Ann: Long Form Doc.Now Finalised and Executed for the Mabilo, page-64

Atorni time to revisit the Singapore International arbitration:

THE FINAL AWARD IN THE MABILO SINGAPORE ARBITRATION FINDS

IN FAVOUR OF MT. LABO

ANNOUNCEMENT TO THE TORONTO STOCK EXCHANGE

AND AUSTRALIAN SECURITIES EXCHANGE

25 AUGUST 2020

The Board of RTG Mining Inc. (“RTG”, the “Company”) (TSX Code: RTG, ASX Code: RTG) is pleased to announce that Mt. Labo Exploration and Development Corporation (“Mt. Labo”) has received a favourable Final Award in the international arbitration against Galeo Equipment Corporation (“Galeo”) in the Singapore International Arbitration Centre (“SIAC”).

On 21 August 2020, the Tribunal handed down its Final Award in the matter.

The Final Award is a resounding vindication of Mt. Labo’s position.

Mt. Labo prevailed in all matters considered important. The Tribunal also dismissed all of Galeo’s counterclaims.

THE TRIBUNAL’S DECLARATIONS AND ORDERS

The Tribunal made its orders after a full hearing and considering all the evidence and submissions placed before it, ruling based on Philippine Law and it was declared and determined as follows:

• • Mt. Labo validly terminated the Joint Venture Agreement (“JVA”);
• • Mt. Labo validly rescinded the Memorandum of Agreement (“MOA”), which the parties had previously entered into to settle their disputes;
• • Galeo was not and is not entitled to a 42% (36% + 6%) shareholding in Mt. Labo pursuant to the MOA due to its breaches of the MOA and because the MOA was validly rescinded;
• • Galeo was not and is not entitled to the additional 6% interest in the joint venture (“JV”);
• • Galeo was not and is not entitled to be named as a co-permittee of the Mt. Labo Exploration Permit and the Mt. Labo Exploration Permit Applications;
• • Galeo was not and is not entitled to be named as an authorised operator and/or exclusive driller of the JV;
• • Galeo was not and is not entitled to conduct drilling services at a rate higher than at arms’ length terms competitive with alternative independent suppliers post the Earn-in Period
• • • Galeo breached its good faith obligation, fiduciary duties and duties of a trustee in the course of the joint venture activities. Within 30 days of the Final Award, Galeo shall:

  
  

  1. (i) Provide Mt. Labo with complete information on the Surface Rights acquired by Galeo and all of its nominees, whether directly or indirectly;
  2. (ii) Transfer the Surface Rights held by Galeo to Mt. Labo at cost;
  3. (iii) Procure Galeo’s nominees to transfer the Surface Rights held by them to Mt. Labo at cost;
  4. (iv) Account to the JV for any profits made by Galeo from its acquisition of the Surface Rights in competition with the JV;
  5. (v) Deliver the originals of all permits and other related documents obtained from and issued by government agencies to Mt. Labo;
  6. (vi) Sell its interest in the JV to Mt. Labo at book value minus a 10% discount pursuant to Clause 11.2 of the JVA; and
  7. (vii) Remove all equipment and/or personnel from land in the Mabilo Project site that it does not own by virtue of the Surface Rights and also remove all of its equipment and personnel, once the transfer of the Surface Rights is completed, from the transferred land.
  8. • Mt. Labo is entitled to set off the “cost” that it is required to pay Galeo for the transfer of Surface Rights against the amounts that Galeo has been ordered to pay Mt. Labo in this Final Award.
  9. • Galeo (including Galeo’s agents or employees or otherwise), shall be restrained from:

  
  

  1. (i) representing to any person or entity that the JV still exists;
  2. (ii) representing to any person or entity that Galeo is the authorised and/or exclusive operator of the Mabilo Project and/or the JV;
  3. (iii) representing to any person or entity that Galeo is an agent of the Mabilo Project; and
  4. (iv) using or divulging any information received in connection with the JV to any person or entity.

  The Final Award is the formal and final award of the Tribunal. The majority of the three-member Tribunal ruled in favour of Mt. Labo. Galeo’s nominee on the three-member Tribunal wrote a dissenting opinion.

  If required, enforcement procedures will be undertaken by Mt. Labo in the Philippines with advice from counsel confirming that an arbitral award can only be validly refused for a failure to meet procedural requirements.

  DAMAGES AND COSTS AWARD TO MT. LABO

  The Tribunal also ordered Galeo to pay damages of approximately US$18.6 million (plus interest at 6% from various dates) and legal costs, including the Tribunal’s fees of approximately S$7.45 million.

  That represents a total monetary award in favour of Mt. Labo of approximately A$33.6 million plus interest.

  WHAT THE AWARD MEANS TO MT. LABO

  The practical effect of the Final Award is that Galeo is not a shareholder of Mt. Labo and the JV has been terminated. This will see Mt. Labo’s percentage interest in the project rise from 58% to 100% once the formalities are completed. Given the book value of the net assets of the JV are negative as to date it has been an exploration endeavour, Mt.

  Labo will not have to pay anything for that increase. Mt. Labo also secured the right to set off any costs to transfer the surface title rights acquired by Galeo or its nominees against the amounts Galeo has been ordered to pay to Mt. Labo.

  Mt. Labo, together with its local partner and Chairman, Ms Gloria Tan Climaco, has been able to use this time productively to enhance the value of its interest in the Mabilo Project, having only recently secured the mining permit. With gold, copper and iron ore pricing having increased significantly (21 August 2020: Cu US$2.96/lb, Au US$1,942.40/oz, 62% Fe US$122.79/t), Mt. Labo will now hold 100% of a project with a NPV of US$463.2 million (based on the Feasibility Study – updated only for commodity price changes), almost 200% higher than the original review undertaken for the Feasibility Study (details announced on 18 March 2016).

  There is also significant exploration upside from the base case addressed in the Feasibility Study, as Galeo unilaterally cancelled all drilling, with the current resource open at depth and along strike, and strong potential to identify the porphyry source, factors which could materially increase the scale of the project.