Gabriel Resources : 2023 Fourth Quarter Report

Management's Discussion and Analysis

This Management's Discussion and Analysis ("MD&A") provides a commentary to enable a reader to assess material changes in the financial condition and results of operations of Gabriel Resources Ltd. ("Gabriel" or the "Company") and its subsidiary companies (together the "Group") as at, and for the years ended December 31, 2023 and 2022.

The MD&A should be read in conjunction with the audited consolidated financial statements and notes thereto of the Company as at and for the years ended December 31, 2023 and 2022 ("Financial Statements"). The Financial Statements have been prepared in accordance with International Financial Reporting Standards ("IFRS").

All amounts included in the MD&A are in Canadian dollars ("$"), unless otherwise specified. This report is dated as of April 29, 2024 and the Company's public filings can be reviewed on the SEDAR+ website (www.sedarplus.ca).

This MD&A contains forward-looking statements about the Company's objectives, strategies, financial condition, operations and businesses within the Group. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements of the Group (expressed or implied by such forward-looking statements) to be materially different from any future results, performance or achievements. Such forward-looking statements are based upon the beliefs, expectations, reasonable investigation and opinions of management of the Company ("Management") as of the date of this MD&A. All forward-looking statements, including those not specifically identified herein are made subject to the cautionary language beginning on page 29. Readers are advised to refer to the cautionary language when reading any forward-looking statements.

Overview

Gabriel is a Canadian resource company with its common shares ("Common Shares") listed on the TSX Venture Exchange ("Exchange"). Gabriel's activities over many years were focused principally on the exploration, permitting and development of the Roșia Montană gold and silver project in Romania (the "Project"). The Project, one of the largest undeveloped gold deposits in Europe, is situated in an area known as the Golden Quadrilateral in the South Apuseni Mountains of Transylvania, Romania, an historic prolific mining district that has been mined intermittently for over 2,000 years.

The exploitation concession license for the Project ("License") is held by Roșia Montană Gold Corporation S.A. ("RMGC"), a Romanian company in which Gabriel owns an 80.69% equity interest, with the 19.31% balance held by Minvest Roșia Montană S.A. ("Minvest RM"), a Romanian State-owned mining company.

Gabriel invested over US$700 million to develop the Project and to define two valuable mineral deposits at the Rodu-Frasin (epithermal gold and silver) site and Tarniţa (porphyry copper-gold) site, both within the Bucium area located in the vicinity of Roşia Montană ("Bucium Projects") in accordance with all applicable laws, regulations, licenses, and permits.

Management's Discussion & Analysis	1
Fourth Quarter and Full Year 2023

Despite the Group's fulfilment of its legal obligations and its development of the Project as a high- quality, sustainable and environmentally responsible mining project, using best available techniques, the Romanian State blocked and prevented the implementation of the Project and the Bucium Projects, and Gabriel was left with no alternative but to pursue arbitration proceedings against Romania in July 2015. Since that time, the ICSID Arbitration (as defined below) has been the Company's core focus.

Any information set out in this MD&A relating to the Project (including the License), the Bucium Projects and the Group's development activities in Romania is for background purposes only and should not be interpreted as being indicative of the Company's expectations as at the date of this document regarding the future development of the projects.

ICSID Arbitration

On July 21, 2015, Gabriel and its subsidiary company, Gabriel Resources (Jersey) Limited ("Gabirel Jersey", together the "Claimants"), filed a request for arbitration before the World Bank's International Centre for Settlement of Investment Disputes ("ICSID") against the Romanian State ("ICSID Arbitration") seeking compensation for the loss and damage suffered by the them arising from the Romanian State's treatment of the Claimants' investments in Romania in violation of certain bilateral investment protection treaties.

Key milestones in the ICSID Arbitration have been disclosed in Gabriel's prior quarterly and annual filings. Following a legal process conducted over almost nine years, the Claimants and the Romanian State (together "Parties") received a final decision rendered by the presiding arbitral tribunal ("Tribunal") in the ICSID Arbitration proceedings on March 8, 2024 ("Arbitral Decision").

Accordingly, the consolidated financial statements for the year ended December 31, 2023 ("Financial Statements") and this MD&A reflect the principal focus of Gabriel and its subsidiary companies (together the "Group") on the pursuit of the ICSID Arbitration, adjusted as appropriate to reflect the outcome arising from the Arbitral Decision (as described below).

Arbitral Decision

On March 8, 2024, Gabriel announced that the Tribunal had issued a decision dismissing, by a two to one majority, the arbitration claims filed against the Romanian State and had awarded Romania approximately US$10 million to reimburse half of the legal fees and expenses it had incurred in connection with its defence of the ICSID Arbitration ("Costs Order"). The Arbitral Decision is binding on the parties and the amount payable incurs simple interest from the date of the Arbitral Decision at the 3-month US Treasury rate.

The Company subsequently announced that it strongly disagrees with the Tribunal majority's decision, which it believes is at odds with the opinion of the dissenting arbitrator and inconsistent with any objective assessment of the evidence presented. The Company has carefully analyzed the Arbitral Decision with its professional advisers and continues to believe that the Arbitral Decision is deeply flawed and that the Romanian Government's sustained political interference with the Claimants' contractual rights prevented the development of a flagship mining project without any substantive or objective regulatory basis.

Management's Discussion & Analysis	2
Fourth Quarter and Full Year 2023

As Gabriel's shareholders invested hundreds of millions of dollars to deliver a transformational mining project owned in partnership with the State that would have brought significant social and financial benefits to the Romanian people, not only in Roșia Montană but across Romania, Gabriel also believes that Romania, its economy and its citizens, have missed the opportunity to significantly benefit from development of this mining project.

Accordingly, Gabriel is evaluating the possibility of challenging the Arbitral Decision through the annulment process prescribed by the ICSID Convention. An annulment application must be filed within 120 days of the date of the Tribunal's decision and such annulment application will be adjudicated by a new panel of ICSID arbitrators.

The Company also considers that the Costs Order is unjust and inequitable given the manner in which the Tribunal conducted, and the Romanian State approached its defence of, the ICSID Arbitration case, which introduced significant delays to the procedure and aggravated and significantly increased Claimants' costs. The imposition of the Costs Order is also inconsistent with the Tribunal's acknowledgement in the Arbitral Decision that the Claimants presented serious and reasonable claims, none of which were frivolous.

It is to be expected that Romania will take steps to enforce and recover the Costs Order. The Company announced on April 4, 2024 that the Government of Romania has requested the Claimants to settle the Costs Order and noted that they will take action to enforce the same. In this regard, the Romanian State has sought precautionary measures in Romania to impose restrictions on the sale or transfer of the shares held by Gabriel Jersey in RMGC, pending settlement of the Costs Order. The Company believes that these actions are premature and suffer from serious procedural infirmities, Gabriel Jersey and RMGC have submitted complaints before the Romanian courts challenging these measures. Gabriel intends to vigorously defend its rights and interest in Romania and elsewhere.

There can be no assurances that any annulment process pursuant to the ICSID Convention, if instituted, will advance in a customary or predictable manner or be completed or settled within any specific or reasonable period of time. The resources necessary in pursuing such process are substantial and the costs, fees and other expenses and commitments payable in that connection may differ materially from Management's expectations.

In due course, Gabriel anticipates that the Arbitral Decision will be published on the ICSID website following the completion of the redaction process relating to confidential information in accordance with a procedure and timeframe agreed by the parties. A summary of the procedural aspects of the ICSID Arbitration, together with copies of the procedural orders of the Tribunal and the principal submissions, are available on ICSID's website.

Liquidity

Cash and cash equivalents at December 31, 2023 were $4.6 million.

The Company's average monthly cash usage during Q4 2023 was $1.1 million (Q3 2023: $0.8 million), primarily reflecting the consistent level of ongoing operational cost together with increased ICSID Arbitration-related activity quarter on quarter, offset by cash receipts from the exercise of warrants noted in 'Capital Resources' below.

Management's Discussion & Analysis	3
Fourth Quarter and Full Year 2023

At the end of Q4 2023, accruals for costs in respect of ICSID Arbitration-related matters amounted to $4.6 million (Q3 2023: $5.3 million), the decrease reflecting a lower level of activity in pre and post Arbitral Decision strategic initiatives in the quarter, with the continuation of a fee agreement in respect of certain ICSID Arbitration costs incurred before an Arbitral Decision with payment deferred until a period of up to six months after an Arbitral Decision is issued.

Management continues to keep under review the Company's activities in order to identify areas to further rationalize expenditures.

Capital Resources

Warrant Exercise

In December 2023, the Company announced the exercise for cash of 8,290,200 warrants to purchase Common Shares of the Company ("Warrants") at a price of $0.39 per Common Share. The Company received an aggregate consideration of $3.23 million in respect of those Warrants. In addition, 2,823,987 Warrants were exercised on a "Net Exercise" basis and Gabriel issued a further 167,348 Common Shares to settle those Warrants. In aggregate, 8,457,548 Common Shares were issued to settle 11,114,187 Warrants (the "2023 Warrant Exercise").

The Company currently has in issue a further 81,730,233 Warrants each exercisable for cash or on a 'net exercise' basis at $0.645 until expiry in Q3 2024.

Private Placements

On June 8, 2023, the Company completed a non-brokered private placement (the "2023 Private Placement") of 24,782,212 Common Shares at a price of $0.26 per Common Share for gross proceeds of US$4.75 million (approximately $6.4 million) to finance the ongoing costs of the ICSID Arbitration and for general working capital requirements.

On April 26, 2024, the Company announced a non-brokered private placement (the "2024 Private Placement") of 377,594,750 Common Shares at a price of $0.02 per Common Share for gross proceeds of US$5.575 million (approximately $7.5 million). The closing of the 2024 Private Placement is subject to certain conditions, including, but not limited to, the approval of the TSX Venture Exchange ("Exchange") and the receipt of all other applicable approvals and is expected to complete on or about May 23, 2024.The Company will use the proceeds from the 2024 Private Placement to finance the ongoing costs of the ICSID Arbitration and for general working capital requirements.

Future Financing Requirements

Gabriel currently has available funds of approximately C$1.7 million (US$1.25 million) and continues to manage its cash resources and its current and future financial obligations carefully.

Excluding the Costs Order, which may be 'stayed' from enforcement in the period from any annulment application, on the basis of the Company's balance of cash and cash equivalents as at December 31, 2023, and taking into account (i) the assumed closure of the 2024 Private Placement;

1. a fee agreement in respect of the deferral of payment of certain ICSID Arbitration costs; and
2. the deferral of a portion of salary and fees for certain employees and directors (see "Contingent Liabilities" below), the Company believes that it has sufficient cash necessary to fund general working capital requirements together with the material estimated costs associated with advancing the ICSID Arbitration through to the end of November 2024.

Management's Discussion & Analysis	4
Fourth Quarter and Full Year 2023

Notwithstanding the Company's recent and historic funding, there is a risk that sufficient additional financing may not be available to the Company on acceptable terms, or at all. There is no assurance that the Company will be successful in completing the 2024 Private Placement, in which case the Company believes that, excluding the Costs Order, it has sufficient cash to enable the Group to fund general working capital requirements together with the material estimated costs associated with the Company advancing the ICSID Arbitration through to the end of May 2024 and it will seek alternative sources of additional financing. These events and conditions indicate that a material uncertainty exists that may cast significant doubt about the Company's ability to continue as a going concern and therefore the Company may be unable to realize its assets and discharge its liabilities in the normal course of business.

Other Recent Developments

Mineral Tenure Rights

Request for Extension of the Roșia Montană Exploitation License

As described above, RMGC is the titleholder of an exploitation license for the Project. The License, which had an initial duration of 20 years expiring on June 21, 2019, was extended for a further term of five years in June 2019 pursuant to the execution by the NAMR and RMGC of an additional addendum to the License ("Addendum No. 8"). The term of the License, as extended, is due to expire on June 20, 2024. Under Romanian law, RMGC has the right to extend the term of the License for successive subsequent five-year periods as may be needed to ensure rational exploitation of the mineral resources and reserves identified and approved by the Romanian National Agency for Mineral Resources ("NAMR"). RMGC has continued to maintain the License in good standing.

In March 2024, RMGC submitted an application to the NAMR, together with the requisite supporting documentation, requesting an extension of the term of the License for an additional five years, as provided by Romanian law ("License Renewal Application").

In April 2024, a Romanian non-governmental organization initiated a claim in the Cluj Court of Appeal of Romania requesting: (i) the suspension of the June 2019 approval of NAMR that extended the term of the License for a further term of 5 years; (ii) as a subsidiary claim, the suspension of Addendum No. 8; and (iii) as a tertiary claim, the suspension of the ongoing proceedings before the NAMR relating to the License Renewal Application. The joint respondents in this claim are the NAMR and RMGC. A first hearing of this claim has been scheduled for May 9, 2024. The Company and RMGC intend to vigorously defend this claim, which they consider is unmeritorious.

Bucium Projects

Following the completion of exploration works at Bucium which identified two feasible deposits, the Rodu-Frasin and Tarniţa deposits, RMGC acquired an exclusive right under Romanian law to obtain exploitation licenses for the discovered mineral resources. Accordingly, in October 2007, RMGC applied to the NAMR for exploitation licenses to develop and exploit the Rodu-Frasin and Tarniţa ("Bucium Applications"). The NAMR has failed to act on the Bucium Applications for over 16 years despite being legally obliged to do so.

Management's Discussion & Analysis	5
Fourth Quarter and Full Year 2023

RMGC has recently urged NAMR to issue the exploitation licenses for the two Bucium Projects in accordance with the Bucium Applications. Throughout the ICSID Arbitration, the Romanian State has consistently maintained a position, relied upon by the majority in the Arbitral Decision, that the Bucium Applications remain pending before the NAMR.

RMGC - Government Audits and Investigations

Since the filing of the ICSID Arbitration, RMGC has been subjected to several Value Added Tax ("VAT") audits and other investigations by the Romanian National Agency for Fiscal Administration ("ANAF"), an agency of the Romanian Ministry of Finance, the Ministry charged with Romania's defense of the ICSID Arbitration. The timing, scope and manner of implementation of these audits and investigations are, in the view of Gabriel and RMGC, excessive and retaliatory to the Company's pursuit of the ICSID Arbitration.

Prosecutor Office and ANAF Investigation

In November 2013, RMGC was informed of an investigation by the Ploiesti Public Prosecutor's Office into the principals/key shareholders of a group of companies known as the "Kadok Group". The public prosecutor subsequently extended the investigation of the Kadok Group to other companies, including RMGC which had had a short-term commercial relationship with the Kadok Group in 2012.

In 2015, less than two months after Gabriel filed its Request for Arbitration against Romania, the public prosecutor mobilized a directorate of ANAF to pursue an investigation of RMGC that has continued for over eight years as of the date of this MD&A.

In March 2020, RMGC was informed that the authorities had closed the file in relation to the commercial relationship between RMGC and the Kadok Group but that another prosecutor's office would continue an investigation of the commercial relations between RMGC and a list of service providers.

The ad hoc investigations pursued by ANAF over the past eight years has covered a broad range of operational activities and transactions of RMGC, and several of its suppliers, consultants, and advisors, covering an extensive period spanning 1997 to 2023.

The investigation remains active and ongoing and the most recent developments include:

• On December 21, 2022, a division of ANAF issued a findings report in respect of 7 suppliers of RMGC (~$41m of transactions investigated) that concluded that RMGC should not have deducted for fiscal purposes a total expenditure of ~$29m (from 2007 to 2015) and related VAT of ~$6.7m.
• On December 28, 2022, a division of ANAF issued a findings report in respect of 9 suppliers of RMGC (~$26m of transactions investigated) that concluded that RMGC should not have deducted for fiscal purposes a total expenditure of ~$7m and related VAT of ~$1.6m.
• On March 10, 2023, a division of ANAF issued a findings report in respect of 35 suppliers of RMGC (~$90m of transactions investigated) that identified ~$19m of findings against RMGC (an expenditure of ~$11m that RMGC should not have been deducted for fiscal purpose with ~$2.7m related VAT, ~$4.2m of VAT adjustments and VAT for uninvoiced services and ~$0.6m of additional labor taxes for services requalified to labor).

Management's Discussion & Analysis	6
Fourth Quarter and Full Year 2023

Of this amount, ANAF concluded that expenditure of ~$14.6m was allegedly incurred for purposes not directly related to carrying out RMGC's object of activity.

• On January 12, 2024, a division of ANAF issued a findings report in respect of 14 suppliers of RMGC (~$82m of transactions investigated) that concluded that RMGC should not have deducted for fiscal purposes a total expenditure of ~$3.9m and related VAT of ~$0.9m. ANAF concluded that the amount was allegedly incurred for purposes not directly related to carrying out RMGC's object of activity.

RMGC (together with its professional advisers) has filed substantive written rebuttal submissions in response to all of the above-noted findings reports, identifying, amongst other things, the multiple errors and inaccuracies in such reports; the fact that the audit investigations were carried out by a department of ANAF that did not have legal attribution to perform the matter; that the conclusions of the findings' reports contradict the conclusions of multiple prior fiscal audits undertaken in respect of RMGC and disregard Romanian legislation, European jurisprudence and prior decisions of the Romanian Supreme Court; and that the investigations undertaken by ANAF are retaliatory actions in response to the pursuit by the Claimants of the ICSID Arbitration claim.

Gabriel and RMGC will continue to vigorously challenge and contest the continuing abusive investigations by ANAF and the flawed findings reports.

Russia-Ukraine Conflict

Given, amongst other things, the geographical proximity of Romania to Ukraine, Gabriel is closely monitoring the situation in Ukraine with concern for all those who are impacted by the unfolding conflict and humanitarian crisis.

At this time, Gabriel has not experienced any material disruption to its operations, including its limited activities in Romania, as a consequence of the Russia-Ukraine conflict and the Group will continue to operate its business in accordance with the circumstances that arise. However, there is no guarantee that the current geo-political situation and the resulting economic developments will not adversely affect the Group's operations and financial condition in the future - this will depend on future developments that are highly uncertain. Gabriel will continue to monitor the situation, including any developments that could potentially impact on the Group's business and results of operations and make every effort to minimize any negative impact on those operations.

Outlook

The Company's current plans for the following year are as follows:

• the advancement of the ICSID Arbitration, review of the Arbitral Decision and undertaking actions to progress Gabriel's position in any annulment process;
• seeking additional funding and carefully managing its cash resources; and
• the protection of its rights and interests in Romania (including, so far as reasonably practical and desirable, ensuring that existing licenses and permits remain in good standing).

Management's Discussion & Analysis	7
Fourth Quarter and Full Year 2023

Annual Summary

The annual summary is set out in the following table. The amounts are derived from the Financial Statements prepared under IFRS.

in thousands of Canadian dollars, except per share amounts	2023	2022	2021
Operating loss	24,499	9,331	14,539
Other (income) / expenses	(49)	(1,593)	5,360
Loss - attributable to owners of the parent	24,936	7,738	19,899
Loss per share (basic and diluted)	0.02	0.01	0.02
Total assets	5,203	6,935	6,792
Total liabilities	20,710	7,646	6,691
Net cash-in-flows from financing activities	9,622	7,028	7,210

Results of Operations

Operating loss in 2023 was $24.5 million, $15.2 million higher than in 2022 ($9.3 million) with the increase arising from the following main factors:

• The Costs Order of $13.8 million, recognized in 2023.
• As described in the "Expenses" section below:

1. 2023 corporate, general and administrative costs of $10.7 million were $2.2 million higher than 2022, including $1.3 million higher costs related to the ongoing ICSID Arbitration, $0.4 million higher finance, audit, accounting and compliance costs and $0.2 million higher payroll costs.

1. stock-basedcompensation was less than $0.1 million in 2023 compared to $0.8 million in 2022.

The movement in "Other (income) /expenses" between 2023 and 2022, in aggregate $2.0 million, has arisen due to the following:

• A gain of $1.4 million was recognized in respect of the sale of the Recea Land in 2022;
• A doubtful debt expense recognized against the TBL loan; and
• Exchange losses of $0.1 million were recognized in 2023 (compared to a 2022 gain of $0.1million).

Total Assets

Total assets decreased by $1.7 million in 2023 from 2022, primarily reflecting (i) the utilization of $10.6 million of cash to fund the Group's 2023 activities, offset by net aggregate cash inflows after issue costs of $9.7 million from financing activities described below; (ii) the doubtful debt expense recognized against the TBL loan and (iii) a $0.2m reduction in prepaid expenses/other receivables.

Management's Discussion & Analysis	8
Fourth Quarter and Full Year 2023

Total Liabilities

In 2023 total liabilities were $20.7 million, an increase of $13.0 million from 2022, comprised predominantly of the Costs Order described above, the year on year revaluation of the DSU liability resulting from the higher share price at December 31, 2023 and offset by the reduction in the overall number of outstanding DSUs following a partial cash / partial share redemption in July 2023..

Net Cash In-Flows from Financing Activities

Cash flows from financing activities in 2023 reflect the proceeds after issue costs of $6.4 million from the 2023 Private Placement and $3.2 million from the 2023 Warrant Exercise. Cash flows from financing activities in 2022 reflect private placement proceeds after issue costs of $7.0 million.

Results of Operations

The results of operations are summarized in the following tables. The amounts are derived from the Financial Statements prepared under IAS 34.

in thousands of Canadian dollars, except per share amounts	2023 Q4	2023 Q3	2023 Q2	2023 Q1
Income Statement
Loss - attributable to owners of parent	16,888	3,365	2,646	2,037
Loss per share - basic and diluted	-	-	-	-
Statement of Financial Position
Working capital	4,925	(2,584)	223	(3,516)
Total assets	5,203	5,855	8,366	5,169
Statement of Cash Flows
Net cash-in-flows from financing activities	3,232	-	6,390	-

in thousands of Canadian dollars, except per share amounts	2022 Q4	2022 Q3	2022 Q2	2022 Q1
Income Statement
Loss - attributable to owners of parent	2,639	1,421	2,801	877
Loss per share - basic and diluted	0.00	0.00	0.01	0.00
Statement of Financial Position
Working capital	(1,486)	(924)	685	(3,601)
Total assets	6,935	10,925	12,332	6,283
Statement of Cash Flows
Net cash-in-flows from financing activities	-	-	7,028	-

Management's Discussion & Analysis	9
Fourth Quarter and Full Year 2023

Review of Financial Results

	3 months ended December 31	12 months ended December 31
in thousands of Canadian dollars, except per share	2023	2022	2023	2022
Operating loss for the period	16,505	2,763	24,499	9,331
Loss for the period
- attributable to owners of parent(1)	16,888	2,639	24,936	7,738
Loss per share - basic and diluted	0.02	-	0.02	0.01

1. The transfer by the Company of equity in RMGC to Minvest RM during Q1 2014 resulted in the presentation of a non-controlling interest, as set out in the Financial Statements.

Operating and overall loss for the 12 months ended December 31 in 2023 and 2022 are described in the Annual Summary section above.

After taking into account the Costs Order and doubtful debt expense described above, operating loss for the three-month period ended December 31, 2023 of $2.7 million was the same as the corresponding period in 2022 primarily reflecting $0.6 million higher corporate general and administrative expenses, explained further below and offset by a $0.6 million lower share based compensation charge.

Similarly, after taking into account the Costs Order and doubtful debt expense, the overall loss for the three-month period ended December 31, 2023 was $2.6 million, compared to $2.6 million in the corresponding period in 2022.

Expenses

Corporate, General and Administrative

	3 months ended December 31	12 months ended December 31
in thousands of Canadian dollars	2023	2022	2023	2022
Payroll	888	857	3,478	3,324
ICSID Arbitration related	715	393	2,724	1,426
Finance, audit, accounting and compliance	412	326	1,478	1,032
Property taxes	189	166	740	645
Project obligations and community relations	180	146	637	582
Travel and transportation	184	139	438	399
Legal	77	14	319	261
Information technology	70	73	273	271
Office rental and utilities	56	60	194	213
External communications	6	6	32	23
Other	27	8	405	344
Corporate, general and administrative expense	2,804	2,188	10,718	8,520

All operating expenditures incurred by the Group are included in corporate, general and administrative expenses.

Payroll is the total of cash-based director fees and salaries and relevant taxes for all Group employees or in-house contractors in Romania. The year-on-year increase from 2022 to 2023 is primarily a reflection of the move to full cash fees for directors from Q2 2022, increased holiday cost provision in Romania and the impact of a stronger Romanian currency in which a large proportion of payroll costs is paid.

Management's Discussion & Analysis	10
Fourth Quarter and Full Year 2023