December 2023 Quarterly Report

KEY POINTS

Quarter highlights

• Operating performance at the Plutonic gold mine improved against September quarter reflecting the expected operational stabilisation
• Plutonic updated Mineral Resource and Ore Reserve released¹; estimate provides comfort over Catalyst's forward mine plan
  • ORE: 5.2Mt at 2.9g/t Au for 490,000oz
  • MRE: 17.9Mt at 2.9g/t Au for 1,654,000oz
• Updated Mineral Resource Estimate released for the Trident deposit of 4.2Mt at 3.7g/t Au for 508,000oz; estimate will form the basis of the Definitive Feasibility Study (DFS)

Production

• Gold sold for the quarter totalled 26,336oz at an average AISC of A$2,861, comprising:
  • Plutonic: 21,030oz gold sold at an AISC of A$2,713/oz
  • Henty: 5,306oz gold sold at an AISC of A$3,447/oz
• Sustaining capital including tailings lifts at both sites and ongoing investments in equipment impacted AISC for both Henty and Plutonic

Discovery and Growth

• Diamond drilling program completed at Trident, focussed on obtaining geotechnical and hydrogeological data to support a definitive feasibility study (DFS)
• Release of the DFS will be dependent on collating and finalising these and other engineering results post the Christmas break
• Plutonic belt development pipeline studies advancing:
  • Regional soil sampling program completed across the Plutonic Gold Belt; results will inform future exploration programs
  • Collating and processing of historical data relating to nearer term development opportunities

Financial and Corporate

• As at 31 December 2023, available funds were A$15.4 million
• The Company held loan facilities of $30.5 million and equipment related loans of $12.6 million at the same date

PERTH, Feb. 5, 2024 -

OVERVIEW

The December quarter reflects the continuation of the new operating model and the operating discipline that has been introduced by the Company.

The December quarter represented the second quarter of ownership of the Plutonic gold mine under Catalyst. The September quarter was a period of change for Plutonic with new management focussed on identifying and implementing operational improvements. During the December quarter, management focussed on stabilising production. Operational metrics at Plutonic improved in the December quarter and are a positive reflection of these efforts. With operations now more stable, management will be able to have a greater focus on costs. Newly purchased equipment and one-off costs incurred in the September and December quarters should assist with a lower cost profile going forward.

Performance at the Henty Gold Mine in Tasmania improved compared to the September quarter results. A focus by management on stope performance resulted in improved grade and increased gold production during the quarter. Sustaining capital at Henty for the quarter included commencement on the tailings dam lift and continuation of the equipment replacement program.

Studies to progress the Plutonic development pipeline continued during the quarter. The Trident DFS is expected to be completed in the coming months, and significant work is underway to prioritise the pipeline of potential developments and exploration opportunities across the belt.

In Victoria, the Company continues to progress plans for the submission of an Environmental Impact Statement for the proposed Four Eagles Exploration Tunnel.

MANAGEMENT COMMENTARY

"The December quarter represents the second full quarter of ownership by Catalyst. Like the September quarter, we continue to see the productivity initiatives implemented by the new management translating into better operating results.

Pleasingly, this was best reflected in Plutonic's safety record with no incidents recorded during the quarter - the first time this has been achieved since June 2022.

"The Trident DFS is continuing and remains a focus despite the change in total ounces and gold grade of the updated Resource. The date of release of the DFS is still to be determined.

"Encouragingly, during November and December, Henty saw a turnaround in performance. Improvements in mill availability, gold grade and equipment utilisation were seen.

"Following the recruitment and coordination of a new project development team, in conjunction with Catalyst's pre-existing exploration team, the company is developing a plan to methodically explore and assess the full potential of the Plutonic Gold Belt.

"The March, June and September quarters represented a period of significant change for Catalyst, with transactions, new hires and working through numerous inherited legacy items. The December quarter marked more of a digestion of these efforts. Safety is improving, the newly formed team are working well together, understanding of the Plutonic operations improves monthly, multiple legal disputes of Vango Mining and Superior Gold were settled, creditors reduced, a TSF lift was completed, and equipment purchased to replace both old and hired fleet.

At this stage, while challenges remain in the shorter term, we plan for production and safety metrics to continue improving across both sites over time."

ENVIRONMENT, SOCIAL AND SAFETY (ESS)

The new Safety Leadership Team at Plutonic has been focussed on building a strong safety culture at site. While this takes time, very pleasingly, no reportable safety incidents were recorded at Plutonic during the quarter.

During the quarter, the Carnarvon Magistrates court handed down its sentence to Billabong Gold Pty Ltd (a 100% Catalyst subsidiary holding the Plutonic Gold Mine) in relation to a 2020 workplace incident. This event occurred prior to Catalyst's ownership of the mine.

Henty recorded one lost time injury for the quarter relating to an uncontrolled detonation. A formal investigation into the incident was conducted in liaison with Worksafe Tasmania and Orica. No party could determine the cause of the incident.

Table 1: December 2023 group safety performance (12-month moving average)

OPERATIONS

Plutonic Gold Operations

The December quarter was focused on improving the site's safety performance, cementing previous quarter's production metrics and gaining a better understanding of mine planning.

There were no reportable safety incidents recorded in the quarter. Development and production drill metres, ore tonnes mined and processed continued in line with the previous quarter. Considerable work was undertaken in mine planning with considerably more to do. Suffering from historical underinvestment, recruitment of a new planning team is underway. At Plutonic this is compounded by the style of mineralisation and the now remnant nature of the mine. This demands additional engineering and planning than typically required for a mine of this size. This does create ongoing uncertainty to operations.

Further incremental improvements are planned over time as new underground equipment arrives on site. At the end of the quarter, Catalyst had invested in the purchase of two new loaders and three trucks to replace either ageing equipment or hire units. This equipment should deliver improved availabilities for the fleet in the near term.

Important for Plutonic's longer term success is identifying new Resources in virgin areas near existing underground mine infrastructure. Delineating such Resources reduces pressure and risk on operations. Through an ability to mine virgin areas, mine planning and operations will become easier. During the quarter, several new areas were identified with development drives and drill programs planned for 2024 in an effort to reduce operating risk.

Construction of a TSF lift was completed during the quarter. Despite a challenging start to its permitting and construction, the lift was completed on time and on budget at a cost of $4.1m. A further lift, already permitted, is scheduled to commence in July 2024.

Henty Gold Mine

Operational metrics at Henty improved against the September quarter. In November and December, processing tonnes increased along with improved production drilling, material movement and compliance to plan. This improvement in processing tonnes was an important milestone with the processing plant demonstrating for the first time under Catalyst ownership that it could process 300,000 tonnes per annum.

A plan is being prepared to increase Henty's mining and processing rate to 300,000 tonnes per annum on an on-going basis. With the mine's predominantly fixed cost base, increased production should lower unit costs. We believe this is possible due to a steady and stable team and our investment in the mining fleet.

The equipment replacement plan has been implemented with combined rebuild and replacement of the ageing mining equipment. During the quarter Henty took delivery of a new truck, replacement orders for a production rig and bogger were placed and a development jumbo rebuild commenced.

Henty's cost marginally increased with higher physicals and resumption of underground diamond drilling under a new service provider.

Catalyst's considerable investment in drilling during FY2023 is starting to yield results. The new Resources at Cradle Zone and areas near Darwin are in close proximity to existing workings while also not suffering from remnant mining. The team have been able to incorporate these areas into a new plan. As the mine expands into these new areas in 2024 and 2025, operating risk will reduce to less reliance on remnant mining.

Construction of a TSF lift was commenced during the quarter. To date, these works remain on time and on budget.

EXPLORATION AND DEVELOPMENT

Plutonic Gold Belt Exploration

Catalyst continues to progress its definitive feasibility study (DFS) at Trident. The DFS includes independent work by specialist technical consultants on geotechnology, metallurgy, mineralogy, hydrology, environmental, mining engineering and Mineral Resource estimation.

A diamond drilling program at Trident was completed during the quarter which was focused on obtaining additional geotechnical and hydrogeological data to support the DFS.

Evaluation of the numerous advanced and early-stage opportunities across the consolidated Plutonic Gold Belt progressed during the quarter. Significant work is underway to develop a structured pipeline of deposits that will inform future studies and exploration projects. New ore sources can be delivered to the Plutonic mill due to the network of existing haul roads extending the full 48km length of the Catalyst mining leases.

During the quarter Catalyst completed a soil sampling program across the belt. The results of this program will inform priority exploration targets within the projects pipeline. Future exploration programmes will range from surface geochemistry and geophysics to discover hidden mineralisation at depth, through to drill outs of known deposits around existing mothballed pits, which number almost 30.

Victorian Gold Exploration

No significant field activity was undertaken in the December quarter. This period is often hampered by flooding and seasonal cropping by landholders.

Four Eagles Gold Project and Licencing of the Exploration Access Tunnel

The Four Eagles Gold Project comprises numerous prospects, four of which are Boyd's Dam, Hayanmi, Pickles and the Iris Zone (Figure 1 and Figure 2). Management's main focus at the Four Eagles Joint Venture is to seek approval to construct an access tunnel to explore underground. Gaining approval to explore underground will allow Catalyst to better understand and further explore mineralised positions in detail.

To gain approval for an exploration tunnel at the Four Eagles Project, collaboration with Victorian Government's regulation body, Earth Resources Regulation (ERR) has continued during the quarter. Studies will continue as contributions to the ultimate Environmental Impact Statement as required by the Victorian Government. Whilst the timeline regarding approval of the tunnel remains uncertain, Catalyst do not believe an EIS will negatively impact the currently anticipated timeline.

Henty Exploration

During the quarter, a number of drillholes were designed on both adjoining exploration leases. Site preparations have been completed at one, with the other yet to be approved. Exploration in the Henty region is greatly reliant on diamond drilling due to the dense vegetation and oftentimes challenging topography which render geophysics and soil geochemistry extremely difficult.

FINANCE

Cash and Equivalents

At the end of the December 2023 quarter, the Company held available funds of $15.4 million.

During the quarter, the Company expended $69 million on mining production and development activities across its operating sites at Plutonic and Henty. A total of $3 million was invested in growth exploration activities across the Company's tenement portfolio during the quarter predominantly in relation to Trident's DFS. $6.0m of borrowings was repaid as well as $8.2m in new equipment financing was drawn as part of Catalyst's programme to replace both old and hired equipment.

Hedging

At the end of the December quarter, the Company held the following calls and forward sale contracts.

Table 2: Calls and forward sales

This report has been approved for release by the Board of Directors of Catalyst Metals Ltd..

JORC 2012 Mineral Resources and Reserves

Catalyst confirms that it is not aware of any new information or data that materially affects the information included in the original market announcements and that all material assumptions and technical parameters underpinning the estimates in the relevant market announcements continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Persons findings are presented have not been materially modified from the original market announcements.

Figures & Diagrams

Table 3: December 2023 quarter performance summary - by production centre

Catalyst Metals

Catalyst Metals controls three highly prospective gold belts. It has a multi asset strategy.

It owns the 40km long Plutonic Gold Belt in Western Australia hosting the Plutonic gold mine and neighbouring underexplored, high-grade resources.

It also owns and operates the high-grade Henty Gold Mine in Tasmania which lies within the 25km Henty gold belt. Production to date is 1.4Moz @ 8.9 g/t.

Catalyst also controls +75km of strike length immediately north of the +22Moz Bendigo goldfield and home to high-grade, greenfield resources at Four Eagles.

Capital Structure

Shares o/s: 220m
Options: 1.4m
Rights: 1.8m
Cash: $22.8m
Debt: $31.4m

Board Members

David Jones AM
Non-Executive Chairman

James Champion de Crespigny
Managing Director & CEO

Robin Scrimgeour
Non-Executive Director

Bruce Kay
Non-Executive Director

Corporate Details

ASX: CYL
E:investors@catalystmetals.com.au
W:catalystmetals.com.au

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SOURCE Catalyst Metals Ltd.