June 2024 Quarterly Report

KEY POINTS

Quarter highlights

• Plutonic and Henty quarterly production 24,576oz and 6,926oz respectively – both representing the most successful production quarters under Catalyst ownership
• Cashflows from operations allowed Catalyst to end the quarter with $37m in cash and bullion, $45m liquidity and only $8m debt in the form of a 2,220oz gold loan repayable in six, monthly instalments
• Studies confirmed Trident and Plutonic East as near-term, low-cost development priorities
• Reported maiden Ore Reserve Estimate for Trident, increasing group Reserves to 793koz

Production

• Gold produced for the quarter totalled 31,502oz at an average AISC of A$2,352, comprising:
  • Plutonic: 24,576oz gold produced at an AISC of A$2,291/oz
  • Henty: 6,926oz gold produced at an AISC of A$2,524/oz

Discovery and Growth

• High grade assays from shallow drilling was incorporated into Trident's maiden Ore Reserve Estimate (ORE) of 188koz at 4.5g/t
• ORE provided the foundation for updated, lower cost, lower risk development Trident – key metrics at A$3,400/oz:
  • $15m pre-production capital drawdown
  • Initial 5.5 year life of mine; average underground production of 37koz pa
  • AISC of A$1,592/oz
  • Average annual free cashflow of A$53m; NPV₇ A$198m
• Dewatering at Plutonic East underway with plans to commence rehabilitation and grade control in Q1 FY25

Financial and Corporate

• As of 30 June 2024, the Company held cash of $31m, bullion of $6m and undrawn facilities of $8m
• All inherited call options delivered into, leaving Catalyst unhedged – previous realised prices last quarter of $3,130/oz versus spot of A$3,490/oz (at end of quarter)
• Continued debt repayments totalling $11m, leaving only a 2,220oz gold loan

PERTH, Australia, July 24, 2024 /PRNewswire/ -

OVERVIEW

Operating models at Plutonic and Henty are now well established.  Both sites are consistently performing at elevated, and now entrenched, operating metrics.  Importantly the turnaround in in site safety has been maintained.  Under Catalyst's ownership TRIFR rates at Plutonic have nearly halved – safety remains a core focus for both sites.

Plutonic produced at a ~100koz per annum run rate for the quarter, the highest quarterly production under Catalyst's ownership.  This was despite a transformer needing replacement which impacted production for 3 days. 

Learnings from the turnaround of operations at Plutonic are now being implemented at Henty.  Production at Henty for the quarter was the highest under Catalyst's ownership and reflects the investment in equipment, improved planning and deployment of new people to the Henty site.  During the quarter, Henty continued construction of the tailings storage facility lift which is reflected in costs for the quarter.

Catalyst's project development team has continued to prioritise the development and exploration opportunities across the belt.   The team has commenced re-estimating Resources and commenced engineering designs. Updates will be provided as this work progresses.

In Victoria, the Company continues to progress plans for the submission of an Environmental Impact Statement for the proposed exploration access tunnel at Four Eagles.

During the quarter Catalyst repaid the final $3m tranche of a convertible note acquired through the acquisition of Vango Mining Limited.

MANAGEMENT COMMENTARY

"This has been another successful quarter for the Company, with well-established operating models at both Plutonic and Henty delivering consistent gold production at the highest levels seen under Catalyst's ownership.

"Our near-term development plans are progressing at pace, with additional deposits expected to come online to provide additional ore feed for the under-utilised Plutonic mill in 2025.  We are extremely pleased with the faster-than-expected dewatering at Plutonic East, with existing permits and  infrastructure allowing for a rapid and low-cost restart. Similarly, the shallow high-grade results from drilling at Trident have allowed a revised open plan development approach for the deposit, which will have a more manageable upfront capital profile than previously expected.

"It is particularly pleasing to note that the consistent increased level of gold production from the existing deposits has allowed the team time to refine the development approach for Trident, providing this new low-cost option and the flexibility to fund the development from strong operational cashflows.

"The Company finishes the quarter in a solid position, with a consolidated balance sheet, stable operations and a long pipeline of near-term, low-cost organic growth projects."  

SAFETY

Since taking control of Plutonic on 1 July 2023, Catalyst has overseen a significant improvement in safety.  This is evidenced in the 12month moving average TRIFR dropping from a peak of 24.7 in September to 10.8 at the end of June.  Delivering a robust safety culture and ensuring our people go home safely remains our commitment.

A minor, restricted work injury was recorded in late June.  This was the only reportable incident for the quarter.

No injuries were recorded for the quarter at Henty.

Table 1: June 2024 group safety performance (12-month moving average)

OPERATIONS

Plutonic Gold Operations

The focus for the June quarter remained reinforcing our safety culture and ensuring consistent production performance.

Key production indicators of the mine; development metres, production drill metres, material movement and gold production were consistent with previous quarters and reflect the new operating performance.  Gold produced was 24,576oz vs prior quarter of 21,252oz at an AISC of $2,291/oz vs prior quarter of $2,346/oz.

This was a strong result despite an electrical failure of a transformer impacting the primary underground fan and restricting access to areas of the mine for approximately a week.

There was a continued focus on mine planning . Plutonic's mine planning has improved considerably in the past 12 months and has been fundamental to supporting production to date.  Building adequate drill stocks to support mine planning was also a focus during the quarter and a fourth drill rig was utilised to achieve this.  At the end of the quarter there were +100kt of drill stocks on hand, creating increased flexibility and contingency into the mine plan.

Plutonic is progressively de-bottlenecking its underground operations.  Remote loader capacity is seen as the next bottleneck, and in the coming months Plutonic will replace hire equipment with rebuilt Sandvik tele-remote loader units.  A new Sandvik loader will be purchased to provide greater reliability and flexibility.   This fleet renewal program commenced in the quarter and will continue until late in Q1 FY25.

As production metrics continue to normalise at the new levels, the focus is gradually shifting to reviewing costs.  Major contacts are being retendered and renegotiated as they become due, with pleasing initial results from these negotiations.

Henty Gold Mine

During the quarter, Henty's mill operated at its nameplate production run rate of 300,000 tonnes per annum for the first times since 2008.  This throughput was supported by improved mine operating metrics including material movement, development metres and ore movement.  

Gold recovered was 6,926 oz vs prior quarter of 6,832oz.  This was the highest quarterly production under Catalyst's ownership.  Increased production translated to lower AISC for the quarter of $2,524/oz vs prior quarter of $2,712/oz. 

Table 2: Henty operating metrics

Studies are underway in relation to the expansion of the processing plant and are expected to be completed in the coming quarter.

Construction of the tailings storage facility lift was completed during the quarter and will provide capacity for the coming 10 months. Work has commenced on the design, approvals and permitting of the next lift.

EXPLORATION AND DEVELOPMENT

Important for Plutonic's longer term success is identifying new material in virgin areas near existing underground mine infrastructure.  Exploration drives have been established at the Western Front and drilling commenced during the quarter.  This potential new virgin area in the Plutonic underground is expected to be drilled out over the coming two quarters.

During the quarter Catalyst released a maiden Ore Reserve Estimate for the Trident open pit and underground deposit.  This ORE supported a revised development plan for Trident, being a small open pit (or large box cut), followed by a portal and decline directly above the Trident underground orebody.  The new approach to Trident's development results in the portal being within 30m of the orebody.  It makes for a more manageable project for Catalyst and reduces up front capital expenditure, lowering funding requirements.  The revised portal location also better positions the mine for future grade control drilling, ventilation, haulage and in-mine resource development and exploration.

Table 2: Trident development – key metrics¹

The dewatering of the Plutonic East underground mine commenced in May.  Rehabilitation will commence in the coming weeks once the water level has dropped to a satisfactory level.  This will be followed shortly after by mine services being restored.  Catalyst is targeting first ore from Plutonic East in Q3 FY25.

Beyond Plutonic East and Trident, the major opportunity at Plutonic remains its excess mill capacity. The processing plant has a nameplate capacity of 1.8Mtpa but is currently operating at 1.3Mtpa.  Numerous deposits lie across the belt capable of being processed by the central processing facility.  Any new ore source can be delivered to the Plutonic mill due to the network of existing haul roads extending the full 48km length of the Plutonic Belt. 

Evaluation of the numerous advanced and early-stage opportunities across the consolidated Plutonic Gold Belt progressed during the quarter with re-estimations and optimisations in progress for the highest priority resource positions.  Such work has informed the design of the next round of resource development which is now under way.  Updates will be provided as this work progresses. 

Victorian Gold Exploration

Exploration in Victoria during the quarter included the completion of logging and sampling of Tandarra drill core.  Exploration for Catalyst in Victoria remains limited while discussions with the government over the Exploration Access Tunnel remain ongoing.

A diamond drilling program is anticipated to commence in the coming quarter at the Four Eagles Gold Project.  Planning for this drill program and project development studies was undertaken during the June quarter. 

Four Eagles Gold Project and Licencing of the Exploration Access Tunnel

The Four Eagles Gold Project comprises a gold Resource of 163,000oz at 7.7g/t gold, including  the Iris Zone of 70,000 at 26g/t gold. It also includes numerous gold 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.

Collaboration with Victorian Government's Department of Energy, Environment, and Climate Change commenced in late 2022 and remains ongoing.

FINANCE

Cash and Equivalents

At the end of the June 2024 quarter, the Company had available liquidity of A$45 million, comprising cash ($31m), bullion on hand ($6m) and undrawn debt facilities ($8m). 

During the quarter Catalyst repaid the final tranche of a $3.0 million of a convertible note inherited through the Vango Mining acquisition.  The remaining debt held by Catalyst is a 2,220oz gold loan which was put in place by Catalyst's predecessors – Superior Gold Inc.  This gold loan is to repaid in six remaining monthly instalments of 370oz.  This represents less than 2% of annual production.

Catalyst also repaid the last of its call options inherited through the acquisition of Superior Gold Inc.  The Company has delivered into 25,000oz of inherited call options over the past financial year at prices that averaged A$2,910/oz.  Settlement of these call options provides Catalyst with increasing exposure to the prevailing spot gold price going forward.

During the quarter, the Company generated $38m of cash from operations. A total of $5 million was invested in growth exploration activities across the Company's portfolio. $8m of capital was deployed with $11m of net financing outflows primarily from the repayment of the working capital facility that remained undrawn at 30 June 2024.  

Hedging

At the end of the June quarter, the Company had fully delivered into contracted hedges.   Catalyst begins FY25 with greater exposure to the prevailing spot price.

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

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: June 2024 quarter performance summary – by production centre

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SOURCE Catalyst Metals LTD.