Kaiser to acquire the Henty Gold Mine, becoming a multi-asset Australian gold producer

Kaiser Reef Limited ("Kaiser" or "the Company") is pleased to announce that it has entered into a definitive agreement (the “Agreement”) with Catalyst Metals Limited (ASX:CYL) (“Catalyst”) to acquire the Henty Gold Mine and associated Tasmanian exploration tenements (“Henty Gold Mine” or “Henty”).

KEY HIGHLIGHTS

• Proven production asset with a cumulative production history of 1.4Moz at 8.9g/t Au¹ and a track record of replacing mined ounces. Gold produced in the December Quarter totalled 6,594oz, produced at an AISC of A$2,631/oz²
• JORC compliant Mineral Resource of 4.1Mt @ 3.4g/t Au for 449kozs of contained gold and Ore Reserve of 1.2Mt @ 4.0g/t Au for 154kozs
• Highly attractive acquisition metric of less than A$1,200 per production ounce4 based on total upfront consideration of A$31.6 million, comprising A$15.0 million cash and 118.6 million shares issued to Catalyst, equivalent to a 19.99% shareholding
• Acquisition immediately transforms Kaiser into a +30kozpa5, multi-asset gold producer with a clear pathway to grow to a 50kozpa production target
• Kaiser and Catalyst agree an option to form a strategic partnership in the Victorian Goldfields around the Maldon gold processing plant, including an option to expand the processing plant, supporting both Kaiser’s and Catalyst’s Victorian ambitions
• Binding commitments received for a A$30 million two-tranche Placement, comprising A$9.1 million under the Company’s existing placement capacity pursuant to ASX Listing Rule 7.1 and 7.1A and A$20.9 million subject to shareholder approval at a general meeting to be held in early May 2025
• A further A$10 million of funding secured with Auramet International Inc, consisting of a A$8 million senior secured gold loan and a A$2 million unsecured gold prepayment facility ensuring a strong working capital position

TRANSACTION SUMMARY

Kaiser Reef Ltd (ASX:KAU) (“Kaiser” or the “Company”) is pleased to announce that it has entered into a definitive agreement (the “Agreement”) with Catalyst Metals Limited (ASX:CYL) (“Catalyst”) pursuant to which Kaiser will acquire the Henty Gold Mine and associated Tasmanian exploration tenements (“Henty Gold Mine” or “Henty”) for:

• A$15.0 million upfront consideration;
• A$16.6 million in shares issued to Catalyst (Catalyst to emerge as a 19.99% shareholder);
• deferred payments of 50 ounces per month to Catalyst, capped at 3,000 ounces and commencing 6 months from Completion (“Deferred Consideration”);
• 0.5% NSR royalty on gold produced from the Darwin Target Zone area;
• Kaiser to reimburse Catalyst A$3.9 million in Environmental Bond Payments to Mineral Resources Tasmania in 12 monthly instalments; and
• an option agreement through which Catalyst may enter into a joint venture with Kaiser in relation to the Maldon processing plant.

together the (“Transaction”).

STRATEGIC RATIONALE

• Established production platform: The Henty Gold Mine is an established gold production platform, with historical production of 1.4Moz @ 8.9g/t. Since acquiring Henty in 2021, Catalyst has made significant operational improvements and investments at Henty, including drill platforms, drilling, tailings, underground fleet and people.
• 5-year mine plan: Work to date has culminated in establishing a robust 5-year mine plan underpinned by a current Ore Reserves of 1.2Mt @ 4.0g/t for 154koz. There is significant scope to extent mine life based on the current Mineral Resource of 4.1Mt @ 3.4g/t Au for 449koz along with the considerable opportunities for near-mine exploration and development success.
• Significant infrastructure: There is significant infrastructure in place at the Henty Gold Mine including a 300ktpa CIL processing plant, surface & underground workshops, administration complex, access to hydro generated grid power and refreshed tailings storage capacity.
• Implement and build on operational capacity: Key Kaiser executives have significant experience in the optimisation of similar assets to Henty achieved through a combination of operational improvement and targeted exploration investment. The support from Catalyst as a 19.99% strategic shareholder, along with the addition of the Henty site operating team, a stable & skilled local workforce of +150 employees, will further strengthen the Kaiser team.
• Flagship asset: With the Henty Gold Mine as its flagship asset, the Kaiser team will provide dedicated focus to continue the significant work completed by Catalyst and further drive operational improvements at Henty.
• Significant increase to Kaiser’s gold production: the acquisition of the Henty Gold Mine will immediately transform Kaiser into a multi-asset gold producer with +30koz of annual production. The acquisition of the Henty Gold Mine will allow Kaiser to generate immediate cashflow providing the Company with enhanced financial flexibility for further reinvestment, exploration, debt reduction or return to shareholders. The current record gold price environment provides Kaiser with an excellent opportunity to generate strong margins from an operation that has historically held a stable cost base.
• Re-rating potential: The total upfront consideration of A$31.6 million reflects an acquisition metric of less than A$1,200 per production ounce4. Given the current trading range of small ASX gold producers on an EV/Production basis, the Transaction represents excellent value and a potential re-rating opportunity for Kaiser shareholders.

Kaiser’s Managing Director, Jonathan Downes said:

“We are excited to significantly expand Kaiser’s production base, exploration opportunities and enter into a strategic partnership with Catalyst in Victoria. We look forward to welcoming the Henty team into Kaiser and growing the business together.

“Catalyst has done a great job building a profitable operation at Henty over the last 4 years, with clear production and mine life visibility, plus some great exploration targets. Kaiser will continue to re-invest into Henty and build on what Catalyst has already achieved. We are very pleased to have Catalyst’s continued involvement and exposure to the upside at Henty, both as Kaiser’s major shareholder and through their board representation.

“The option for Kaiser and Catalyst to enter into a 50/50 JV partnership at the Maldon processing plant gives both parties a clear pathway that supports their Victorian ambitions. A Joint Venture can unlock the benefits that would come with plant expansion and increased operational scale, and we look forward to working with Catalyst as JV partners if they execute the option.

“I’m also pleased that Brad Valiukas will be taking a full-time role with Kaiser as Director – Operations. Brad has a wealth of experience in underground mining and helping to grow companies such as Mincor Resources, to their peak period operating 8 mines, and Northern Star, bedding in assets from Newmont, Barrick and Sumitomo. Brad has been instrumental in the changes we have made over the last few months at A1, accelerating the capital development to get below historic workings and setting A1 up to deliver going forward.

“The addition of Henty to our portfolio, alongside A1 in Victoria, positions Kaiser as a >30,000oz old producer and targeting 50,000 ounces of gold production per annum in the short term. Each of the gold projects provides expansion and exploration opportunities and collectively positions Kaiser for a market re-rating in line with our peers. The value metrics of Kaiser are compelling with three gold mines (one on care and maintenance) and two gold processing plants – all held with an enterprise value of A$67 million.”

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