Besra Gold Inc. Announces: Response to the ASX Aware Letter

Melbourne, Victoria, Australia--(Newsfile Corp. - May 15, 2024) - Besra Gold Inc. (ASX: BEZ) ("Besra" or the "Company") announces that on 15 May 2024, AEST, it released to the Australian Securities Exchange its response to the ASX Aware Letter.

Dear Scarlette

BESRA GOLD INC ('BEZ') - ASX AWARE LETTER (REFERENCE: 93966)

We refer to your letter dated 9 May 2024 and respond to your questions as follows:

1. Does BEZ consider the remittance of US$9,827,854.60 by Quantum pursuant to the terms of the GPA as disclosed in BEZ's 28 December 2023 announcement to be information that a reasonable person would expect to have a material effect on the price or value of its securities?

Response to Question 1

Yes.

2. If the answer to question 1 is "no", please advise the basis for that view, commenting specifically on why BEZ marked the 28 December 2023 Announcement as 'price sensitive'.

Response to Question 2

Not applicable.

3. When did BEZ first become aware:
   
   3.1 of any delay to the planned remittance of the December Quantum GPA Instalment?

Response to Question 3.1

As there was no fixed date for the receipt of the December Quantum GPA Instalment, BEZ monitored the situation on a daily basis to confirm (or otherwise) receipt of the instalment. On 31 January 2024, BEZ informed the market in its December 2023 Quarterly Activities/Appendix 5B Cash Flow Report that the December Quantum GPA Instalment was 'to be received' but no expected date of receipt was disclosed at that time.

In order to respond to the March Price Query Announcement on 28 March 2024, the Company liaised with Quantum who confirmed that the December Quantum GPA Instalment was expected to be received by the Company in April 2024, following the opening in Australia by Quantum of a new US$ bank account.

Prior to the release of the Company's next price sensitive market announcement, which was in the March 2024 Quarterly Activities/Appendix 5B Cash Flow Report that was released on 30 April 2024, the Company sought an update from Quantum as to the status of the December Quantum GPA Instalment. Quantum advised 20 minutes prior to the release of the March 2024 Quarterly Activities/Appendix 5B Cash Flow Report (which occurred on 30 April 2024 at 4:15pm (AWST)), that the December Quantum GPA Instalment was not expected to be transferred to the Company until May 2024 for the reason that it has been unable to open a US$ bank account in Australia. Having been made aware of the delay to the receipt of the December Quantum GPA Instalment at this time, the Company immediately updated the market in the March 2024 Quarterly Activities/Appendix 5B Cash Flow Report of this delay.

3.2 that the December Quantum GPA Instalment would not be received in April 2024 as disclosed by BEZ in its Response to ASX Price Query?

Response to Question 3.2

Refer to response to Question 3.1 above.

4. If BEZ first became aware of the information referred to in question 3 before the date of the relevant announcements, did BEZ make any announcement prior to that date which disclosed the information? If not, please explain why the Information was not released to the market at an earlier time, commenting specifically on when you believe BEZ was obliged to release the Information under Listing Rules 3.1 and 3.1A and what steps BEZ took to ensure that the Information was released promptly and without delay.

Response to Question 4

Not applicable.

5. Has a 'US$ bank account in Australia' been successfully opened to permit GPA funds to be remitted from Quantum to BEZ?

Response to Question 5

No.

6. If the answer to question 5 is 'yes', please advise the date the account was opened?

Response to Question 6

Not applicable.

7. If the answer to question 5 is 'no', when is the 'US$ bank account' expected to be opened?

Response to Question 7

On 13 May 2024, Quantum advised the Company that it is proceeding with applications to open a US$ bank account with both the Commonwealth Bank (CBA) and Bendigo Bank (Bendigo). Quantum indicated that the CBA US$ account is awaiting activation and that Bendigo is conducting its Know Your Client process. Neither the Company, nor Quantum, is able to confirm the date that an Australian US$ bank account will become active. However, the Company notes that Quantum has continued to progress the opening of the necessary accounts and kept the Company informed with respect to this process.

The Company will update the market in the event Quantum has not successfully opened an Australian US$ bank account in May 2024 (as was the anticipated timing set out in its March 2024 Quarterly Activities Report).

8. Is it correct that BEZ has received no funds from Quantum pursuant to the GPA since November 2023?

Response to Question 8

Yes.

9. If the answer to question 8 is 'no', please provide details of funding received from Quantum pursuant to the GPA since November 2023.

Response to Question 9

Not applicable.

10. Noting the GPA does not oblige Quantum to make additional monthly deposits, does BEZ consider that Quantum has the ability to make such additional deposits?

Response to Question 10

Yes, subject to a US$ bank account being opened.

11. If the answer to question 10 is 'yes', please explain the basis for BEZ reaching that conclusion, commenting specifically on the ongoing delay to the remittance of the December Quantum GPA Instalment to BEZ.

Response to Question 11

As disclosed in the Company's Quarterly Activities Report (lodged with ASX on 30 April 2024), Quantum confirmed that it has sufficient funds to meet the US$9.8m payment and that the payment will be remitted to BEZ in May 2024, following the expected opening of a US$ bank account in Australia.

Quantum further confirmed:

• that it intends to renegotiate the weighted average gold price for the US$9.8m deposit so that it reflects current gold prices; and
  
  
• its ongoing commitment to both BEZ and the GPA.

12. Given the ongoing delay to the remittance of funds, please explain the basis for the following statement contained in the Response to ASX Price Query 'The US$9,827,855 that was the subject of the December Announcement has not been received, but is expected to be received in April 2024.'

Response to Question 12

The basis for the statement made by BEZ in the Company's 28 March 2024 'Response to ASX Price Query' announcement is that it is a statement of fact that:

i) the US$9,827,855 had not been received; and

ii) that Quantum had advised BEZ that they expected to pay the US$9,827,855 instalment during April 2024 because Quantum were of the view that a US$ bank account in Australia would have been opened during April 2024.

13. Please explain the basis for the following statement contained in BEZ's March 2024 Quarterly Activities Report '…the recommencement of further payments by Quantum under the US$300m Gold Purchase Agreement (GPA) expected to re-commence [sic] in June/July 2024' commenting specifically on the following:

13.1 the ongoing delays to the receipt of the December Quantum GPA Instalment;

13.2 that no funds have been received pursuant to the GPA since November 2023;

13.3 that Quantum have remitted funds to BEZ in only two of a possible ten months since the GPA became binding; and

13.4 the GPA terms do not oblige Quantum to make additional payments to BEZ.

Response to Questions 13.1 - 13.4

As disclosed in the Company's Response to the ASX Price Query (lodged with ASX on 28 March 2024), the reason for the non-receipt of the US$9.8m instalment is that Quantum's former Australian bank closed Quantum's Australian bank accounts in January 2024 without explanation.

Following Quantum's bank account closures, Quantum transferred US$9,827,855 from Malaysia to its lawyers' US$ trust account in Melbourne, unfortunately these funds were returned to Malaysia as the nature of the funds was to purchase gold, hence the bank rejected the transfer and returned the funds to Malaysia.

Quantum follows a set sequence with its fund transfers in order to meet its compliance (Sharia law) and gold purchases transactions which have been approved by the Malaysia regulator. This strict process disallows funds being transferred directly to BEZ or any other entity.

Quantum is not legally obligated to make any payments pursuant to the GPA. Irrespective of that fact, Quantum has remitted to Besra a US$5,000,000 deposit, a total of US$20,646,326 pursuant to the GPA for the October and November 2023 instalments and unsuccessfully attempted to remit (in January 2024) a further US$9,827,855 for the December 2023 instalment. As such, BEZ has received from Quantum a total of US$25,646,326 pursuant to the GPA.

Whilst CDI approval for the GPA was received in July 2023, the GPA's conditions precedent were not satisfied until 20 September 2023 (refer ASX announcement entitled 'Conditions Precedent Satisfied' dated 20 September 2023). As such, the GPA has been operative for some 7 months (not 10 months as indicated in Section D and Question 13.3 of ASX's Aware Letter). Of those 7 months, Quantum has been unable to remit funds pursuant to the GPA since the commencement of January 2024 (being some 4-5 months) for the reasons set out above.

Significantly, as disclosed in the Company's Quarterly Activities Report, Quantum (as a 30% CDI holder) has confirmed its ongoing commitment to both BEZ and the GPA and that it will (subject to opening an Australian US$ bank account) remit in May 2024 the US$9.8m.

14. Please confirm that BEZ is complying with the Listing Rules and, in particular, listing rule 3.1.

Response to Question 14

BEZ confirms that it is in compliance with the Listing Rules and, in particular, Listing Rule 3.1.

15. Please confirm that BEZ's responses to the questions above have been authorised and approved under its published continuous disclosure policy or otherwise by its board or an officer of BEZ with delegated authority from the board to respond to ASX on disclosure matters.

Response to Question 15

BEZ's response to the questions have been authorised and approved by an officer of the Company with delegated authority from the board to respond to ASX on disclosure matters.

Yours sincerely

Michael Higginson
Company Secretary 

James Hamilton
Investor Relations Services, M: +1-416-471-4494

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