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&lt;p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"&gt;Management has developed a plan to reduce or delay administrative
costs to insure that Excalibur will continue to meet its obligations during the coming year.&lt;/p&gt;

&lt;p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"&gt;&amp;#160;&lt;/p&gt;

&lt;p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"&gt;In 2012, Excalibur entered in to a Management Services Agreement
with Meriden Engineering LLC (Meriden) to perform certain management and consulting services with respect to mine performance and
progress and royalty payment determinations, among others. Meriden has agreed to defer payments under this agreement until such
a time that Excalibur has adequate funds. At May 31, 2013, Meriden was owed $56,844.&lt;/p&gt;

&lt;p style="font: 8pt/115% Calibri, Helvetica, Sans-Serif; margin: 0 0 10pt"&gt;&amp;#160;&lt;/p&gt;



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