Krakatoa Resources Sets Ball Rolling, Begins Field Due Diligence Activities at Belgravia Project

Australian exploration company, Krakatoa Resources Limited (ASX: KTA) has commenced its field based due diligence program at the Belgravia Project.

The company had recently entered a binding term sheet with Locksley Holdings Pty Ltd to acquire a 100 per cent interest in Exploration licence 8153, comprising the Belgravia Project. The binding term sheet had granted KTA a 21-day exclusive option period to undertake due diligence activities, following which KTA intends to acquire the project.

In an announcement made on Thursday, 3 October 2019, the company confirmed that it had commenced field due diligence at Exploration licence 8153. With this development, KTA is now one step closer to acquire the Belgravia Project. The technical due diligence at the project will include the field review of the six identified prospects, some with similarities to Cadia.

Six Identified Prospects-

• Bell Valley (Copper Hill NE) - Bell Valley represents stream sediment anomalies, located 4.5km northeast of the Copper Hill deposit, in the northernmost part of EL8153. The anomalous samples lie in streams that drain north from an area interpreted to overlie the CHIC, where the drainage has cut through the mantling basalt and exposed the underlying prospective bedrock.

• Guanna Hill - Guanna Hill is a 6km x 2km geochemical anomaly developed along the Mitchell Highway. Government mapping describes the area as Tertiary basalt overlying Ordovician Fairbridge Volcanics. The target lies immediately north the Molong Pb?Zn Prospect, interpreted as a distal Pb?Zn skarn. Bedded highly fossiliferous limestone of the Silurian Nandillyan Limestone hosts the Molong mineralisation.
• Sugarloaf Creek - Geopeko revealed highly anomalous stream sediment and rock chip geochemistry over an area of approximately 2km at Sugarloaf Creek. The base metal anomalism was returned from sulphides in “quartz stringers” within andesite.
• Shades Creek - Shades Creek straddles the Bell River around 12km north?northeast of Molong and overlaps the northern edge of EL8153. This region mostly contains sandstones, siltstones, shales and andesite.
• Strathmore - Strathmore represents a 10km length of elevated Cu (>100ppm Cu) in stream sediment samples along the Bell River. The target area lies over the Ammerdown Fault and andesitic volcanics of the Oakdale Formation.
• Nandillyan- Radiometric imagery at Nandillyan reveals widespread potassic alteration. Further, the area is supported by potentially skarn-related, intense haematite + epidote alteration that coincides with a ground magnetic anomaly.

KTA has commenced its field-based due diligence to review and validate these targets.

The market seems to have welcomed the news buoyantly, KTA’s stock closed the day’s trade at $ 0.028, up by 7.692% on a day when the benchmark index ASX200 was down 2.3%, and S&P/ASX 300 Metals and Mining (Industry) was down over 2%.

Belgravia Project Overview

The project is located centrally within the Molong Volcanic Belt, between Newcrest’s Cadia Operations to the south and Alkane’s recently announced, Boda discovery to the north, making it well positioned in a tier-one mining jurisdiction. The project is believed to be prospective for four deposit types:

1. Porphyry Cu-Au;
2. Associated skarn Cu-Au;
3. Orogenic Au; and,
4. VMS-Au mineralisation

The project covers an area of 80km² and is located in the central part of the Molong Volcanic Belt (MVB), which is part of the East Lachlan province within the Lachlan Fold Belt, NSW. The East Lachlan region constitutes the largest porphyry province in Australia.

Forward Plan

After completing the due diligence process, the Belgravia Project can be acquired through the following consideration:

• 10,000,000 ordinary shares
• $300,000 cash
• 1% net smelter royalty

After completing the transaction, KTA intends to enter into a consulting agreement with highly experienced exploration consultant Mr. Stephen Woodham, who is very well known for securing projects that have resulted in significant gold discoveries in NSW.

Who is Stephen Woodham?

• Stephen Woodham has over 30 years’ experience in mining and exploration across Western Australia and New South Wales;
• He has an extensive track record in logistics, tenement acquisition, land access, mining investment, and commercial and cross-cultural negotiation;
• He has owned and operated a drilling company which operated 8 drilling rigs and was a founding director of LFB Resources which was taken over by Alkane Resources.

In order to fund the due diligence on the project, the company has already secured firm commitments to raise $330k via the issue of 15 million ordinary shares. The shares will be issued at a price of 2.2 cps (cents per share).

If everything goes as per plan, the Belgravia Project will be the second significant project for the company after Mt Clere Rare Earth Project, acquired in recent times.

KTA’s other projects include Mt Clere Rare Earth Project, Mac Well Project, Corkill-Lawson and Farr Projects and Dalgaranga Project.

Stock Performance: KTA’s stock was trading at a price of $0.035, up by 2.941%, with a market capitalisation of circa 5.1 million (as at AEST 2:24 PM, 08 October 2019).

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