ASX Code

KTA, KTAOC

Capital Structure

218,750,000 Fully Paid Shares 85,000,000 Options @ 5c exp 31/07/21 5,000,000 Options @ 7.5c exp 31/07/21 12,000,000 Options @ 10c exp 24/10/20

28 April 2020

March 2020 Quarterly Activities Report

Highlights

Completed placement of $1.3m to professional and sophisticated investors

Drone aeromagnetic survey identifies several magnetic porphyry patterns at the Bell Valley Target

Results from shallow aircore drilling program over the northern Bell Valley Target area received after the quarter end:

o Anomalous “deep lead” gold (192ppb and 187ppb Au) intersected next to the Bella Target

o Two pathfinder-enriched zones (featuring Cu-Au-Pb-Bi-As-Mo) delineated – one substantial halo located at the Bella Target; the other adjacent to the Lara 1 and 2 Targets

o Gold and copper enrichment increases to the south and at depth

Significant Au-Cu result at Sugarloaf Target Area coincident with a geophysical pattern raises the potential for hosting porphyry-style mineralisation

High-resolution aeromagnetic survey expanded across the entire Belgravia Project

Tenement granted underlying the Turon Project

Active exploration program planned for the June 2020 Quarter Krakatoa Resources Limited (ASX: KTA) (“Krakatoa” or the “Company”) is pleased to provide the following summary of activities conducted in the March 2020 quarter, which firmly focused on systematic exploration at the Company’s 100% owned Belgravia Project in the Molong Volcanic Belt, Lachlan Fold Belt, NSW. KTA Chairman, Mr Colin Locke, said: “We are pleased with the aggressive progress that has delivered highly encouraging results to investors at Belgravia.” “The aircore drilling program averaged 18m depth per hole yet still revealed anomalous gold and copper results that matched those previously defined at nearby targets; boosting confidence in the exploration approach we are taking at Belgravia. The work done to date at Belgravia has covered less than half of the first target, Bell Valley, which is located at the northern extremity of the property. Let’s not forget there remain five more substantial targets in the pipeline at Belgravia. We are just scratching the surface on this significantly underexplored project which lies in one of the most prospective porphyry belts in the world” said Mr Locke.

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Belgravia Project Overview The Belgravia Project covers an area of 80km2 and is located in the central part of the Molong Volcanic Belt (MVB), Lachlan Fold Belt, NSW. It contains the same rocks (Fairbridge Volcanics and Oakdale Formation) or their laterals equivalents that respectively host the giant Cadia-Ridgeway mine 35km south and Alkane Resources Boda discovery 65km north (Figure 1). Historical exploration has failed to adequately consider the regolith and tertiary basalt (up to 40m thick) that obscures much of the prospective geology. The Project contains six targets that are considered prospective for porphyry Cu-Au and associated skarn mineralisation (Figure 2).

Figure 1: Regional Geology Map of Molong Volcanic Belt

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Figure 2: Belgravia Exploration Target Areas

Drone aeromagnetic survey – Bell Valley Target Area The March 2020 quarter commenced with the Company receiving the results from the drone aeromagnetic survey on the Bell Valley Target Area completed in late 2019. Results identified several magnetic and structural features with geological similarity to the adjacent Copper Hill and Cadia Valley copper-gold deposits. Key findings of the survey outlined in the ASX announcement dated 24 January 2020 were:

several doughnut-shaped magnetic patterns (Lara 1, Lara 2, Power, Bella) thought to reflect the intrusion of porphyritic rocks.

situated along strike from the copper-gold geochemical trend discovered through reprocessing of historical MIM RAB drilling and within 400m of a shallow RC drill hole historically completed by Newcrest that intersected 30m @ 0.2g/t Au including 1m @ 1.15g/t Au & 0.28% Cu;

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feature a significant demagnetised zone (Lee) that results from (potentially mineralised) fluids exiting a magmatic source and migrating to higher crustal levels where they overprint (destroy) the existing magnetite;

coincide or lie adjacent to a northwest-trending structure interpreted to control emplacement of nearby mineralised granitic complexes (Copper Hill and Larras Lake Intrusive Complexes);

Figure 3: UAV magnetic survey with interpreted features including structure, prospects

(Lara 1 and 2, Power, Lee and Bella) and rock chip samples.

Field Program – Bell Valley Target Area In tandem with the drone aeromagnetic survey, the Company implemented a campaign of field mapping and sampling across the Bell Valley target. The comprehensive mapping program established the presence of dioritic and monzodioritic host rocks which also host the nearby Copper Hills and Cadia deposits. The alteration in the host rocks includes widespread distal chlorite-epidote and locally more proximal hematite and silica. The presence of these minerals and the rock type itself is typically associated with copper-gold deposits. The results from the drone aeromagnetic survey and field mapping and sampling were used in combination to plan an aircore drill program on the northern parts of the Bell Valley Target.

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Aircore program – Bell Valley Target Area A drilling program, comprising of 128 inclined holes for a total of 2,358 metres at an average depth of 18m, was completed by the Company over the Bell Valley Target during the quarter. Drilling was to blade refusal, spaced at 100m along lines with 200m spacing between lines. The drilling objective was to:

test beneath Tertiary basalt; and,

locate patterns of zoned alteration and mineralisation halos related to porphyry-style gold and copper systems, like that found at Cadia.

Gold and multi-element assay results from the aircore drilling program were received after quarter-end (ASX announcement dated 22 April 2020) and interpreted to have further heightened the prospectivity of the Bell Valley area, warranting immediate additional work.

Key findings from the program were:

Two gold highs, 0.192 ppm Au (Hole BVAC096) and 0.187 ppm Au (Hole BVAC118) occur in lenses of quartz-rich gravels located beneath tertiary basalt. A source for the ‘deep-lead’ gold must lie south of the existing drill grid and is potentially obscured by a thick sheet of Tertiary basalt.

The mineralisation and distal alteration is consistent with that observed in the nearby Mount Isa Mine’s Larras Lake 1995 drilling. Returned gold results matched expectations for this type of drilling program which is typical for this region (where ≥0.1g/t Au is considered anomalous in a bedrock context).

Reporting levels in gold, copper and several pathfinder (As-Pb-Mo-Bi) elements form a coincident SSE-trend across the drill grid. They are most elevated adjacent to the recently identified monzodiorite bodies and along the western margin of the Bella Target.

Outlined two zones of enrichment in elements typically present in evaluating porphyry prospectivity, including gold, copper, bismuth, lead, zinc, arsenic and molybdenum. These zones were located near the monzodiorite intrusions (Lara 1 and 2 Targets in the north) and at the Bella Target in the south (refer to Figures 1 and 2).

Multi-element geochemistry supports the southern parts of the Bell Valley area as being more prospective with gold and copper abundance increasing to the south and at depth

Revealed prospective stratigraphy beneath Ordovician sediments and much younger regolith outlining two distinct zones of monzodiorite intrusion.

Delineated the presence of (high potassium) shoshonitic intrusive and volcanic rocks known to be closely related to certain types of gold and base metal deposits, including epithermal Au and porphyry Cu-Au deposits.

Successfully intersected areas of hydrothermal alteration with a propylitic assemblage featuring epidote, chlorite, Fe-carbonate, calcite, and hematite-dusting.

The Company is arranging additional work programs to support priority deeper drilling of targets, including several lines of deep ground penetrating radar (DGPR), and a more rigorous investigation of the multi-element data. Additionally the Company will expand detailed mapping and sampling to the southern areas of the Bell Valley Target and consider further radiometric age dating of diorite intrusions.

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Figure 4: Max gold in hole on a baselayer comprising a simple additive index (featuring arsenic,

bismuth, lead, molybdenum and titanium) draped over Laplacian filter applied to RTP TMI

greyscale image.

Mapped Monzodiorite Intrusion F

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Figure 5: Max copper in hole on a baselayer comprising a simple additive index (featuring

arsenic, bismuth, lead, molybdenum and titanium) draped over Laplacian filter applied to RTP

TMI greyscale image.

Mapped Monzodiorite Intrusion F

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Field Program – Sugarloaf Target Area Reconsideration of the regional aeromagnetic data early in the March 2020 quarter identified a sizeable geophysical feature considered characteristic of porphyry-style copper-gold mineralisation, including magnetite alteration within the core and around the margins of the system, which are separated by magnetic low associated with late-stage phyllic, magnetite destructive alteration. As detailed in the ASX announcement dated 14 April 2020, the Company implemented a field mapping and sampling program of thirty-seven chip or float samples across the western margin of the Sugarloaf Target. One sample (IC200323-10), composed mainly of quartz, epidote, malachite, chalcocite and chalcopyrite veining, reported 5.19g/t gold, 1.73% copper, 10.65 ppm silver, 0.12% lead, 0.23% zinc, 19ppm molybdenum, and 14ppm antimony. The float sample, along with a nearby previously reported historical sample that assayed 0.53g/t gold and 1,250ppm copper, considerably raises the potential of Sugarloaf for hosting porphyry-style mineralisation.

Figure 6: Sample IC200323-10 - assaying 5.19g/t Au and 1.73% Cu, and comprising quartz–

epidote–malachite–chalcocite–chalcopyrite veining. Aeromagnetic program - Belgravia Project Successful outcomes from the high-resolution drone survey at Bell Valley saw the Company swiftly complete a high-resolution aeromagnetic survey across the remainder of the Belgravia Project. The expanded survey covers five additional priority targets: Sugarloaf Creek, Guanna Hill, Shades Creek, Nandillyan and Strathmore. The Company is currently processing and interpreting the results of the survey, which was completed in March 2020.

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Turon Project The Turon Project covers an area of 120km2. It is situated approximately 50km east of the Company’s Belgravia Project and 60km northeast of Newcrest Mining’s Cadia Valley Operations, in the Hill End Synclinorial Zone, NSW. The Company was granted EL8942, comprising the Turon Project, in February 2020 following direct licence application in November 2019. The Turon Project is prospective for:

High-grade “Slate Belt” orogenic gold similar to the Hill End Field which has produced ~2Moz Au and where the world’s largest gold specimen, the Holtermann Nugget, was found; and,

Shear-hosted gold mineralisation.

As detailed in the ASX announcement dated 25 November 2019, the Project contains at least two separate north-trending reef systems, the Quartz Ridge and Turondale Groups. Each comprises numerous workings and quartz reefs that strike over 1.4km and 2.4km respectively. Rock grab sampling across these Groups returned several tantalising results, including:

1,530.00 g/t Au - Dead Horse Reef

150.00 g/t Au - Dead Horse Reef

60.60 g/t Au – Britannia Mine

Limited historical drilling has inadequately tested the Quartz Ridge Group. Anomalous gold mineralisation was intersected and remains open in all directions, including:

2m @ 6.53g/t Au from 30m (incl 1m @ 10.40g/t Au)

1m @ 1.23g/t Au from 24m

3m @ 0.576g/t Au from 35m The Company is well advanced in its review of the historical work completed and has commenced liaison with landholders for proposed fieldwork in June 2020 quarter. Mt Clere Rare Earth Project The Mt Clere Rare Earth Project comprises three tenement applications covering a total area of 1,079km2, located approximately 200km northwest of Meekatharra, within the Gascoyne Region of Western Australia.

The Project potentially contains multiple mineralisation-styles, including:

Rare earth elements (REE) and thorium in enriched monazite sands;

REE ion adsorption on clays within the widely preserved deeply weathered lateritic profiles; and

REE occurring in plausible carbonatites associated with alkaline magmatism.

Previous exploration programs were completed by BHP, Astro Mining NL, and All Star Resources Plc, all of which delineated numerous prospective areas for thorium and REE mineralisation (refer to ASX announcement dated 19 June 2019). No work was conducted on the Mt Clere Project during the March 2020 quarter.

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Mac Well Project The Mac Well Project has a land area of 66.9km2 and is located 10km west of the Company’s Dalgaranga Project. The Project contains a 7.5km strike along the prospective Warda Warra greenstone belt, mostly untested due to a thick transported cover. The Company considers favourable structural conditions for gold mineralisation are likely within the Mac Well tenement, acknowledging the significance and prospectivity of the western granite-greenstone contact, as evidenced by the Western Queen Mine. A short field program, completed during the March 2020 quarter, confirmed the widespread occurrences of ultramafic and gabbroic rocks in areas previously mapped as granite or alluvium/colluvium. The Company observes the project’s increasing prospectivity for nickel-chrome-platinum-palladium mineralisation as a result. Dalgaranga Project The Dalgaranga Project is located 80km northwest of Mount Magnet in Western Australia and lies within the Dalgaranga Greenstone Belt. The Dalgaranga Greenstone Belt is about 50km long and up to 20km wide and contains gold mineralisation (Dalgaranga gold mine), a zinc deposit (Lasoda), graphite deposits, and occurrences of tantalum, beryllium, tin, tungsten, lithium and molybdenum related to pegmatites. No work was conducted on the Dalgaranga Project during the March 2020 quarter. Corkill-Lawson Project The Corkill-Lawson Project located in the Gowganda area of north-eastern Ontario was relinquished during the March 2020 quarter. Corporate On 5 February 2020, the Company raised $1,312,500 via a placement of 43,750,000 ordinary shares at $0.03 per share. Authorised for release by the Board. Yours faithfully,

Colin Locke Executive Chairman Competent person’s statement: The information in this announcement is based on information compiled by Mr Jonathan King, consultant geologist, who is a Member of the Australian Institute of Geoscientists and employed by Collective Prosperity Pty Ltd, and is an accurate representation of the available date and studies for the claim blocks. Mr King has sufficient experience relevant to the style of mineralisation and type of deposit under consideration, and to the activity which he has undertaken, to qualify as a Competent Person as defined in the 2012 Edition of the Joint Ore Reserves Committee (JORC) Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr King consents to the inclusion in this announcement of the matters based on this information in the form and context in which it appears.

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Appendix 1 - Details of Tenements Held at 31 March 2020

Project Tenement Licence Interest held at at 31 December 2019

Interest acquired/ disposed

Interest held at 31 March 2020

Belgravia EL8153 - 100% 100% Turon EL8942 - - 100% Mt Clere E52/3730 - - -+ Mt Clere E52/3731 - - -+ Mt Clere E09/2357 - - -+ Mac Well E59/2175 100% - 100% Dalgaranga P59/2082 100% - 100% Dalgaranga P59/2140 100% - 100% Dalgaranga P59/2141 100% - 100% Dalgaranga P59/2142 100% - 100% Corkill- Lawson 113077 100% (100%) - Corkill- Lawson 127453 100% (100%) - Corkill- Lawson 139501 100% (100%) - Corkill- Lawson 155382 100% (100%) - Corkill- Lawson 155383 100% (100%) - Corkill- Lawson 170039 100% (100%) - Corkill- Lawson 170568 100% (100%) - Corkill- Lawson 191476 100% (100%) - Corkill- Lawson 200011 100% (100%) - Corkill- Lawson 200012 100% (100%) - Corkill- Lawson 203607 100% (100%) - Corkill- Lawson 203626 100% (100%) - Corkill- Lawson 210246 100% (100%) - Corkill- Lawson 228787 100% (100%) - Corkill- Lawson 228800 100% (100%) - Corkill- Lawson 228801 100% (100%) - Corkill- Lawson 237094 100% (100%) - Corkill- Lawson 237095 100% (100%) - Corkill- Lawson 247658 100% (100%) - Corkill- Lawson 267268 100% (100%) - Corkill- Lawson 267287 100% (100%) - Corkill- Lawson 267288 100% (100%) - Corkill- Lawson 286779 100% (100%) - Corkill- Lawson 294811 100% (100%) - Corkill- Lawson 307478 100% (100%) - Corkill- Lawson 307479 100% (100%) - Corkill- Lawson 307480 100% (100%) - Corkill- Lawson 307504 100% (100%) - Corkill- Lawson 307505 100% (100%) - Corkill- Lawson 314208 100% (100%) - Corkill- Lawson 314209 100% (100%) - Corkill- Lawson 314210 100% (100%) - Corkill- Lawson 314212 100% (100%) - Corkill- Lawson 323368 100% (100%) - Corkill- Lawson 335103 100% (100%) - Corkill- Lawson 552682 100% (100%) - Corkill- Lawson 552683 100% (100%) - Corkill- Lawson 552684 100% (100%) - Corkill- Lawson 552685 100% (100%) - Corkill- Lawson 552686 100% (100%) -

+ Tenement applications subject to grant

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