Mandalay Resources Reports Discovery of a New Gold Domain at Björkdal

TORONTO, Dec. 19, 2024 - Mandalay Resources Corp. ("Mandalay" or the "Company") (TSX: MND) (OTCQB: MNDJF) is pleased to provide an update on near mine exploration success at its Björkdal operation in Sweden, highlighting the discovery of North Zone Below Marble - a new underground mineral domain 200 meters ("m") north of the current operations. This news release is the fourth in a series of updates on our 2024 exploration progress at Björkdal.

New Drilling Highlights:

• North Zone Below Marble Discovery:
  • Identified 18 interpreted veins over a 400 m strike length and 250 m in height, located approximately 200 m from current development.
  • A maiden Mineral Resource estimate expected in Mandalay's year-end update (to be released February 2025), has the potential to add multiple years of mine life.
  • Key intercepts include:
    • 178.9 g/t gold over 1.15 m (Estimated True Width "ETW" 0.94 m) and;
    • 39.6 g/t gold over 3.90 m (ETW 2.76 m) in MU24-010 and;
    • 69.4 g/t gold over 0.80 m (ETW 0.69 m) in MU24-024.
• Main Zone Infill Drilling:
  • Continued success in Eastern Extension with intercepts:
  • 115.8 g/t gold over 1.85 m (ETW 1.60 m) in MU24-018 and;
  • 43.0 g/t gold over 1.55 m (ETW 1.34 m) in MU24-020.
• Aurora Zone Extension:
  • Successful testing of a 200 m strike extension identified:
  • 3.4 g/t gold over 7.40 m (ETW 3.70 m) in MU24-004 and;
  • 3.9 g/t gold over 2.70 m (ETW 1.70 m) in MU24-001.

Chris Davis, VP of Exploration and Operational Geology, commented:

"Björkdal's near-mine exploration primarily targets higher margin resources. The newly discovered North Zone Below Marble exhibits consistent, high-grade veining approximately 200 m north of the current underground mine. The veining architecture is similar to the Main Zone, known for its consistently higher-grade ore. This discovery remains open at depth and along strike.

"Additionally, infill drilling in the Eastern Extension of the Main Zone has continued to demonstrate consistent veining and gold endowment through the zone. The Main Zone remains unbound and further extension is expected as appropriate drill platforms become available as mining progresses into the area.

"Lastly, exploration in the larger Aurora Zone has successfully identified wide gold-bearing veins at depth and to the east, approximately 180 m along strike of current mining operations. These intercepts reinforce Aurora's potential for extended delivery of bulk tonnage."

2024 Björkdal Near Mine Focus

Near mine exploration through 2024 has focused on three extension areas of the Björkdal deposit. 2023 exploration focused on veining to the north of Aurora above the marble horizon however with some keen incites from Björkdal geologists, the focus moved to below marble where, with targeting success, a significant portion of drilling through 2024 has continued.

Further to the south and along the eastern flank of the mine, the eastern extension of Main Zone has been a major source of exploration success and Reserve growth over the past years. In 2024, drilling in this area continued with an infill program targeting previously identified Inferred resources.

Additionally, and as appropriate drilling horizons became available, drilling continued to test the extensions of Aurora to the east and at depth. (see Figure 1).

North Zone Below Marble

Since late 2023 a total of 14 holes have been drilled from underground workings to the northwest intercepting a series of quartz veins. We are very excited that these veins are interpreted to be largely continuous through the tested areas and, in many instances, exhibit visible gold. Above the marble horizon, to the south of this discovery, the Aurora system was the dominant feature and veining directly below Aurora was sparse. Through analytical work, and forward modelling of kinematic indicators, Mandalay geologists came to the understanding that further north should be a conducive environment for gold endowment within the Björkdal deposit. This body of work also anticipates the presence of further fault structures at depth that mimic the important role in mineralisation that the Björkdal shear plays through much of the deposit. This means that the veining with the North Zone Below Marble domain is likely to exhibit larger vertical extents.

Within the 14 holes drilled, a total of 193 significant sample composites have been assayed across 18 veins currently interpreted. In addition to these stated drilling highlights, this program has also produced 43.9 grams per tonne gold over a length of 1.10 m (ETW 0.71 m in MU24-006, 6.1 grams per tonne gold over a length of 3.85 m (ETW 3.62 m in MU24-008 and 42.9 grams per tonne gold over a length of 0.80 m (ETW 0.69 m in MU24-024. (Figure 2.)

Core drilled during the program has been oriented so that further structural analyses can be undertaken. Veining is shown to be largely vertical to northwest dipping in geometry and consists largely of quartz with varying amounts of scheelite, tsumoite and of course, visible gold (Figure 3).

Unfortunatly the drill rigs used for this campaign were limited in their drill capacity and many of the drill holes ended within the mineral domain, hence the domain is still open further to the northwest, southwest and at depth. As we progress underground development deeper within Aurora, more appropriate drilling platforms will be made available to ensure greater extent and ideal orientations maximised. Drilling to test the limits of this new domain is expected to commence in 2025.

Main Zone Infill Drilling (part of Eastern Extension)

The Björkdal deposit is split into a number of domains based on mineralisation characteristics. Main Zone has been a consistent source of higher-grade ore since underground production commenced in 2008. Veining within the domain terminates at its upper extent at the Björkdal shear however it is open down plunge to the east. Since 2021, Main Zone has been explored and extended to the east through a series of drilling campaigns. In 2024, an infill drilling program was executed targeting the Inferred resource discovered in 2023. The drilling confirmed gold bearing veins that are typical of the Main Zone with encouraging assay results returned. Some highlights, additional to the previously stated, are 16.8 grams per tonne gold over a length of 3.1 m (ETW 0.8 m in MU24-018 and 59.3 grams per tonne gold over a length of 0.40 m (ETW 0.35 m in MU24-022. (Figure 4)

The veining within the infill drilling presents as the characteristic sub vertical sheeted arrays with some crosscutting veining evident. Mineralization also looks typical of Main Zone with visible gold located in a number of intercepts alongside sulphide minerals such at pyrite and pyrrhotite with scheelite and bismuth telluride compounds also present.

Due to the eastward plunge of Main Zone and the positioning of mine development, the further testing of veining becomes difficult with less desirable angles of intercept when targeting above 250 metres from development, therefore further extension drilling awaits mine development progression and dedicated drilling positions. The deposit however does not show signs of lessening grade and it is still open down plunge to the east.

Aurora Deeps

Since production began from Aurora in 2018, the Aurora domain has been a significant source of bulk tonnage for Björkdal with some stopes extending to over 10 metres in width. At the heart of the domain is the Aurora orebody itself which is hosted within a pre-existing shear and consists of a range mineralisation characteristics with gold bearing veinlet arrays grading to massive quartz veins. This orebody is accompanied both in the hanging and footwall by northwest dipping quartz veins that also carry gold.

The 2024 drilling campaign looked to extend Aurora mineralisation to the east. This program was successful in finding eastward continuation approximately 200 metres from current development. Two intercepts standout as significant grades within this area and are likely to be the continuation of Aurora mineralisation. These are 3.4 grams per tonne gold over 7.40 m (ETW 3.70 m) in MU24-004 and 3.9 grams per tonne gold over 2.70 m (ETW 1.70 m) in MU24-001. (Figure 6.)

Consistent with Aurora, the veining is of greater width then other domains within Björkdal and exhibits free gold within quartz (Figure 7). In general, however there is a lower amount of veining surrounding the Aurora intercepts at this point. Continued drilling will look to infill and further extend Aurora to the east.

In 2025 Mandalay will continue to explore both the underground northern and eastern extensions of the Björkdal deposit into these areas of high potential as appropriate drill horizons become available. This near mine exploration will be accompanied by further surface drilling as Mandalay builds its knowledge around the exciting and expanding Storheden and Norrberget deposits (reported in April and May of 2024) that have the potential to be significant additions to Björkdal's future.

Drilling and Assaying

At Björkdal, all diamond drill core was logged and sampled by Björkdal geologists. Exploration drill hole samples were sent to CRS Laboratories Oy ("CRS") in Kempele, Finland for sample preparation and assaying.

Assaying was conducted utilizing the Pal1000 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. (see March 30, 2023, 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).

Qualified Person:

Chris Davis, Vice President of Operational Geology and Exploration at Mandalay Resources, is a Chartered Professional of the Australasian Institute of Mining and Metallurgy (MAusIMM CP(Geo)), as well as a Member of the Australian Institute of Geoscientists (MAIG) and a Qualified Person as defined by NI 43-101. He has reviewed and approved the technical and scientific information provided in this release.

About Mandalay Resources Corporation

Mandalay Resources is a Canadian-based natural resource company with producing assets in Australia (Costerfield gold-antimony mine) and Sweden (Björkdal gold mine), with projects in Chile and Canada under closure or development status. The Company is focused on growing its production and reducing costs to generate significant positive cashflow. Mandalay is committed to operating safely and in an environmentally responsible manner, while developing a high level of community and employee engagement.

Mandalay's mission is to create shareholder value through the profitable operation and continuing the regional exploration program, at both its Costerfield and Björkdal mines. Currently, the Company's main objective is to continue mining the high-grade Youle vein at Costerfield, bring online the deeper Shepherd veins, both of which will continue to supply high-grade ore to the processing plant, and to extend Youle Mineral Reserves. At Björkdal, the Company will aim to increase production from the Aurora Zone and other higher-grade areas in the coming years, in order to maximize profit margins from the mine.

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 exploration results disclosed. 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, 2024, 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.

Appendix

Table 1. Significant Intercepts from the North Zone Below Marble drilling program.

Table 2. Significant Intercepts from the Main Zone infill drilling program.

Table 3. Significant Intercepts from the Aurora Extension drilling program.

Table 4. Drill Hole Collar Details

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SOURCE Mandalay Resources Corporation