Keras Res Regulatory News (KRS)

Keras Resources plc / Index: AIM / Epic: KRS / Sector: Mining

17 July 2019

Keras Resources plc ('Keras' or the 'Company')

Publication of Warrawoona Gold Project Pre-Feasibility Study &

Award of 265 Million Shares in ASX-listed Calidus Resources Ltd

Keras Resources plc, the AIM listed mineral resource company, is pleased to announce that Calidus Resources Limited (ASX:CAI) ('Calidus') has published a Pre-Feasibility Study ('PFS') demonstrating the commercial viability of the Warrawoona Gold Project ('Warrawoona' or the 'Project'). Subsequently, Calidus has issued the outstanding 265,000,000 Performance Shares in Calidus to Keras.

Keras now holds 723,750,000 fully paid ordinary shares, representing approximately 39.1% of the issued share capital of Calidus. As previously announced on 2 July 2019, Keras intends to distribute its Calidus shareholding pro-rata to Keras shareholders, with the distribution expected by the end of 2019.

Calidus also published a Maiden JORC compliant Probable Ore Reserve of 8.9Mt @ 1.5g/t for 418koz Au at the Klondyke Prospect ('Klondyke'), located in the centre of Calidus' 1.25 million-ounce JORC compliant gold resource at Warrawoona in the Pilbara of Western Australia.

Highlights

· Calidus publishes PFS demonstrating the commercial viability of the Warrawoona Gold Project

· Maiden JORC compliant Probable Ore Reserve of 8.9Mt @ 1.5g/t for 418koz Au at Klondyke

· Keras' total Calidus shareholding of 723,750,000 shares is currently valued at c.£12.78m1, All Calidus shares are now free trading on the ASX and will be distributed to Keras shareholders post regulatory approval processes

Russell Lamming, Chief Executive Officer of Keras, commented, "The publication of the excellent PFS results is a major milestone for Calidus as it continues to add value to the highly prospective Warrawoona gold project in Western Australia. The publication facilitates the issuance of the final Performance Shares increasing Keras' strategic interest in Calidus to 39.1% currently valued at c.£12.78m. and assists us in distributing the Calidus shares to our shareholders.

"As noted in our announcement on 2 July, the Company intends to distribute its Calidus shareholding pro-rata to Keras shareholders through a capital reduction and demerger process. This process requires the approval of shareholders, UK and Australian tax and regulatory authorities and subsequent approval by the Court. We believe shareholders will have a significant benefit by having direct exposure to this exciting Australian gold company as it moves towards development. I look forward to updating shareholders as soon as practicable as we continue with this value-adding initiative."

HIGHLIGHTS FROM CALIDUS' ANNOUNCEMENT

Project Economics

· NPV (pre-tax 8%) A$151m and IRR 40% based on a A$1,800/oz study gold price

· NPV (pre-tax 8%) A$234m and IRR 56% based on A$2,000/oz spot price

· NPV (post-tax 8%) A$108m and IRR 33% based on a A$1,800/oz study gold price

· NPV (post-tax 8%) A$168m and IRR 47% based on A$2,000/oz spot price

· LOM pre-tax cashflow A$367m

· Payback 26 months from production start based on a A$1,800/oz study gold price

· Payback 19 months from production start based on a A$2,000/oz spot price

· Capital cost of A$95m including contingency

· All-In Sustaining Costs (ASIC) of A$1,159/oz for Life of Mine costs from production start

Conservative Resource to Reserve conversion applied to minimise grade risk (section 9.3)

· Open Pit - 23% dilution, 5.0% ore loss to resource model

· Underground development - 10% dilution

· Underground stoping - 0.5m dilution skin, 80% stope recovery (in-situ pillars) and 5% ore loss

Ongoing De-risking of Resource

· Initial Resource infill drilling campaign completed - first tranche of results announced 20th June 2019 and in line with expectations with a strategy to upgrade to Measured Resource for payback period

· Drilling resumed in July 2019, with an initial focus on infill and extensional drilling around the Klondyke open pit and underground

Project Parameters

· 12-month processing plant construction, infrastructure and mine development pre-production phase, followed by 6-year mine life

· Average 97,000oz per annum gold production over the 6-year mine life via a 2mtpa conventional cyanide in leach ("CIL") processing circuit with single stage crush and SAG mill

Maiden Reserve (JORC) for Klondyke Open Pit and Underground

· Total open pit and underground Probable Mining Reserve at Klondyke 8.9Mt @ 1.5g/t for 418koz

· Reserve material represents 75% of milling inventory

1Using the Calidus closing mid-market price of A$0.031 per Ordinary Share on 16 July 2019, being the last dealing day prior to this announcement.

*An exchange rate of 0.57 GBP to 1 AUD has been used for figures contained in this RNS.

The information in this RNS has been extracted from the ASX announcement made by Calidus Resources Limited on 21 March 2019. To view a full version of the Calidus announcement, which includes figures and maps, please click here: https://www.calidus.com.au/investors/asx-announcements/. For more information on Calidus and Warrawoona, please visit www.calidus.com.au.

For the purposes of MAR and Article 2 of Commission Implementing Regulation (EU) 2016/1055, this announcement is being made on behalf of Russell Lamming, Chief Executive Officer. This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014.

**ENDS**

For further information please visit www.kerasplc.com, follow us on Twitter @kerasplc or contact the following:

Notes

Keras Resources plc is focused on building a strategic portfolio of resource assets. The Company provides investors with exposure to a portfolio of development assets, including manganese, cobalt and nickel in Togo, West Africa. It also has a significant interest in Calidus Resources Limited ('Calidus'), a highly prospective gold exploration and development company in Australia, which is currently undertaking a Pre-Feasibility Study at its Warrawoona gold project. Keras benefits from a highly skilled management team, which has extensive operational experience in Africa and Australia and proven success in advancing assets up the value curve.