Mr. Robert Suttie reports

MONTAUK METALS PROVIDES UPDATE ON ARBITRATION PROCESS

Further to its news releases of March 27, 2018, Feb. 25, 2019, Feb. 10, 2020, and Nov. 23, 2021, the arbitration brought by Montauk Metals Inc. against the Republic of Colombia to enforce the company's rights to compensation under the Canada-Colombia free-trade agreement has been suspended pending a resolution of financing the costs of the arbitration panel.

The arbitration is being conducted in two phases. Phase 1 is a determination of jurisdiction and liability issues. Phase 2 is a determination of damages, discovery jurisdiction and liability as found. Montauk contends that Colombia breached its obligations owed to Montauk, including specific obligations under the FTA. The claims include Colombia's refusal or failure to compensate the company for the losses incurred as a consequence of Colombia's prohibition of mining in the paramos (high-altitude ecosystems).

Montauk is currently reviewing the status of the arbitration and the merits of pursuing further financing to recommence the arbitration. The final outcome of the phase 1 arbitration and the eventual outcome of the phase 2 arbitration cannot be predicted at this time. Certain costs of the proceedings including legal and arbiter costs have exceeded the original estimates and the company has also had to pay Colombia's half of the arbiter fees. The total cost to obtain a final resolution to the arbitration is unknown at this time; however, the company expects that the cost would be a minimum of $400,000 (U.S.) to conclude the phase 1 jurisdiction and liability ruling. The company has a cash balance of approximately $100,000 and is contesting $473,000 in legal fees representing a portion of the legal fees it has paid to date.

The company is very mindful of balancing the potential for reward against the cost of share dilution arising pursuant to a financing. There can be no assurance that the company will proceed with the arbitration at this time given the need for a financing. Management of the company has not been successful in sourcing financing from institutional, individual or litigation financing investors. In particular, several litigation financing groups have been approached and there has been no interest to support the arbitration at this time. The arbitration will be dismissed by Nov. 9, 2023, if no decision is made to proceed and to continue financing the costs. The company will continue solicit financing, but there can be no guarantee that the company will be able to obtain financing on commercially attractive terms or at all. Management of the company will continue to provide updates on material developments of the status of the arbitration.

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