An anonymous director reports

MORRO BAY ANNOUNCES RELEASE OF FIRST QUARTER FINANCIAL RESULTS

Morro Bay Resources Ltd. has filed its first quarter 2015 consolidated condensed interim financial statements, and the related management's discussion and analysis of those financial statements. Copies of the financial statements and MD&A can be viewed on SEDAR or on the company's website.

During the quarter ended Dec. 31, 2014, the company completed its $500,000 drilling program at the Penoles project located in the state of Durango, Mexico, fulfilling the project spending requirement outlined in the amended option agreement with Riverside Resources Ltd.

Subsequent to quarter-end, Morro Bay renegotiated and received an extension on its option agreement with Riverside for the Penoles project. The amended agreement removes the former requirement for the company to make a cash payment of approximately $1.35-million to Riverside, and expires on March 31, 2015. In order for the company to earn a 51-per-cent interest in the project, Morro Bay is required to make payment of $750,000 to Riverside by March 31, 2015 (payable in cash or Morro Bay shares at Morro Bay's election, provided that if the value of Morro Bay shares is less than five cents, such payment must be made in cash).

Upon exercise of the option, a joint venture between Morro Bay and Riverside will be formed. That joint venture will see:

• Morro Bay be appointed as operator of the joint venture;
• Morro Bay is required to incur joint venture expenditures of $750,000 for each of the first three years (any amounts expended over $750,000 will be credited toward the following year's expenditure requirements);
• Riverside shall have a credit of $100,000 and $1.25-million (U.S.) against the first joint venture expenditures incurred by the joint venture;
• Should the joint venture fail to incur joint venture expenditures of at least $750,000 in each of the first three years, Riverside will have to right to acquire 100 per cent of Morro Bay's interest by returning to Morro Bay 80 per cent of the common shares issued by Morro Bay to Riverside.

In addition, assuming the exercise of the 51-per-cent option, the company retains the right to earn an additional 14 per cent (65-per-cent total interest) in the Penoles project without change to the previously agreed upon terms. Refer to the MD&A for detailed disclosure.

As at Dec. 31, 2014, the company had cash and cash equivalents of $294,559 ($533,748 as at Sept. 30, 2014). Current cash and cash equivalents stand at approximately $150,000.

We seek Safe Harbor.