Kaili Reports 1m at 356ppm TREO in Lameroo Drilling, Plans Larger Programs

Exploration Focus and Regional Context

Kaili Resources Limited continues to concentrate its efforts on rare earth elements (REE) and precious metals exploration, targeting critical minerals with strong future demand prospects. The company holds 100% interests in three tenements, Lameroo, Karte, and Coodalya, located within the Limestone Coast region of South Australia. These tenements lie within the Murray Basin, an area known for ionic clay-style REE deposits, where peer Australian Rare Earths (ASX:AR3) has reported significant resource estimates.

The proximity to AR3’s successful projects provides a compelling geological context for Kaili’s exploration ambitions, with the company aiming to delineate REE mineralisation within the fine clay fractions of Tertiary strandlines.

Drilling Results and Exploration Progress

In February 2024, Kaili completed an initial aircore drilling program along road verges at Lameroo, designed to identify targets for more intensive infill drilling. The assay results were encouraging, with notable Total Rare Earth Oxides (TREO) intersections such as 1m at 356 ppm from 18m depth and 1m at 271 ppm from 2m depth. Magnetic rare earth oxides (MREO), critical for battery technologies, comprised approximately 17% of the TREO content.

Building on these results, Kaili has planned larger drilling campaigns across all three South Australian tenements within the current financial year. The company has engaged with local councils and is seeking environmental approvals (EPEPRs) to commence drilling in the June quarter, focusing on shallow aircore holes up to 20 meters deep to minimise environmental and community disruption.

Portfolio Rationalisation and Licence Status

While advancing its South Australian projects, Kaili has surrendered its Holey Dam tenement in Western Australia after laboratory assays indicated insufficient rare earth element concentrations to justify further exploration. This decision reflects a disciplined approach to capital allocation, focusing resources on higher-potential assets.

Meanwhile, the company awaits the grant of the Kovacs exploration licence in the Northern Territory, targeting gold and base metals near Tennant Creek. No exploration activities occurred during the quarter pending licence approval, which remains a key milestone for future work.

Financial Position and Funding

Kaili’s exploration expenditure for the quarter was modest at $32,000, covering geology, project management, and tenement costs. The company reported net operating cash outflows of $123,000 and investing outflows of $51,000, leaving cash reserves at a lean $25,000 as of quarter-end.

To support ongoing activities, Kaili secured an extension on a $4.599 million interest-free loan facility from a related party, Yitai Group (Hongkong) Co., Ltd, extending repayment to April 2026. Additionally, Kaili Holdings Limited, linked to a company director, agreed to provide up to $1 million in unsecured working capital funding. These arrangements provide a runway of approximately six quarters based on current expenditure levels, though the company’s liquidity position warrants close monitoring.

Outlook and Strategic Implications

Kaili Resources is positioning itself to capitalise on the growing demand for rare earth elements, particularly those critical to battery and clean energy technologies. The promising initial drilling results at Lameroo and the planned expanded programs across its South Australian tenements could unlock significant value if further mineralisation is confirmed.

However, the company’s low cash balance and reliance on related-party financing highlight the importance of operational execution and potential capital raises to sustain exploration momentum. The surrender of the Holey Dam project underscores a pragmatic approach to portfolio management, focusing on assets with the most promising geological potential.