The coal resources and coal reserves reported herein are located in the western foothills of Alberta where a stratigraphic sequence of approximately 150 m of Lower Cretaceous non-marine clastic sediments contain seven coal seams ranging in thickness from 7 metres to 1.5 metres. The Company coal leases are within a larger area of economic coal measures known as the Smoky River Coalfield. The deposit is extensively deformed by the compressive tectonics of the Laramide Orogeny, with thrust faulting and folding creating thickened coal zones up to 5 times the stratigraphic thickness of the seams. Fault throw is up to 2000 m, and fold amplitudes are up to 1500 m. Dips range from flat to vertical, with the limbs of major folds being generally deformed by smaller scale parasitic folding and imbricate small scale thrust faulting. Surface resources areas are found within the most severely structured zones, where thickening of the coal seams under compressive tectonic forces is extensive. Underground resource areas are found is less structured areas where flat bottomed synclines, or gentle anticlines with limb dips of less than 25 degrees, lie between the more structured zones. These zones of gently dipping coal measures can be up to 2 km in width and in general do not show extensive structural thickening of the coal seams. Coal quality of the various coal resource areas is well understood from an extensive database of exploration core sampling, exploration adits, and by sampling of ........

CST Coal Canada Limited (CST Coal) commenced mining in the West Extension pit phase of No. 8 Mine in July of 2018 and mined this area in 2 periods from 2018 to until May, 2020, and from November 2021 to now. A Coal Resource and Coal Reserve Statement was completed in-house by CST Coal effective to March 31, 2022, and issued July 12, 2022. With the exception of No. 8 Mine, the 2022 reserve statement is unchanged from a reserve statement covering the CST Coal property prepared by an independent consulting firm, effective December 31, 2017.

During the period since the last reserve statement, the mining operation operated for 12 full months. In this period the mine was not operating at full capacity due to the ramp up in the workforce which was only completed in the first quarter 2023, and the repair of the largest loading unit. The third major excavating units came into operation in July of 2022. Initially in the period there were nine 217 metric tonne haul trucks in the operational fleet. By June 2022 the fleet size had increased to 10 trucks and by October 2022 the fleet size had increased to 12 trucks.

During the period of production since the last reserve and resource statement there were no regulatory impediments to production. An application (Application No. 1942235) to the Alberta Energy Regulator (AER) to modify the pit bottom design and south footwall design of the No. 8 West Extension Syncline pit phase was submitted in late February 2023, and con ........

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