased production and exploration, Kaiser is transitioning its Executive Director role for Mr Jonathan Downes to Managing Director. Mr Downes is a geologist with considerable corporate, financial and mineral experience. Mr Downes founded Kaiser in 2019 and has been actively involved in building Kaiser into an exciting exploration and mining company. Mr Downes has focused heavily on progressing an expanding vision for Kaisers Victorian operations and was instrumental in the financing activities. To better reflect the current market, Mr Downes has subsequently been awarded with a salary increase from $200,000 pa to a $280,000 pa. Other terms of Mr Downes' employment with Kaiser remain the same.

This announcement has been authorised for release to the market by Chairman, Adrian Byass.

For further information:
Adrian Byass	Jane Morgan
Chairman	Investor & Media Relations
[e-mail]	[e-mail]
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