Kaiser Reef

JONATHAN DOWNES

MANAGING DIRECTOR

(ASX:KAU)

◾ Company Name: Kaiser Reef ◾ Company ASX code: KAU ◾ Key Commodities: Gold ◾ Key Personnel: Jonathan Downes, Managing Director | Adrian Byass, Non-Executive Chairman | Stewart Howe, Executive Director ◾ Locations: Victoria, Australia ◾ Market Cap as of 15/08/22: $23.37M ◾ FY22 Share price range – Low/High: $0.145 / $0.280 ◾ Company Website: kaiserreef.com.au

COMPANY PROFILE

There are two highly-compelling attributes that set Kaiser Reef apart from other gold miners. Not only is it the only Victorian gold miner listed on the ASX, but it’s also recognised as Australia’s highest grade gold miner, as well.

Additionally, while many junior miners are reliant entirely on capital raisings to maintain their exploration and development activity, Kaiser Reef benefits from solid gold production and revenue from its A1 Mine in Victoria.

The company recently recorded revenues of $7.3m against mine operating costs of $4.3m In the June quarter – results that were achieved despite a 20% reduction in productivity due to Covid-19 during the quarter, with downtime for an upgrade program at the Maldon processing plant’ taking it offline for ~15% of the quarter.

The upgrade was worth it, though, delivering mill stability, an expected reduction in operating costs from lower power consumption and greater efficiency and increased gold production, thanks to a 20% increase in throughput, all of which is expected to support a significant turn-around for the A1 Mine.

The company’s continued exploration work at the A1 Mine has also paid off, delivering the recent bonanza grade 2.4m hit grading 215g/t that resulted in the discovery of the Neesham Reef lode.

That find, together with the discovery of the Sovereign Lode that is now in production – and any other potential finds from drilling of near-mine targets to the south of the Queens Lode – deliver confidence in the mine’s ability to continue to ramp up gold production in the long-term.

Nor is the company a one-trick pony.

Kaiser Reef also owns the Maldon Goldfield within the central portion of the Bendigo-Ballarat zone of the Lachlan Fold Belt, which has historical production in excess of 1.7Moz of gold at an average grade of 28g/t.

It also hosts the Nuggety Reef mine which has the distinction of being Australia’s highest grade gold mine, producing 301,000oz of gold at average grade of 187g/t.

Despite this, Maldon has been subject to surprisingly little modern exploration until the company took the reins and promptly struck high grade gold with the first set of holes it drilled at the Eaglehawk Reef and the Alliance South deposit.

The results have been enough for the company to deliver an Inferred resource of 1.2Mt grading 4.4g/t gold for 186,656oz of contained gold along with potential for further growth in the form of an Exploration Target of 1.75Mt to 2.7Mt at between 3g/t and 4g/t gold, or between 165,000oz and 345,000oz of contained gold.

Maldon also has extensive existing infrastructure, existing mine permitting and proximity to the wholly-owned Maldon processing plant.

Adding further interest, the resource excludes Nuggety Reef where smallscale drilling returned a top hit of 2.2m at 10.3g/t gold, and a new untested target with significant up and down plunge extents found through bismuth trend modelling.

Recent integrated structural, geophysical research and geological modelling has also highlighted the opportunity for regional exploration to find parallel reef systems to the East and North of Maldon.

This potential is underlined by a historical hole which returned an assay of 2m at 23.9g/t gold from a depth of 218m and is believed to have potentially identified a new reef system.

KEY INVESTMENT HIGHLIGHTS

JULY 21, 2022: Ongoing diamond drilling at the A1 Mine discovered the new Neesham Reef high-grade discovery with an intersection of 2.4m grading a spectacular 215g/t gold. JULY 20, 2022: The company defined a maiden JORC resource of 186,656oz of gold for the Maldon development project which exceeds expectations despite excluding the Nuggety Reef section. JULY 5, 2022: Kaiser Reef intersects more high-grade gold from drilling at the A1 Mine which also provided critical mine planning information for future mining of previously identified reef systems.