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2016-04-13

Mandalay Resources Corporation Announces Production and Sales Results for the First Quarter of 2016

Mandalay Resources Corporation
Press release

Mandalay Resources Corporation Announces Production and Sales Results for the
First Quarter of 2016

TORONTO, 2016-04-12 23:24 CEST (GLOBE NEWSWIRE) -- Mandalay Resources
Corporation ("Mandalay" or the "Company") (TSX:MND) announced today its
production and sales results for the first quarter of 2016. In the first
quarter of 2016, Mandalay produced 39,965 saleable ounces of gold equivalent
(“Au Eq. oz”) and sold 40,808 Au Eq. oz.

Mark Sander, President and Chief Executive Officer of Mandalay, commented,
“Costerfield continued its excellent performance in the first quarter,
producing a record 12,433 oz saleable Au and 1,000 tonnes (“t”) saleable
antimony (“Sb”), tied for a record. We expect strong performance to continue
through the rest of the year as the mine continues to operate at its maximum
effective processing rate.”

Mr. Sander continued, “Björkdal produced 12,185 oz saleable Au, the second best
quarter since being acquired by Mandalay in September, 2014, and the third
consecutive quarter of increasing quarterly production. Our technical
improvement program continues to gain momentum. The quarter was the first one
in which selective underground grade control for on-vein development was
practiced in all headings for an entire three month period. In addition,
initial stopes designed on the basis of grade control sampling were extracted
during the quarter.

“Approximately 60,000 t of stockpile material was crushed and screened in
preparation for the optical ore sorting test planned for the second quarter.
Approximately 20,000 t of the fine fraction (<20 millimetre) material was fed
to the plant in the quarter. Finally, pilot tests of flotation equipment
designed to float both coarse gold particles and ultrafine gold particles were
completed, with final reporting of recoveries anticipated in the second
quarter. We expect Björkdal’s quarterly gold production rate to continue to
rise as mining and metallurgical improvements are implemented.”

Mr. Sander concluded, “Cerro Bayo production during the quarter was 4,336 oz Au
and 515,216 oz silver (“Ag”), impacted by the transition to, and ramp up of
mining in, the new Delia SE and Coyita mines. During the quarter, we completed
mining as planned in the Dagny and Fabiola mines. We continued developing the
new Delia SE mine, where we expect stoping to be initiated in the second
quarter. At the new Coyita mine, we obtained final permits for commercial
mining and initiated on-vein development during the quarter. We are planning to
mobilize a contract development crew during the second quarter in order to
increase the rate of capital and operating development that will support a
return to 1,400 t/day output of reserve-grade material from the mines.”

The Company maintains its full year production guidance range of 165,000 to
180,000 oz Au Eq.

Saleable production for the three months ended March 31, 2016:

-- The Company produced a total of 28,954 oz Au, 1,000 t Sb and 515,216 oz Ag,
representing a total of 39,965 oz Au Eq. equivalent, versus 27,740 oz Au,
969 t Sb and 590,755 oz Ag, representing a total of 42,277 oz Au Eq. in the
first quarter of 2015.

-- Production at Costerfield (Australia) was 12,433 oz Au and 1,000 t Sb,
versus 10,416 oz Au and 969 t Sb in the first quarter of 2015.

-- Production at Cerro Bayo (Chile) was 4,336 oz Au and 515,216 oz Ag, versus
5,005 oz Au and 590,755 oz Ag in the first quarter of 2015.

-- Production at Björkdal (Sweden) was 12,185 oz Au, versus 12,319 oz Au in
the first quarter of 2015.

Table 1 – First Quarter Saleable Production for 2016 and 2015

Metal Source Three months to Three months to
31 March 31 March
2016 2015
Gold (oz) Costerfield 12,433 10,416
Cerro Bayo 4,336 5,005
Björkdal 12,185 12,319
Total 28,954 27,740
Antimony (t) Costerfield 1,000 969
Silver (oz) Cerro Bayo 515,216 590,755
Average quarterly prices:
Gold US$/oz 1,181 1,218
Antimony US$/t 5,353 8,109
Silver US$/oz 14.85 16.67
Au Eq. (oz)1 Costerfield 16,966 16,867
Cerro Bayo 10,814 13,091
Björkdal 12,185 12,319
Total 39,965 42,277

1 Quarterly Au Eq. oz produced is calculated by multiplying the saleable
quantities of Au, Ag, and Sb in the period by the respective average market
prices of the commodities in the period, adding the three 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; average Ag price in the period is calculated as the average of the daily
London Broker’s silver spot price for all days in the period, with price on
weekend days and holidays taken from the last business day. The source for all
prices iswww.metalbulletin.com.

Sales for the three months ended March 31, 2016:

-- The Company sold 29,183 oz Au, 893 t Sb, and 602,621 oz Ag, representing a
total of 40,808 oz Au Eq.

-- Costerfield sold 10,816 oz Au and 893 t Sb.

-- Cerro Bayo sold 6,030 oz Au and 602,621 oz Ag.

-- Björkdal sold 12,337 oz Au.

Table 2 – First Quarter Sales for 2016 and 2015

Metal Source Three months to Three months to
31 March 31 March
2016 2015
Gold (oz) Costerfield 10,816 9,823
Cerro Bayo 6,030 7,084
Björkdal 12,337 11,750
Total 29,183 28,657
Antimony (t) Costerfield 893 781
Silver (oz) Cerro Bayo 602,621 792,797
Average quarterly prices:
Gold US$/oz 1,181 1,218
Antimony US$/t 5,353 8,109
Silver US$/oz 14.85 16.67
Au Eq. (oz)2 Costerfield 14,864 15,026
Cerro Bayo 13,607 17,935
Björkdal 12,337 11,750
Total 40,808 44,711

2Quarterly Au Eq. oz sold is calculated by multiplying the saleable quantities
of Au, Ag, and Sb in the period by the respective average market prices of the
commodities in the period, adding the three 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.

For Further Information:

Mark Sander
President and Chief Executive Officer

Greg DiTomaso
Director of Investor Relations

Contact:
647.260.1566

About Mandalay Resources Corporation:

Mandalay Resources is a Canadian-based natural resource company with producing
assets in Australia, Sweden and producing and exploration projects in Chile.
The Company is focused on executing a roll-up strategy, creating critical mass
by aggregating advanced or in-production gold, copper, silver and antimony
projects in Australia, the Americas and Europe to generate near-term cash flow
and shareholder value.

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, silver and antimony for the 2016 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 30, 2016, 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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