Catalyst ANN this week that the mineral reserve estimate for Henty Mine has been increased through exploration drilling to 357,000oz at avergage grade of 4.5g/t.

This means that the resource is now 13% larger than at last estimate in June 2020, despite 16 months of extraction/production drawing on the last estimate.

Catalyst is having great success at Henty, in production as discussed in previous ANN and Straw & in exploration as seen in this ANN. The current MRE potentially equates to north of around $250m pre-tax profit at the current POG, all ele being equal

Henty is likely to continue to increase its resource base, and provide cash flow to fund exploration activities in the Bendigo area. Success in Bendigo (Four eagels, Tanderra, Boyds damn etc) is the real 'catalyst' to change the companies fortunes. Eagerly awaiting incoming drill results.

Key points from ANN

• Henty mineral resources increase by 13% including gold production in 2020-21
• Mineral resources now 2.5 million tonnes @ 4.5g/t Au for 357,400 ounces of gold
• Zone 96 more than doubled to 84,500 ounces of gold at 6.9g/t Au
• Underground drilling continues to intersect high grade gold mineralisation

Catalyst metals owns and operates the Henty Gold Mine in Tasmania and has some potential teir 1 tenements in Victoria, near Bendigo in the JV Four eagles/boyds damn prospects and Tandarra.

Catalyst tapped the market for funds to purchase Henty for $20m and since have been running the UG operation. They have increased effeciency in both production and recovery whilst reducing costs. This purchase has already paid for itself within half a year of purchase.

Henty has a JORC Resource 334,000 ounces @ 4.3g/t. There is significant upside to be gained at Henty through exploration (Neglected by previous operators), targetting higher grade known veins and continuing to drive production costs down.

The Objective at Henty is to produce >50,000oz/yr on a sustainable basis over time (has previously produced up to 140,000z. Last quarter 6,327oz were produced at an with current AISC of around $1500/ounce for revenue of $16m. I'll allow you to apply the POG you see fit and esitmate what future revenue may be on 50000oz/yr.

The free cash flow generated from Henty will most likely be more than enough to fund exploration and development at either or both of Catalysts exploration projects.

Four Eagles/Boyds Damn is already a viable prospect for development. Catalyst are currently aggresively drilling out prosprects to prove out the ore bodies. Early plans are for a open cut pit to mine near surface gold then to develop and inpit UG portal when they can continue drilling out the orebody and go after the lower lying high grade areas. This is currently going through Environmental Effects Study (EES).

Tanderra is similar to Boyds Damn, although at an ealier stage. Potential there for an open cut starter put into a UG portal and operation

This staged plan open cut > underground will keep cap-ex low and get revenue flowing quickly. I envision the open pits to produce enough revenue to self fund the UG exploration and development. The grades and the depth level of the orebodies are exceptional and are increasing in ounces with each round of drill results. As such, predict a very short pay back period to be shown in feasibility studies etc.

Large holding by Hancock Prospecting, who are serious players in the mine development game. I would not suprise me at all the see Hancock look to acquire the Catalyst stake in the JV or make a play for the whole company due to the value proposition of the assets.

How to value?

They have around 30m cash at bank.

They have two great tenements that i believe will more than likely become operating gold mines.

They are producing around 25000oz/y at the Henty operation, with ambitions to increase to 50000oz.

A better indication will be given once JORC for Boyds damn/four eagles and Tandarra are produced. Then more clarity when feasibility studies are conducted.