*The 30 September 2024 Quarterly Activities Report from...

*The 30 September 2024 Quarterly Activities Report from Dreadnought Resources Ltd provides a detailed update on the company’s progress across multiple projects and corporate activities. Here is a structured summary:

Project Highlights and Exploration Activities:

1. Mangaroon Project (100% owned):

   • Gold (Au): Developed a commercialisation strategy with a strategic acquisition of ~300km² along the Mangaroon Shear Zone.
   • Niobium-REE (Nb-REE): Drilling at Gifford Creek Carbonatite revealed thick, high-grade niobium intercepts, confirming significant potential for critical minerals.
   • Recent Success: Exceptional gold recovery results from Star of Mangaroon, supporting their commercialisation strategy.

2. Tarraji-Yampi (80%/100% owned):

   • Identified six new mineral zones and four off-hole conductors.
   • The project includes Cu-Au (Copper-Gold) mineralisation and has potential for large-scale exploration similar to the DeGrussa and Monty systems.

3. Other Projects:

   • Bresnahan (100% owned): Focused on heavy rare earth elements (HREE), gold, and uranium.
   • Central Yilgarn: Exploration continues for gold, iron ore, and base metals with partnership or divestment options under review.

Corporate Activities:

• Capital Raising:

  • Raised $3.7 million through a share placement at $0.018 per share to advance niobium and gold exploration.
  • Directors subscribed to 11.67 million additional shares, raising total director investments to $6.8 million.

• Exploration Incentive Scheme (EIS) Grants:

  • Secured ~$0.5 million in EIS grants for drilling and surveys at Gifford Creek and Tarraji-Yampi.

• R&D Incentives:

  • Expecting a $1 million R&D tax incentive in November 2024 for work on processing technologies.

• Director Changes and Fee Reductions:

  • Non-executive directors reduced their fees by 20%, with the option to receive shares instead.

Financial Position:

• Cash and Receivables:
  • $2.1 million as of 30 September 2024.
  • Ongoing efforts to transform into a self-funded explorer by progressing core projects and commercialising non-core assets.

Upcoming Milestones:

• November 2024:

  • Diamond drilling results from the Star of Mangaroon.
  • Airborne geophysical survey results at Mangaroon.
  • Initial Mineral Resource estimate for the Star of Mangaroon.

• December 2024:

  • Additional exploration target generation at Mangaroon.
  • Annual General Meeting scheduled for 28 November 2024.

This report demonstrates Dreadnought Resources’ strategic focus on transitioning towards self-sustainability, leveraging its mineral assets to unlock further value

Here’s a breakdown of Dreadnought Resources Ltd's financial position as of 30 September 2024:

Key Financial Indicators

1. Cash Flow Position

   • Cash at the beginning of the quarter: $1.45 million
   • Cash at the end of the quarter: $1.08 million

   Net Change:

   • A decline of $370,000 over the quarter, despite raising $3.5 million through a share placement.

2. Breakdown of Key Cash Flows

   • Operating Activities:
     • Net outflow: $560,000
       • Staff costs: $178,000
       • Administration/corporate costs: $344,000
   • Investing Activities:
     • Exploration costs: $2.99 million
     • Net cash outflow from investing activities: $3.05 million
   • Financing Activities:
     • Raised: $3.5 million from equity issues
     • Net inflow from financing: $3.24 million after transaction costs

Current Cash Reserves and Receivables

• Cash on hand: $1.08 million

• Expected Receivables:

  • R&D Tax Incentive: ~$1 million expected in November 2024
  • Exploration Incentive Scheme (EIS) Grants: ~$500,000 expected in December 2024

  Total Available Funding (Cash + Receivables): ~$2.6 million

Estimated Funding Capacity

• Total Outflows per Quarter:

  • $3.55 million (combining exploration and operating costs)

• Quarters of Funding Available:

  • 0.3 quarters, meaning Dreadnought’s cash reserves will last approximately one month without further financing.

Future Plans to Maintain Liquidity

1. Share Placements:

   • The company has commitments for additional shares to be issued after shareholder approval at the AGM on 28 November 2024.

2. R&D and EIS Incentives:

   • $1.5 million expected in tax incentives and grants by the end of 2024.

3. Reduced Exploration Expenditure:

   • Seasonal reductions in exploration activities will lower outflows next quarter.

Conclusion

While Dreadnought Resources raised $3.5 million during the quarter, high exploration and operational expenses have significantly reduced its cash reserves to $1.08 million. Without additional funding, the company has only enough cash to last one month under current spending levels. However, the company expects $1.5 million in receivables soon, and with planned cost reductions, it may extend its runway. Nevertheless, additional fundraising or share placements will be essential to sustain operations in the medium term.

The company’s financial health relies heavily on external funding through placements, tax incentives, and exploration grants, indicating a vulnerable but manageable cash flow if these sources materialize as expected.

*GPT4o