Kaili Reports Significant Rare Earth Oxide Grades in South Australia Drilling

Exploration Focus on Rare Earth Elements

Kaili Resources Limited continues to advance its rare earth elements (REE) exploration efforts in South Australia's Limestone Coast region, where it holds full ownership of three tenements; Lameroo, Karte, and Coodalya; spanning nearly 2,000 square kilometres. These tenements lie within the Murray Basin, an area known for ionic clay deposits that can host REEs, minerals increasingly critical for future technologies.

Drilling campaigns conducted over 2024 and 2025 have yielded encouraging preliminary results. Using portable X-ray fluorescence (pXRF) scanning, Kaili identified multiple drill holes with significant concentrations of Total Rare Earth Elements (TREE), prompting a more focused exploration approach.

Mallee Project, The New Frontier

Following the September 2025 drilling program, Kaili pinpointed the Mallee Project area within the Coodalya tenement as a promising target. In late January 2026, the company commenced a new drilling campaign involving 30 holes averaging 20 metres depth, primarily focused on this site. This program aims to delineate the extent and grade of mineralisation more precisely, building on the broad-spaced reconnaissance drilling previously undertaken.

Laboratory assays from samples collected in late 2025 have confirmed significant Total Rare Earth Oxide (TREO) grades, with some intervals exceeding 500 parts per million. These results are particularly notable given the partial nature of pXRF readings and underscore the potential of Kaili's tenements to host economically viable REE deposits.

Financial and Operational Context

Exploration expenditure for the quarter was modest at $13,000, reflecting a disciplined approach to advancing the projects. Kaili reported a net cash decrease, ending the quarter with $16,000 in cash and $790,000 in unused financing facilities. Importantly, interest-free loans and finance facilities provided by related parties, including director Jianzhong Yang, have been extended to April 2027, providing a financial runway to support ongoing exploration activities.

Meanwhile, the company’s gold and copper exploration licence application near Tennant Creek in the Northern Territory remains pending, with no activity reported during the quarter. Kaili’s focus remains firmly on the rare earths potential in South Australia for now.

Outlook and Strategic Implications

Kaili Resources’ recent assay results and the initiation of a targeted drilling program at the Mallee Project mark a pivotal phase in its exploration journey. The confirmation of significant TREO grades aligns Kaili with broader industry trends prioritising rare earths, critical components in clean energy and advanced technologies. However, the company’s limited cash reserves and reliance on related party financing highlight the importance of securing further capital or partnerships to sustain momentum.

As the Mallee drilling program progresses, investors will be keen to see detailed assay results and any resource estimations that could underpin future development decisions. The company’s ability to translate early-stage exploration success into a defined resource will be crucial in shaping its market prospects.