Ann: Proposed Issue of Securities - Updated, page-63

Hi Norway,

I have read through the QTR report, the following indicates they are just building working capital due to the lack of sales during the previous QTR which was impacted by downtime from the processing facility.

Cash: US$1.4 million as at 30 September 2023 (US$5.6 million as at 30 June 2023).
Borrowings: US$7.9 million as at 30 September 2023 (US$5.8 million as at 30 June 2023)

Although the borrowings had increased, it appears this relates to MRC drawing down on GMA Garnets US$10mil loan. This loan term is 5 years.

MSR has drawn down US$2.4 million to date towards the project, which is reflected in the increase in
borrowings during the September 2023 quarter, partially offset by other lease repayments during the
quarter. MSR has further drawn down an additional US$1.0 million subsequent to the September 2023
quarter.

The upgrades required to improve the removal of the fines and the additional water for the processing facility is funded by GMA Garnets loan.

Sub-optimal fine tailings removal - Fine tailings from the Inland Strands processing circuit reduces
product grades by entraining other minerals and causing significant process plant downtime. Two
(2) solutions to this problem have been identified: (i) double efficiency cyclones to increase the
removal of fine tailings from ore upon presentation to the PCP; and (ii) a new water circulation
circuit including a fresh seawater infeed line to the secondary process plant and a return line. These
two solutions are fully funded as part of the US$10 million GMA Loan Agreement and are expected
to be in operation by the end of Q4 2023;