Dr. Tim Coughlin reports

ROYAL ROAD AND MSB HOLDINGS ENTER INTO JOINT VENTURE SHAREHOLDERS AGREEMENT FOR MINERAL EXPLORATION

Royal Road Minerals Ltd. has entered into a joint venture shareholder agreement with MSB Holdings Ltd. with respect to establishing a new company (JVCO) for the purpose of copper, gold and other metals exploration in an area of interest comprising the Kingdom of Saudi Arabia (KSA) and any other geographical area (including but not limited to those states which are members of the Gulf Cooperation Council) as may be agreed between Royal Road and MSB.

In February of this year, Royal Road and MSB entered into a strategic alliance agreement and non-binding letter of intent with respect to copper, gold and other metals exploration in the Kingdom of Saudi Arabia (see press release Feb. 9, 2023). The strategic alliance agreement has led to the development of an exploration decision support system, the generation of priority target areas, and an initial 12-month work program and budget for exploration operations in KSA. The letter of intent provided for a period of exclusivity, during which the parties have now agreed to the terms and conditions governing a joint venture share holder agreement for the establishment of JVCO, which is to be registered in KSA and owned equally on a 50-50 basis by the parties.

Summary terms of the agreement, subject to regulatory approval, are as follows:

• Whilst each party holds 50 per cent of the issued shares of JVCO, the board of JVCO shall be made up of an equal number of directors appointed by Royal Road and MSB. If a party's shareholding in JVC is reduced to 30 per cent or less of the issued shares of JVCO, that party shall no longer be entitled to appoint any directors to the board.
• Royal Road will act as operator for the JVCO and all operations in relation to the JVCO will be conducted on the basis of an approved program and budget prepared by Royal Road and approved by the board of JVCO.
• If a party fails to finance its relevant proportion of the financing required pursuant to a program and budget as and when required, such failure shall cause its shareholding in JVCO to be diluted on a pro rata basis.
• Provided that it owns more than 30 per cent of the total issued shares in JVCO, the non-contributing party shall have a catch-up right to restore its 50-per-cent shareholding at such time as the board has approved a further program and budget which requires further financing by the parties.
• Dilution to below 20 per cent shall convert to a net smelter royalty of 2 per cent.
• The agreement contains customary deadlock provisions, transfer restrictions and matters reserved for shareholder approval.

The exploration program and budget for the first 12 months shall be $2.1-million (U.S.) and is aimed principally at securing a competitive exploration land package in KSA.

Dr. Tim Coughlin, Royal Road's president and chief executive officer, stated: "The work we have done so far, in relation to developing an exploration decision support system and generating and prioritizing exploration targets, has confirmed our contention that the Arabian Shield is one of the most prospective regions in the world. Our interaction with regulators, other members of government, and colleagues in the exploration and mining community, further upholds our view that the Kingdom of Saudi Arabia is an impressively supportive and pro-active host country. The kingdom values its mining sector, is committed to its Vision 2030 initiative, to sustainably developing its mineral resources and to playing a key role in the supply of critical metals. We are proud to join forces with a truly outstanding partner in MSB and we are excited by the prospect of working together with the joint goal of using our exploration and local advantage to play a key role in the kingdom's ambitions and global aspirations for economic security and a just and equitable energy transition."

Tareq Telmesani, CEO of MSB Holdings Group, stated, "We are pleased to make our initial entry into the mining sector through this joint venture and are confident that in Royal Road we have an outstanding partner and one with whom we look forward to developing a long and mutually beneficial relationship."

We seek Safe Harbor.