Mandalay Resources Corp News - MND

Mandalay Resources Corporation Announces Production and Sales Results for the Third Quarter of 2019 and Revised Full-Year 2019 Guidance
T.MND |
TORONTO, Oct. 17, 2019 (GLOBE NEWSWIRE) --

Mandalay Resources Corporation ("Mandalay" or the "Company") (TSX: MND, OTCQB: MNDJF) announced today its production and sales results for the third quarter of 2019.

In the third quarter of 2019, Mandalay produced 16,625 saleable ounces of gold equivalent and sold 17,814 ounces of gold equivalent.

Dominic Duffy, President and Chief Executive Officer of Mandalay, commented, “Mandalay’s production was lower than forecast over the third quarter of this year as a result of Costerfield’s underperformance in the Brunswick lode, whilst Björkdal continued its dependable performance of 11,888 ounces of saleable gold produced.”

Mr. Duffy continued, “At Björkdal, production continued in line with expectations, while mining at the open pit was paused at the end of July. We anticipate an increase in production in the fourth quarter as we recommence the mining of a higher-grade skarn zone, after infill drilling was carried out during the third quarter. In addition, we plan to increase the production rate from the Aurora zone as more levels are developed. We remain on target to achieve full-year guidance at Björkdal.”

Mr. Duffy continued, “At Costerfield, we produced 3,103 ounces of saleable gold and 402 tonnes of saleable antimony, as persisting poor ground conditions in the Brunswick lode limited the production rate and lowered the grade due to significant dilution from overbreak. The metallurgy of the ore has also been problematic with significantly lower than planned gold recoveries for the quarter, although antimony recoveries were as planned. With Youle production gradually coming online in the fourth quarter, we anticipate an increase in production compared to the third quarter as there will be less Brunswick ore through the mill. Furthermore, an initial test of approximately 1,600 tonnes of Youle development ore was processed through the mill with early indications showing comparable, if not better than, recoveries seen in the previously mined Cuffley lode.”

Mr. Duffy continued, “Despite the positive developments we expect at both sites during the fourth quarter and beyond, the aforementioned production and recovery issues related to the Brunswick deposit will require an update to our 2019 production and unit costs. We have not increased our total operational cost at both sites, although due to the significant drop in production forecast from Costerfield, expected cash costs and all-in costs at the Costerfield mine, and therefore on a consolidated basis, have been increased. Separately, due to lower than expected capital spend for the year, the upper limit of capital guidance at both operating sites have been lowered by US$2 million. Details are shown further below in this press release.”

Mr. Duffy continued, “The poor gold recoveries and lower grades due to dilution in the Brunswick lode are expected to continue to impact Costerfield’s production for the first six months of 2020. However, as the Youle lode ramps up this becomes less relevant and from the third quarter of 2020, it is anticipated that the Youle lode will be the sole feed source for the Costerfield mine.”

Mr. Duffy concluded, “Mandalay fully anticipates Costerfield to be revitalized with the ramp up at Youle which we expect to generate positive momentum into 2020. At Björkdal, the Company intends to build on its third quarter production and focus on targeting higher-grade underground skarn material and ramping up Aurora production for increased overall gold production.”

Saleable production for the quarter ended September 30, 2019:

In the third quarter of 2019, the Company produced a total of 14,983 ounces of gold and 402 tonnes of antimony, representing a total of 16,625 ounces of gold equivalent, versus 13,442 ounces of gold and 505 tonnes of antimony in the third quarter of 2018, representing a total of 16,874 ounces of gold equivalent.

Production at Björkdal was 11,880 ounces of gold in the third quarter of 2019, as compared to 8,504 ounces of gold in the third quarter of 2018.

Production at Costerfield was 3,103 ounces of gold and 402 tonnes of antimony in the third quarter of 2019, versus 4,938 ounces gold and 505 tonnes antimony in the third quarter of 2018.
Saleable production for the nine months ended September 30, 2019:

The Company produced a total of 51,017 ounces gold and 1,348 tonnes antimony, representing a total of 58,065 ounces of gold equivalent production, versus 51,899 ounces gold and 1,613 tonnes of antimony in the corresponding nine months of 2018, representing a total of 62,395 ounces of gold equivalent.

Production at Björkdal was 40,508 ounces gold.

Production at Costerfield was 10,509 ounces gold and 1,348 tonnes antimony.
Table 1 – Third Quarter and Nine Month Saleable Production for 2019 and 2018

Metal Source Three months
ended
September 30
2019 Three months
ended
September 30
2018 Nine months
ended
September 30
2019 Nine months
ended
September 30
2018
Gold (oz) Björkdal 11,880 8,504 40,508 35,237
Costerfield 3,103 4,938 10,509 16,662
Total 14,983 13,442 51,017 51,899
Antimony (t) Costerfield 402 505 1,348 1,613
Average quarterly prices:
Gold US$/oz 1,473 1,213
Antimony US$/t 6,015 8,252
Au Eq.(1) (oz) Björkdal 11,880 8,504 40,508 35,237
Costerfield 4,745 8,370 17,557 27,158
Total 16,625 16,874 58,065 62,395
Quarterly gold equivalent ounces (“Au Eq. oz”) produced is calculated by multiplying the saleable quantities of gold (“Au”), and antimony (“Sb”) in the period by the respective average market prices of the commodities in the period, adding the two amounts to get a “total contained value based on market price”, and then dividing that total contained value by the average market price of Au in the period. Average Au price in the period is calculated as the average of the daily LME PM fixes in the period, with price on weekend days and holidays taken of the last business day; average Sb price in the period is calculated as the average of the daily average of the high and low Rotterdam warehouse prices for all days in the period, with price on weekend days and holidays taken from the last business day. The source for all prices is www.metalbulletin.com.
Sales for the third quarter ended September 30, 2019:

In the third quarter of 2019, the Company sold a total of 16,132 ounces of gold and 412 tonnes of antimony, representing a total of 17,814 ounces of gold equivalent, versus 15,144 ounces of gold and 486 tonnes of antimony in the third quarter of 2018, representing a total of 18,450 ounces of gold equivalent.

Björkdal sold 13,006 ounces of gold in the third quarter of 2019, versus 10,400 ounces of gold in the third quarter of 2018.

Costerfield sold 3,126 ounces of gold and 412 tonnes of antimony in the third quarter of 2019, versus 4,744 ounces of gold and 486 tonnes of antimony in the third quarter of 2018.
Sales for the nine months ended September 30, 2019:

The Company sold 53,750 ounces gold and 1,361 tonnes antimony, representing a total of 60,815 ounces of gold equivalent, versus 58,448 ounces gold and 1,725 tonnes antimony in the third quarter of 2018, representing a total of 69,650 ounces of gold equivalent.

Björkdal sold 43,160 ounces gold.

Costerfield sold 10,590 ounces gold and 1,361 tonnes antimony.
Table 2 – Third Quarter and Nine Month Sales for 2019 and 2018

Metal Source Three months
ended
September 30
2019 Three months
ended
September 30
2018 Nine months
ended
September 30
2019 Nine months
ended
September 30
2018
Gold (oz) Björkdal 13,006 10,400 43,160 40,505
Costerfield 3,126 4,744 10,590 17,943
Total 16,132 15,144 53,750 58,448
Antimony (t) Costerfield 412 486 1,361 1,725
Average quarterly prices:
Gold US$/oz 1,473 1,213
Antimony US$/t 6,015 8,252
Au Eq. (1) (oz) Björkdal 13,006 10,400 43,160 40,505
Costerfield 4,808 8,050 17,655 29,145
Total 17,814 18,450 60,815 69,650
Quarterly Au Eq. oz sold is calculated by multiplying the saleable quantities of Au, and Sb in the period by the respective average market prices of the commodities in the period, adding the two amounts to get a “total contained value based on market price”, and then dividing that total contained value by the average market price of Au for the period. The source for all prices is www.metalbulletin.com with price on weekend days and holidays taken of the last business day.
Mandalay’s updated guidance for 2019 production, cash costs, all-in costs and capital expenditures is set out below together with the original guidance amounts. In addition to the factors noted above, the revised guidance reflects updated metal prices as there has been a significant decline in the price of antimony, and a significant increase in the price of gold since the initial announcement of the original guidance on January 16, 2019. These changes negatively impact projected consolidated gold equivalent production relative to the original guidance. As a result, the tables below present (i) revised 2019 guidance reflecting assumed metal prices of Au$1,396/oz and Sb$6,682/t, (ii) 2019 guidance as originally presented (based on the metal prices of Au$1,200/oz and Sb$8,200/t), and (iii) the original 2019 guidance adjusted to reflect assumed metal prices of Au$1,396/oz and Sb$6,682/t.

Table 3 – Revised 2019 Full-Year Guidance

2019E
Björkdal
Gold produced (oz) 50,000 – 56,000
Cash cost(1) per oz gold produced $800 – $950
All-in cost(1) per oz gold produced $1,030 – $1,180
Capital expenditures $18M – $20M
Costerfield
Gold produced (oz) 13,000 – 17,000
Antimony produced (t) 2,000 – 2,300
Gold equivalent(2) (oz) 23,000 – 28,000
Cash cost(1) per oz gold eq. produced $1,300 – $1,450
All-in cost(1) per oz gold eq. produced $1,700 – $1,850
Capital expenditures $21M – $23M
Consolidated
Gold equivalent(2) produced (oz) 72,000 – 84,000
Average cash cost(3) per oz gold eq. $975 – $1,125
Average all-in cost(3) per oz gold eq. $1,325 – $1,500
Capital expenditures $39M – $43M
Cash cost and all-in cost are non-IFRS measures. See “Non-IFRS Measures” at the end of this press release.
Assumes metal prices of: Au $1,396/oz, Sb $6,682/t
Consolidated costs per Au Eq. oz includes corporate overhead spending and total care and maintenance costs at Cerro Bayo.
Table 4 – Original 2019 Full-Year Guidance

2019E
Björkdal
Gold produced (oz) 50,000 – 56,000
Cash cost(1) per oz gold produced $800 – $950
All-in cost(1) per oz gold produced $1,030 – $1,180
Capital expenditures $18M – $22M
Costerfield
Gold produced (oz) 23,000 – 30,000
Antimony produced (t) 2,600 – 3,100
Gold equivalent produced(2) (oz) – revised prices 35,000 – 45,000
Gold equivalent produced(3) (oz) 41,000 – 51,000
Cash cost(1,3) per oz gold eq. produced $790 – $920
All-in cost(1,3) per oz gold eq. produced $1,050 – $1,180
Capital expenditures $21M – $25M
Consolidated
Gold equivalent produced(2) (oz) – revised prices 85,000 – 101,000
Gold equivalent produced(3) (oz) 91,000 – 107,000
Average cash cost(3,4) per oz gold eq. $850 – $980
Average all-in cost(3,4) per oz gold eq. $1,130 – $1,280
Capital expenditures $39M – $47M
Cash cost and all-in cost are non-IFRS measures. See “Non-IFRS Measures” at the end of this press release.
Assumes metal prices of: Au $1,396/oz, Sb $6,682/t
Original metal prices used in the January 16, 2019 press release were Au $1,200/oz, Sb $8,200/t
Consolidated costs per Au Eq. oz includes corporate overhead spending and total care and maintenance costs at Cerro Bayo
For Further Information:

Dominic Duffy
President and Chief Executive Officer

Edison Nguyen
Manager, Analytics and Investor Relations

Contact:
647.260.1566

About Mandalay Resources Corporation:

Mandalay Resources is a Canadian-based natural resource company with producing assets in Australia and Sweden, and care and maintenance and development projects in Chile. The Company is focused on growing production at its gold and antimony operation in Australia, and gold production from its operation in Sweden to generate near-term cash flow.

Forward-Looking Statements:

This news release contains "forward-looking statements" within the meaning of applicable securities laws, including statements regarding the Company’s production of gold and antimony for the 2019 fiscal year. Readers are cautioned not to place undue reliance on forward-looking statements. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, changes in commodity prices and general market and economic conditions. The factors identified above are not intended to represent a complete list of the factors that could affect Mandalay. A description of additional risks that could result in actual results and developments differing from those contemplated by forward-looking statements in this news release can be found under the heading “Risk Factors” in Mandalay’s annual information form dated March 28, 2019, a copy of which is available under Mandalay’s profile at www.sedar.com. In addition, there can be no assurance that any inferred resources that are discovered as a result of additional drilling will ever be upgraded to proven or probable reserves. Although Mandalay has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.

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Mandalay Resources Corporation Provides Exploration Update
T.MND
TORONTO, Sept. 30, 2019 (GLOBE NEWSWIRE) --

Mandalay Resources Corporation ("Mandalay" or the "Company") (TSX: MND, OTCQB: MNDJF) is pleased to present an update on the continuing exploration programs at its Costerfield operation in Victoria, Australia, as well as its Björkdal operation in Sweden.
The Company is also pleased to report additional diamond drilling results from both operations based on drilling that was carried out since the Company’s last exploration release on June 18, 2019.
Readers are advised to review the corresponding figures found at the end of this press release.

Exploration Update Highlights

Costerfield

Youle northern extensional drilling met with early success
Potential for further discovery at Costerfield with target test drilling from surface at MacDonald
First hole of Costerfield deep drilling completed at 1,700 metres (“m”). Program has advanced knowledge of the structural framework of the Costerfield mineral district. Commenced a shallower daughter hole allowing for exploration target testing
Björkdal

Aurora zone open to extension. Assay results continue to grow the potential resource
Drill results at newly discovered Lake Zone skarn deposit demonstrated that the skarn geology is continuing deeper.
Mandalay’s drilling programs have continued to yield encouraging results at both Costerfield and Björkdal operations. At Costerfield, the Company is testing extensions to the Youle orebody, (see table 1) and has completed the first hole of a deep drilling program under the known Costerfield mineralized system, in search of high-grade mineralization at depth. At Björkdal, the Company is testing up-dip and down-dip extensions to the Aurora mineralization and is also testing the down-dip extension of the newly discovered high-grade skarn at Lake zone (see tables 2, 3, 4, and 5).

Dominic Duffy, President and CEO of Mandalay, commented; “Recent drilling results at Costerfield and Björkdal continue to demonstrate the significant upside value potential of our operations.”

“At Costerfield, further testing of the northern extension of the high-grade Youle deposit is strengthening our confidence of grade continuity within the Inferred Resources. Additionally, drilling further north of the Youle line of lode resulted in the identification of continuous mineralization through a low-grade zone, along with indications of a higher-grade zone of antimony and gold concentration approximately 200 metres away from the existing Youle Inferred Resources at a target known as MacDonald.”

Mr. Duffy continued, “We are now well underway with phase 1 of our deep drilling program at Costerfield. The first deep hole was completed at a depth of 1,700 metres and has provided valuable structural information below the Costerfield and Youle deposits. One high potential target has already been generated further up-dip as a result of this first hole. A daughter hole will now be wedged off the parent hole to test this target. Multi-element geochemical assaying of core drilled through potential fluid conduits is currently underway, with geochemical vectoring techniques to be applied once the analysis is complete.”

Mr. Duffy concluded, “At Björkdal, drilling at the Aurora zone was not able to commence until May 2019. However, results demonstrated that Aurora is still open both vertically and along strike. Lastly, we commenced testing the down-dip extension of the newly discovered Lake Zone skarn deposit. Results to date, show that the skarn geology continues deeper, but further assay results are required before assessing to what depth this deposit economically extends.”

Mandalay Drilling Programs

Costerfield Drilling Programs

Mandalay continues its two exploration programs commenced in May 2019.

Youle Extension Drilling Program

The focus of the Youle extension program has been to delineate a complex high-grade zone to the north, expanding on the early success of the program reported in June 2019.

With the use of regional modelling, historic research, and structural information gained from the second quarter of 2019 drilling program, an additional package of gold and antimony concentration was interpreted to exist as a target north of a low-grade zone along the structural trend of Youle and the Main Costerfield mine. As a result, the Youle extension drilling was re-designed to prioritize drill testing of this zone and has met with initial success (refer to Drilling Results, Figure 1 and Table 1 for details).

This “shoot repetition” has now been observed multiple times through the district, most notably in the Cuffley, Brunswick and Augusta Deposits.

Costerfield Deep Drilling Program

As Mandalay continues to increase momentum within the Youle expansion program, it also advances deep targeted testing of the Costerfield line of lode following Mandalay’s developing understanding of gold enrichment environments. The first hole of this two-hole program with secondary wedge holes, has been completed at a depth of 1,700 m. This first hole was designed to investigate the deep environment at the northern end of the current mine area, below the historical Costerfield mine and the currently active Youle lode.

Björkdal Drilling Programs

Underground extensional and production drilling during 2019 has continued to focus on the high-grade mineralization recently discovered at Björkdal (i.e., Aurora Zone and Lake Zone skarn).
Both these horizons provide the Company with the potential to mine high-tonnage and higher-grade ore more cost effectively over the upcoming years.

Aurora Drilling Program

Underground drilling focused on extending the existing Aurora zone. Results to date confirm the potential for Aurora to be extended both up and down dip and along strike in both directions. Although drilling the upper section of Aurora has encountered problems due to the difficult nature of drilling positive gradient diamond drill holes, with several holes having to be abandoned when intercepting major faults before intercepting the Aurora zone. As a result, the focus of Aurora drilling has been changed to the deeper holes seeking to extend the higher-grade mineralization at depth. The upper holes will now be drilled from surface in later 2019 or early 2020. The zone is currently being mined on five active levels.

Lake Zone Skarn Program

The recognition of skarn related mineralization at Björkdal during 2018 is of interest due to its anomalously high grade. Seven diamond drill holes have recently been drilled with the aim to define the down dip extension of the mineralized body. These drill holes have demonstrated the continuation of the skarnified horizon further to the north and at depth.

Mandalay Drilling Results

Costerfield Drilling Results

Youle Extension Drilling Program

Drill hole BC071 has been completed, targeting the multiple veins that make up the northern high-grade area of Youle. This hole intercepted multiple parallel veins, with the most significant being 18.4 g/t gold (“Au”) and 5.7% antimony (“Sb”) over a true width of 0.24 m.

Other recent drilling within the program focused on testing for a northern continuation of mineralization. The structure that hosts the majority of Youle mineralization was intercepted in BC067AW1, BC067AW2 and BC070 with the structure being enriched in gold and antimony in all 3 intercepts.

Historic research, together with field mapping and LiDAR (light imaging, detection, and ranging) analysis has identified substantial workings along the line of the historic Costerfield mine to the north. From our understanding of the other mineralized packages in the district, a steeply plunging low-grade zone occurring between these workings and the Costerfield mine is likely, and fits with observations and inferences of bedding and faulting interactions to the north of Youle and Costerfield. From these findings a highly prospective zone now exists north of Costerfield mine, being the MacDonald target.

BC075 intercepted two mineralized zones. A gold and antimony bearing laminated quartz vein (0.42 m @ 7.2 g/t Au & 4.4% Sb), which is spatially associated with the historic workings, and additional quartz-stibnite veining (0.45 m @ 1.3 g/t Au & 7.3% Sb composite of multiple veins) approximately 80 m to the east of the initial intercept. These results support the northern enrichment model and excitingly indicate a potential for multiple veining and mining fronts.

Table 1: Youle Drilling Results (June 2019 – September 2019)

Hole ID Hole Completion Date Total hole Depth Intercept Easting (Mine Grid) Intercept Northing (Mine Grid) Intercept Elevation (Mine Grid) Drilled Width (m) True Width (m) Au Grade (g/t) Sb Grade (%) AuEq (g/t) over min. 1.8m
mining width
BC067AW1 4/07/2019 531.2 15441 7251 817 0.09 0.07 8.7 19.8 1.4
BC067AW2 17/07/2019 518.9 15406 7235 799 0.08 0.07 5.3 8.6 0.7
BC069 27/06/2019 699.6 No Significant Intercept
BC070 9/08/2019 734.8 15442 7350 747 0.31 0.22 0.8 0.5 0.2
BC071 5/08/2019 492.1 15392 7156 849 0.55 0.26 18.4 5.7 3.9
BC071 5/08/2019 492.1 15389 7156 854 0.28 0.20 2.1 3.4 0.8
BC075 10/09/2019 357.5 15521 7439 1122 0.51 0.42 7.2 4.4 3.2
BC075 10/09/2019 357.5 15608 7356 1048 0.52 0.45 1.3 7.3 3.1
Note:
- Assumes metal prices of: Au$1,450/ oz and Sb$7,000/ t
- AuEq (g/t) = Au (g) + Sb (%) x [Price per 10 Sb (kg) x Sb Recovery (%) / Price per 1 Au (g) x Au Recovery (%)]

Costerfield Deep Drilling Program

The upper majority of the first hole in this program (CD001) found a geological environment consistent with our current understanding; a west-dipping sequence of Upper Costerfield Formation siltstones passing into the turbidites and mudstones of the Lower Costerfield Formation. As anticipated by the geological model, a sequence of dark, carbon-rich turbidites and sandstones inferred to be favorable to high-grade gold mineralization was passed through between 904 – 995 m, which included quartz veining with anomalous gold values (up to 0.7 g/t Au) and minor visible stibnite mineralization (up to 0.01% Sb).

At a downhole depth of 1,015 m, a west-dipping fault containing laminated quartz with significant apparent thrust offset was intercepted (Figure 2). Below this fault, folded but predominantly east-dipping turbidites, giving way to siltstones disrupted by apparent strike-slip faulting was encountered. A large fault between 1,545 and 1,555 m marked a transition into dark-coloured, east-dipping slaty turbidites which displayed abundant irregular quartz veining leading up to a thick quartz blow between 1,583 – 1,595 m. This wide interval of quartz contained minor pyrite mineralization and zones of sericite-chlorite alteration.

Stratigraphic correlations between the Youle mine area, and the first 1,000 m of CD001 infer the existence of an anticlinal environment or thrust ramp in the area between, which presents a compelling target for Costerfield-style mineralization down-dip of the known Youle lode. This environment is additionally, likely to be coincident with the occurrence of the dark carbon-rich sandstones which enhance the potential for high-grade gold mineralization.

Trace-level analysis assays have been returned for the core down to a depth of 1,040 m, which display strong positive correlation between gold, antimony and arsenic (Figure 3). Of importance is a wide zone of enrichment of these elements, approximately between 975 – 1,040 m downhole, which appears to be centered on the large fault at 1,015 m. Additionally, silver (“Ag”) shows a strong relative enrichment in this zone on the footwall of the fault. Subsequent hyperspectral logging of CD001 has additionally brought to light a wide envelope of muscovite alteration surrounding this fault, mirroring the elevated assays. Muscovite alteration of wall rock white micas is a common feature of central Victorian gold deposits, and the coincidence of muscovite alteration and gold-antimony-arsenic enrichment here is interpreted as evidence of the large fault acting as an active conduit or feeder zone for ore-forming hydrothermal fluids. Assays from CD001 have been added to Mandalay’s regional multi-element geochemical database, which integrates exploration drill core, regolith and bedrock assays to fingerprint mineralized systems and lithological packages in the Costerfield area. The information contained within the database is constantly updated and used to refine exploration models which assist in the generation and testing of new mineralization targets.

The environment passed through in the latter 660 m of CD001 can be interpreted as the disrupted eastern limb of a regional-scale anticline, the thrust-offset crest of which hosts the Costerfield mine. This deep, capped-off eastern limb is in a similar structural position to the sub King Cobra mineralization at Augusta which contains some exceptionally high-grade gold assays. The steeply dipping fault at 1,545 m is interpreted to be analogous to the Lyre Fault which appears to be significant to setting up the sub King Cobra mineralized environment. Initial assays through this zone show anomalous gold and antimony however the method of analysis used, is designed for ore grade analysis and is not accurate at trace ranges.

The next hole in this program, CD001W1, has commenced wedging off CD001 at a depth of 400 m to investigate the carbonaceous sandstones near to their inferred culmination above the 1,015 m fault, and the environment immediately below (See Figure 2).

Björkdal Drilling Results

Since the Company’s last exploration press release on June 18, 2019, the Company has assayed 20 drill holes at the Aurora zone at Björkdal (see tables 4) and 4 drill holes at its Lake Zone skarn deposit (see table 5). Recent highlights from the Aurora and Lake Zone skarn assays include the following intercepts:

Table 2: Aurora Drilling Highlights

Hole ID True Width Au g/t
DOD2019-058 2.93 7.80
DOD2019-076 3.34 5.37
DOD2019-077 2.51 7.24
DOD2019-078 6.03 2.78
DOD2019-079 3.50 6.99
Table 3: Lake Zone Skarn Drilling Highlights

Hole ID True Width Au g/t
MU9-009A 0.65 23.77
MU9-014 1.65 14.31
Table 4: Aurora Drilling Results (June 2019 – September 2019)

Hole ID Hole Completion Date Intercept
Northing
(Mine Grid) Intercept
Easting
(Mine Grid) Intercept
Elevation
(Mine Grid) From (m) To
(m) Drilled
Width
(m) True Width (m) Au (g/t) Au (g/t) over min. 3 m mining width
DOD2019-052 06/07/2019 1755.778 1126.208 -402.341 120.2 125 4.8 4.45 0.74 0.74
DOD2019-054 20/07/2019 1751.489 1148.12 -396.642 111.9 114.95 3.05 2.98 1.86 1.85
DOD2019-058 07/08/2019 1737.463 1179.071 -373.329 81.37 84.7 3.33 2.93 7.80 7.62
DOD2019-062 11/08/2019 1744.189 1202.82 -374.002 77.16 84.74 7.58 7.37 1.20 1.20
DOD2019-064 14/08/2019 1745.167 1229.26 -373.199 76.4 85 8.6 8.46 1.44 1.44
DOD2019-065 17/08/2019 1740.74 1247.04 -361.376 81.65 84.6 2.95 2.78 1.13 1.05
DOD2019-071 11/08/2019 1743.136 1278.844 -354.397 93.1 101.25 8.15 7.65 2.10 2.10
DOD2019-072 17/08/2019 1746.972 1309.528 -355.602 92.53 95.14 2.61 2.61 0.75 0.65
DOD2019-073 21/08/2019 1753.994 1371.047 -347.596 115 119 4 3.51 1.25 1.25
DOD2019-074 23/07/2019 1754.501 1272.581 -378.005 73.85 75.55 1.7 1.65 2.32 1.28
DOD2019-075 27/06/2019 1767.642 1275.186 -399.987 78.4 82.6 4.2 4.07 1.54 1.54
DOD2019-076 30/06/2019 1763.209 1290.188 -389.498 75.15 78.5 3.35 3.34 5.37 5.37
DOD2019-077 02/07/2019 1773.238 1300.484 -402.742 83.08 85.72 2.64 2.51 7.24 6.04
DOD2019-078 20/07/2019 1775.85 1321.227 -399.189 81.9 88.05 6.15 6.03 2.78 2.78
DOD2019-079 18/07/2019 1761.896 1321.197 -377.872 75.45 78.97 3.52 3.50 6.99 6.99
MU9-019 08/08/2019 1858.279 1518.94 -529.552 150.2 158.35 8.15 5.24 1.46 1.46
MU9-020 18/08/2019 1887.54 1511.106 -600.533 204.7 224.15 19.45 9.19 1.57 1.57
POD2019-012 08/05/2019 1806.281 1414.745 -451.053 84.2 89 4.8 4.43 0.85 0.85
POD2019-013 11/05/2019 1803.162 1433.972 -446.062 78.16 85.55 7.39 7.07 1.47 1.47
POD2019-014 16/05/2019 1809.44 1445.913 -451.242 82.3 95.2 12.9 12.02 1.29 1.29
Table 5: Skarn Drilling Results (June 2019 – September 2019)

Hole ID Hole Completion Date Intercept
Northing
(Mine Grid) Intercept
Easting
(Mine Grid) Intercept
Elevation
(Mine Grid) From (m) To (m) Drilled
Width
(m) True Width (m) Au (g/t) Au min. 3m mining width (g/t)
MU9-009A 24/06/2019 1690.45 1586.03 -508.33 67.65 68.95 1.3 0.65 23.77 5.15
MU9-012 04/08/2019 1687.81 1612.9 -507.67 69.7 72 2.3 0.95 1.32 0.42
MU9-013 09/08/2019 1677.41 1637.61 -504.47 72.6 77.74 5.14 1.81 1.71 1.03
MU9-014 11/08/2019 1659.49 1619.51 -486.32 45.9 49.05 3.15 1.65 14.31 7.87
Figure 1: https://www.globenewswire.com/NewsRoom/AttachmentNg/39ab60c1-8d7f-42e2-ab79-516a1d5bb210

Figure 2: https://www.globenewswire.com/NewsRoom/AttachmentNg/8c0b8412-5a42-4f7e-909e-b3abb449db53

Figure 3: https://www.globenewswire.com/NewsRoom/AttachmentNg/a8c652ef-fb29-4e89-b323-8bbe23d04e0e

Figure 4: https://www.globenewswire.com/NewsRoom/AttachmentNg/0f63fdbb-b97f-4d19-9eeb-d23dc7671c53

Figure 5: https://www.globenewswire.com/NewsRoom/AttachmentNg/e281e025-2510-4f37-8c1e-83a9a4f35eb4

Figure 6: https://www.globenewswire.com/NewsRoom/AttachmentNg/bbf6894d-06c9-407e-86c3-d35d144fa1b7

Figure 7: https://www.globenewswire.com/NewsRoom/AttachmentNg/c570f17a-6077-415e-84fa-88bb51828bb5

Figure 8: https://www.globenewswire.com/NewsRoom/AttachmentNg/11e72bf7-c85a-4367-b770-6d09258bca45

Figure 9: https://www.globenewswire.com/NewsRoom/AttachmentNg/8fec8d46-d7a3-42d9-ac1e-a9bfd628f608

Drilling and Assaying

At Costerfield, diamond drill core was logged and sampled by Costerfield geologists. All samples were sent to OnSite Laboratory Services in Bendigo, Victoria, Australia, for sample preparation and assay. Site geological and metallurgical personnel have implemented a QA/QC process that includes the regular submission of standard reference materials and blanks with drill and face samples submitted for assay. Standard reference materials have been certified by Geostats Pty Ltd. (February 6, 2019 Technical Report entitled “Costerfield Operation, Victoria, Australia NI 43-101 Report”, available on SEDAR (www.sedar.com), which contains a complete description of drilling, sampling, and assaying procedures).

At Björkdal, all diamond drill core was logged and sampled by Björkdal geologists. Exploration drill hole samples (prefix MU) were sent to CRS Minlab Oy (CRS) in Kempele, Finland for sample preparation and assaying. Development Optimization drill hole samples (prefix DOD) were at the onsite lab ran by ALS for sample preparation and assaying (see March 28, 2019, Technical Report entitled “Technical Report on the Björkdal Gold Mine, Sweden”, available on SEDAR (www.sedar.com), which contains a complete description of drilling, sampling, and assaying procedures).

Assaying in both the CRS and ALS laboratories was conducted utilizing the Pal1000 (CRS) cyanide leaching processes. Mandalay’s rigorous QA/QC program included the use of standard reference samples, blanks, duplicates, repeats, and internal laboratory quality assurance procedures.

Qualified Person:

Chris Gregory, Vice President of Operational Geology and Exploration at Mandalay Resources, is a Member of the Australian Institute of Geoscientists (AIG), and a Qualified Person as defined by NI 43-101. He has reviewed and approved the technical and scientific information provided in this release.

For Further Information

Dominic Duffy
President and Chief Executive Officer

Edison Nguyen
Manager, Analytics and Investor Relations

Contact:
647.260.1566

About Mandalay Resources Corporation

Mandalay Resources is a Canadian-based natural resource company with producing assets in Australia and Sweden, and care and maintenance and development projects in Chile. The Company is focused on growing production at its gold and antimony operation in Australia, and gold production from its operation in Sweden to generate near term cash flow.

Forward-Looking Statements:

This news release contains "forward-looking statements" within the meaning of applicable securities laws, including statements regarding the exploration and development potential of the Youle deposit (Costerfield) and the Aurora Zone (Björkdal). Readers are cautioned not to place undue reliance on forward-looking statements. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, changes in commodity prices and general market and economic conditions. The factors identified above are not intended to represent a complete list of the factors that could affect Mandalay. A description of additional risks that could result in actual results and developments differing from those contemplated by forward-looking statements in this news release can be found under the heading “Risk Factors” in Mandalay’s annual information form dated March 28, 2019, a copy of which is available under Mandalay’s profile at www.sedar.com. In addition, there can be no assurance that any inferred resources that are discovered as a result of additional drilling will ever be upgraded to proven or probable reserves. Although Mandalay has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.

image: https://www.globenewswire.com/newsroom/ti?nf=NzcyNDAxMiMzMTQwMTg1IzIwMjg0ODA=

image: https://ml.globenewswire.com/media/b5f2fa1c-f64d-4f0c-a9c7-ff4d73fc1ef0/small/mandalay-resources-logo.jpg

Primary Logo

Figure 1
image: https://ml.globenewswire.com/media/39ab60c1-8d7f-42e2-ab79-516a1d5bb210/medium/figure-1.png

Longitudinal Section and Plan Section of Youle (Costerfield) Illustrating Location of Recent Intercepts along with first access on Youle
Figure 2
image: https://ml.globenewswire.com/media/8c0b8412-5a42-4f7e-909e-b3abb449db53/medium/figure-2.png

Longitudinal Section Illustrating Current Drill Hole CD001 and Planned Drill Hole Locations of Costerfield Deep Drilling Program
Figure 3
image: https://ml.globenewswire.com/media/a8c652ef-fb29-4e89-b323-8bbe23d04e0e/medium/figure-3.png

Downhole trace-level geochemistry of CD001, showing correlation of elevated Au-Sb-As-Ag and hydrothermal muscovite alteration between 975-1040m.
Figure 4
image: https://ml.globenewswire.com/media/0f63fdbb-b97f-4d19-9eeb-d23dc7671c53/medium/figure-4.png

Björkdal Mine Scale Overview Map Showing the Location of the Aurora Zone and Lake Zone Skarn in Relation to Mine Development. Black Box Denotes Level Plan for Lake Zone Skarn
Figure 5
image: https://ml.globenewswire.com/media/e281e025-2510-4f37-8c1e-83a9a4f35eb4/medium/figure-5.png

Longitudinal Section of the Aurora Zone Illustrating Location of Recent Intercepts
Figure 6
image: https://ml.globenewswire.com/media/bbf6894d-06c9-407e-86c3-d35d144fa1b7/medium/figure-6.png

Cross Sections of Björkdal Mine Area Showing the Location and Current Size of the Aurora Zone (A-A’) and Lake Zone Skarn (C-C’), in which the Black Box Denotes Focused Cross Section in Figure 7
Figure 7
image: https://ml.globenewswire.com/media/c570f17a-6077-415e-84fa-88bb51828bb5/medium/figure-7.png

Cross Section Displaying the Current Limits of the Lake Zone Skarn Horizon
Figure 8
image: https://ml.globenewswire.com/media/11e72bf7-c85a-4367-b770-6d09258bca45/medium/figure-8.png

Cross Section Displaying the Current Limits of the Lake Zone Skarn Horizon
Figure 9
image: https://ml.globenewswire.com/media/8fec8d46-d7a3-42d9-ac1e-a9bfd628f608/medium/figure-9.png

Schematic Level Plan of the Lake Zone Skarn Horizon Illustrating Location of Recent Intercepts
GlobeNewswire
September 30, 2019 - 1:30 PM PDT
Tags:
INDUSTRIAL METALS & MINERALS

Read more at https://stockhouse.com/news/press-releases/2019/09/30/mandalay-resources-corporation-provides-exploration-update#q8fZvMJ7OJtZc0Ed.99

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