Using a Landcruiser-mounted auger rig the company has been able to rapidly drill-up a deposit that delivers it 101 million tonnes grading 840 parts per million total rare earth oxides, with around 40% in the indicated category.
The magnetic REO grade is 233ppm.
The Tower deposit starts at surface and is described as containing thick zones of mineralisation.
The resource covers just 20% of the area within the 57-481Mt grading 530-1050ppm TREO exploration target.
Its next step is to complete and infill and extensional drilling at Tower, and reconnaissance drilling at Tower West.
The Tower mineralisation extends over 5km, and Tower West over 3km based on drilling to date.
It is also keen to see the results of metallurgical test work that will hopefully confirm the rare earths can be recovered from the clay layer and inform a path for development studies.
The junior has flagged "strategic discussions" to help advance the project, which is also prospective for nickel, copper, cobalt, and platinum group metals.
CEO Mark Major said the maiden resource was a "game-changer for Krakatoa" as it started talking with end users and industry groups related to potential development, funding, offtake arrangements, and downstream processing opportunities.
While a lot of rare earths have been discovered in Australia over the past year, and projects from the likes of Iluka Resources and Hastings Technology Metals are in active development, there's still space in the market for other developers.
Major said Tower had free-digging dirt, low strip ratio, extensive mineralised thickness and tenure that doesn't compete with agriculture for land use.
The company is also mobilising an RC rig to site for its first sulphide drilling, to test for battery metals at six conductors defined by airborne and ground electromagnetic surveys, with a focus on the Milly Milly and North Bullbadger prospects.
Mt Clere is a 2300sq.km tenement package in the Gascoyne region, about 200km northwest of Meekatharra.
Krakatoa started the quarter with A$3 million cash.
Krakatoa's shares peaked at 14c in April, and closed at 5.8c on Friday, valuing it at $20 million.
