Mandalay Resources Corporation (“Mandalay” or the “Company”) (TSX: MND, OTCQB: MNDJF) is pleased to provide an update on the eastern extension drilling and significant intercepts from the North Zone drilling program at its Björkdal operation in Sweden.

New Drilling Highlights:

North Zone

  • 155.0 g/t gold over 0.80 m (Estimated True Width “ETW” 0.61 m);
  • 183.0 g/t gold over 0.45 m (ETW 0.34 m); and
  • 64.8 g/t gold over 0.85 m (ETW 0.55 m) in MU22-002.

Extension Plunge Extension

  • 14.7 g/t gold over 4.10 m (ETW 3.48 m) in MU21-009;
  • 27.3 g/t gold over 2.20 m (ETW 1.61 m) in MU21-010; and
  • 91.3 g/t gold over 0.30 m (ETW 0.26 m) in MU21-012.

Note: Further intercept details including significant intercepts within composite intervals can be found in Table 1 in the Appendix to this document.

Dominic Duffy, President and CEO of Mandalay, commented:

“We are pleased to report progress on the Eastern Plunge extension program where infill drilling of the eastern section between the Central and Lake Zone plunge extensions have produced excellent results while bridging our knowledge in this new and exciting extension. We expect these results will increase our 2022 year-end Mineral Reserves.

“Furthermore, as the initial step out phase of eastern extension drilling concludes, underground drilling resources will shift towards our North Zone program. An area north of Aurora in which east-west trending veining parallels the Aurora and surrounding veins. The latest round of drilling is ongoing and is aimed at infilling known veining and testing for the lateral and vertical extents. So far, the drilling supports the interpreted veining previously tested and suggest a concentration of veining approximately 450 m north of Aurora where the best grades of the prospect have been recovered in MU22-002. Lateral extension drilling is not far progressed, however, there are indications that the trend could span 750 m.

“Lastly, a video has been prepared by Chris Davis, Vice President of Operational Geology and Exploration, to further explain the information in this release. This video can be found on Mandalay’s website or by clicking here.”

Dual focus for Underground Exploration

During the first half of 2022 underground exploration at Björkdal has been focused on further defining the Eastern Plunge extension veining and investigating the breadth and grade of mineralization to the north of Aurora within the North Zone.

https://www.globenewswire.com/NewsRoom/AttachmentNg/59472517-26a9-427b-a806-e80d75655662

Figure 1. Perspective view of the Björkdal Mine looking towards the SW highlighting the interaction of the veining (Red), Marble (Blue) and Björkdal fault (Yellow). Drilling from the 2022 Eastern extension and North Zone programs is also shown.

Eastern Extension

Late in 2021, it became apparent that a gap of highly prospective ground was underexplored between Lake and Central Zones at depth. A testing program was designed to explore the gap and yielded initial success (press released January 24, 2022). A follow-up drilling campaign was designed to define the extended and newly discovered veining. The 2022 program included seven holes and intercepted 17 now modelled veins with encouraging grades amongst them including 14.7 g/t gold over 4.10 m (3.48 m ETW) and 27.3 g/t gold over 2.20 m (1.61 m ETW). Assays are pending for the last half of MU22-006 however veining was identified within this drillhole along trend.

This drilling program has now identified veining of mineable grades up to 400 m down plunge from the current underground infrastructure.

https://www.globenewswire.com/NewsRoom/AttachmentNg/f0ccaea4-94b3-4498-b3ea-67b04851289b

Figure 2. Plan section of the Central Zone – Lake Zone Link Drilling. Intercepts above 0.5 g/t Au when diluted to 1 m are denoted by dots. Drillholes are annotated with composites over 2.0 g/t Au when diluted to 1 m.

Like previous drilling of the eastern continuation, visible gold is common within the quartz veining and is generally accompanied by significant gold grades when assayed. Below is an image of the aforementioned MU022-010 intercept.

https://www.globenewswire.com/NewsRoom/AttachmentNg/4bfc75dc-c078-4902-ba7e-d32b98b4a73f

Figure 3. Photograph of core containing gold within MU22-010 (340.05 – 342.25 m – ETW 1.61m @ 27.3 g/t Au).

North Zone

In January 2022, Mandalay recommenced the North Zone drilling program with an intention to further define mineralization intercepted in 2020 and test for lateral and vertical extents. The drilling program is ongoing with 11 drill holes completed to-date. Excitingly, the drilling has highlighted an area of increased veining density at approximately 450 m north of Aurora. This increased density is also accompanied by increased grades with two of the best results in the prospect coming from MU22-002. These are: 155.0 g/t gold over 0.80 m (0.61 m ETW) in MU22-002 and 183.0 g/t gold over 0.45 m (0.34 m ETW).

Apart from the exceptional grade, these intercepts are important due to their location above the marble unit and what that could mean for vertical and lateral grade continuity. Veining below the marble horizon general persists for 80 m in vertical extent. The Aurora orebody – like the North Zone – exists above the marble and has a mineable vertical extent of approximately 350 m and lateral extent of 400 m. The 2022 North Zone drilling campaign has intersected mineralization across a 750 m trend and 200 m vertical extent although the bounds of the zone have not yet been found.

https://www.globenewswire.com/NewsRoom/AttachmentNg/75aea6e4-9958-4f6e-891e-5313c639e23f

Figure 4. Plan section of the North Zone drilling area showing the 2022 drilling complete to date. Intercepts above 0.5 g/t Au when diluted to 1 m are denoted by dots. Drillholes are annotated with composites over 2.0 g/t Au when diluted to 1 m.

https://www.globenewswire.com/NewsRoom/AttachmentNg/66c6c133-05d5-4c6c-adde-6f5371182f73

Figure 5. East-West cross-section of area showing the divergence of Marble and Björkdal Shear. Intercepts above 0.5 g/t Au when diluted to 1 m are denoted by dots. Drillholes are annotated with composites over 2.0 g/t Au when diluted to 1 m.

Drilling and development of both areas of interest will be ongoing through 2022 with an intent of increasing reserves and setting up the next high tonnage and grade development area for the Björkdal Mine.

https://www.globenewswire.com/NewsRoom/AttachmentNg/98e8b3ba-1540-4241-bc8c-9a3e7ee32902

Figure 6. Photograph of the MU22-002 intercept at 476.7m with image of core showing gold entrained within quartz.  

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 31, 2022, Technical Report entitled “Mandalay Resources – Björkdal Property NI 43-101 Technical Report” 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.

For Further Information

Dominic DuffyPresident and Chief Executive Officer

Edison NguyenDirector, Business Valuations and Investor Relations

Contact:647.260.1566 ext. 1

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 31, 2022, 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. Table of Significant Intercepts from the Central to Lake Zone drilling program

Drill HoleID From(m) To (m) Interval(m) EstimatedTrueWidth (m) AuGrade(g/t) Au (g/t)overmin. 1mwidth
MU22-006 23.30 23.75 0.45 0.34 3.6 1.2
MU22-006 44.00 44.35 0.35 0.22 55.8 12.3
MU22-006 74.60 75.95 1.35 1.30 1.4 1.4
MU22-006 100.75 101.25 0.50 0.40 8.4 8.4
MU22-006 237.00 238.10 1.10 0.87 2.7 2.7
MU22-007 110.55 113.05 2.50 1.61 2.0 2.0
MU22-007 217.40 217.90 0.50 0.43 4.7 2.0
MU22-007 241.30 242.65 1.35 1.17 3.8 3.8
MU22-008 101.15 101.85 0.70 0.44 1.2 1.2
MU22-008 125.80 126.85 1.05 0.66 1.0 1.0
MU22-008 305.00 308.00 3.00 0.78 2.8 2.2
MU22-008 359.55 359.85 0.30 0.23 24.6 5.7
MU22-008 365.00 366.00 1.00 0.63 13.3 13.3
MU22-009 25.00 26.00 1.00 0.77 0.9 0.9
MU22-009 33.00 34.00 1.00 0.77 1.8 1.8
MU22-009 55.00 56.00 1.00 0.77 1.1 1.1
MU22-009 87.00 88.00 1.00 0.77 1.5 1.5
MU22-009 94.95 95.25 0.30 0.23 68.4 15.7
MU22-009 126.05 127.00 0.95 0.73 0.8 0.8
MU22-009 215.40 215.80 0.40 0.38 6.1 2.3
MU22-009 229.30 233.40 4.10 3.48 14.7 14.7
MU22-009 247.70 248.75 1.05 0.81 2.0 2.0
MU22-009 250.80 254.50 3.70 2.83 2.4 2.4
MU22-009 356.00 359.00 3.00 2.32 8.1 8.1
MU22-009 383.60 384.25 0.65 0.56 29.1 16.3
MU22-009 402.35 403.00 0.65 0.50 41.8 20.9
MU22-009 427.00 427.95 0.95 0.73 0.8 0.8
MU22-009 473.85 474.15 0.30 0.26 11.5 3.0
MU22-010 81.85 82.95 1.10 1.08 4.2 4.2
MU22-010 101.95 103.05 1.10 0.78 1.7 1.3
MU22-010 108.00 109.00 1.00 0.71 6.8 4.8
MU22-010 137.00 138.00 1.00 0.78 0.8 0.8
MU22-010 148.05 148.95 0.90 0.78 0.8 0.6
MU22-010 255.85 256.40 0.55 0.39 4.0 1.5
MU22-010 265.05 266.05 1.00 0.78 2.5 2.5
MU22-010 319.05 320.00 0.95 0.74 0.9 0.9
MU22-010 323.00 326.00 3.00 2.35 2.2 2.2
MU22-010 340.05 342.25 2.20 1.61 27.3 27.3
MU22-010 360.00 361.00 1.00 0.78 0.9 0.9
MU22-010 363.95 364.75 0.80 0.69 9.6 6.6
MU22-010 373.20 374.15 0.95 0.78 1.9 1.5
MU22-010 385.00 386.00 1.00 0.78 1.3 1.3
MU22-010 386.60 387.00 0.40 0.38 1.5 0.6
MU22-011 24.00 26.05 2.05 0.87 1.7 1.5
MU22-011 32.00 33.00 1.00 0.66 1.0 1.0
MU22-011 37.00 37.95 0.95 0.63 7.2 7.2
MU22-011 82.00 83.00 1.00 0.66 2.1 2.1
MU22-011 215.00 215.35 0.35 0.32 7.8 2.5
MU22-011 271.95 273.00 1.05 0.70 1.1 1.1
MU22-011 333.60 334.20 0.60 0.56 28.9 16.2
MU22-011 345.00 347.85 2.85 2.18 1.4 1.4
MU22-011 366.00 368.00 2.00 1.00 2.6 2.6
MU22-011 375.95 376.95 1.00 0.50 2.1 1.1
MU22-011 405.05 405.90 0.85 0.56 3.4 3.4
MU22-011 480.75 481.80 1.05 0.53 1.1 0.6
MU22-012 259.45 259.75 0.30 0.28 2.5 0.7
MU22-012 265.00 266.30 1.30 1.15 3.2 3.2
MU22-012 274.70 275.00 0.30 0.26 91.3 23.7
MU22-012 301.70 302.00 0.30 0.27 1.9 0.5
MU22-012 309.00 310.00 1.00 1.00 1.4 1.4
MU22-012 311.00 312.10 1.10 0.71 1.0 0.7
MU22-012 317.95 319.00 1.05 0.95 1.2 1.1
MU22-012 347.40 347.80 0.40 0.20 3.8 0.8
MU22-012 354.00 356.00 2.00 1.73 3.5 3.5

Notes:

  1. Where true widths are greater than 1m, grades are not diluted and are presented as the grade over the composite true width.
  2. Composites that are below 0.5 g/t Au when diluted to 1 m are not reported in this table.

Table 2. Table of Significant Intercepts from the North Zone drilling program

Drill HoleID From(m) To (m) Interval(m) EstimatedTrueWidth (m) AuGrade(g/t) Au (g/t)overmin. 1mwidth
MU22-001 12.70 13.35 0.65 0.53 3.6 1.9
MU22-001 22.45 22.85 0.40 0.31 6.4 2.0
MU22-001 32.40 36.15 3.75 1.58 3.1 3.1
MU22-001 78.85 79.30 0.45 0.19 3.4 0.6
MU22-001 322.60 323.25 0.65 0.43 3.1 1.3
MU22-001 488.40 488.70 0.30 0.19 16.9 3.2
MU22-001 501.55 502.35 0.80 0.51 8.9 4.5
MU22-001 509.90 510.25 0.35 0.27 2.2 0.6
MU22-001 527.45 528.90 1.45 1.11 4.7 4.7
MU22-001 532.50 533.10 0.60 0.32 2.5 0.8
MU22-002 103.15 104.00 0.85 0.55 64.8 35.6
MU22-002 149.95 150.55 0.60 0.16 4.8 0.8
MU22-002 210.35 210.80 0.45 0.29 5.7 1.7
MU22-002 216.50 217.20 0.70 0.24 2.6 0.6
MU22-002 323.00 323.60 0.60 0.46 2.7 1.2
MU22-002 343.00 343.45 0.45 0.37 2.5 0.9
MU22-002 352.30 353.00 0.70 0.35 5.9 2.1
MU22-002 400.40 401.00 0.60 0.39 1.9 0.8
MU22-002 410.85 411.40 0.55 0.35 5.9 2.0
MU22-002 476.70 477.50 0.80 0.61 155.0 94.6
MU22-002 500.10 500.55 0.45 0.34 183.0 62.2
MU22-002 530.85 531.55 0.70 0.54 1.0 0.5
MU22-003 2.65 3.00 0.35 0.15 135.0 20.3
MU22-003 88.60 88.95 0.35 0.27 6.8 1.8
MU22-003 115.65 116.45 0.80 0.40 1.4 0.6
MU22-003 122.40 123.10 0.70 0.49 4.9 2.4
MU22-003 135.65 136.70 1.05 0.74 1.2 0.9
MU22-003 145.15 147.25 2.10 1.13 6.7 6.7
MU22-003 173.10 173.80 0.70 0.45 2.2 1.0
MU22-003 546.20 546.60 0.40 0.28 2.0 0.6
MU22-003 559.65 561.20 1.55 1.10 2.6 2.6
MU22-003 584.50 585.05 0.55 0.32 1.7 0.5
MU22-003 599.25 604.65 5.40 3.17 1.9 1.9
MU22-004 63.90 64.65 0.75 0.48 1.6 0.7
MU22-004 237.05 237.40 0.35 0.28 2.2 0.6
MU22-004 248.20 249.20 1.00 0.60 1.1 0.7
MU22-004 350.65 351.60 0.95 0.57 1.5 1.5
MU22-004 424.20 424.60 0.40 0.17 5.9 1.0
MU22-004 437.00 437.55 0.55 0.35 3.3 1.2
MU22-005 37.20 37.80 0.60 0.49 2.0 1.0
MU22-005 58.60 59.20 0.60 0.46 1.6 0.7
MU22-005 231.65 232.25 0.60 0.52 2.6 1.3
MU22-005 394.80 395.30 0.50 0.25 25.9 6.5
MU22-005 462.00 462.60 0.60 0.30 6.1 1.8
MU22-005 476.05 476.50 0.45 0.32 1.9 0.6
MU22-013 190.00 190.50 0.50 0.19 2.4 2.4
MU22-013 251.00 251.50 0.50 0.21 3.8 0.8
MU22-013 549.60 550.10 0.50 0.09 8.9 0.8
MU22-013 580.00 581.80 1.80 0.62 1.5 0.9
MU22-013 585.20 587.60 2.40 1.20 3.4 3.4
MU22-014 56.50 57.00 0.50 0.25 2.3 0.6
MU22-014 145.60 146.00 0.40 0.26 2.8 0.7
MU22-014 149.00 150.00 1.00 0.50 1.1 1.1
MU22-014 151.00 151.40 0.40 0.20 3.0 0.6
MU22-014 181.90 182.30 0.40 0.26 6.0 1.5
MU22-014 199.00 200.00 1.00 0.50 1.5 1.5
MU22-015A 142.00 142.50 0.50 0.25 7.8 2.0
MU22-015A 322.00 322.50 0.50 0.43 4.2 1.8
MU22-015A 549.00 549.60 0.60 0.46 12.2 5.6
MU22-016 73.50 74.50 1.00 0.64 3.3 2.1
MU22-016 109.40 110.00 0.60 0.39 2.1 0.8
MU22-016 117.60 118.50 0.90 0.69 1.3 0.9
MU22-016 161.00 161.40 0.40 0.31 1.9 0.6
MU22-016 365.70 366.00 0.30 0.26 4.7 1.2
MU22-017 69.60 72.10 2.50 2.17 2.9 2.9
MU22-017 79.00 79.50 0.50 0.43 4.2 1.8
MU22-017 255.80 256.30 0.50 0.25 5.9 1.5
MU22-017 274.00 275.00 1.00 0.75 6.0 6.0
MU22-017 281.70 282.00 0.30 0.23 11.0 2.5
MU22-017 327.00 327.40 0.40 0.38 5.4 2.0
MU22-017 410.50 411.00 0.50 0.43 1.4 0.6
MU22-017 449.00 449.60 0.60 0.46 2.2 1.0

Notes:

  1. Where true widths are greater than 1m, grades are not diluted and are presented as the grade over the composite true width.
  2. Composites that are below 0.5 g/t Au when diluted to 1 m are not reported in this table.

Table 3. Drill Hole Collar Details

DrillProgram Drill HoleID Easting Northing Elevation Depth Dip Azimuth DateComplete
CZ - LZ Infill MU22-001 763276 7213187 -281 598.90 -23.0 325.3 4/5/2022
CZ - LZ Infill MU22-002 763271 7213231 -203 623.80 -26.6 312.9 17/1/2022
CZ - LZ Infill MU22-003 763243 7213184 -184 610.20 -27.1 316.8 7/2/2022
CZ - LZ Infill MU22-004 763242 7213184 -185 621.05 -33.1 310.2 28/2/2022
CZ - LZ Infill MU22-005 763242 7213183 -184 530.40 -30.4 303.4 5/6/2022
CZ - LZ Infill MU22-006 764152 7213204 -223 500.50 -35.3 330.2 5/4/2022
CZ - LZ Infill MU22-007 764149 7213200 -222 491.80 -36.4 339.1 26/4/2022
North Zone MU22-008 764149 7213200 -222 513.45 -35.2 330.2 4/5/2022
North Zone MU22-009 764152 7213204 -222 501.05 -30.8 321.3 6/4/2022
North Zone MU22-010 764152 7213204 -222 404.35 -30.4 316.3 5/2/2022
North Zone MU22-011 764149 7213200 -222 498.05 -29.9 308.3 27/2/2022
North Zone MU22-012 764149 7213201 -222 433.00 -22.2 299.3 16/3/2022
North Zone MU22-013 763463 7213371 -319 600.35 -36.7 355.5 16/3/2022
North Zone MU22-014 763463 7213370 -319 600.30 -39.2 344.7 24/2/2022
North Zone MU22-015 763462 7213370 -319 174.50 -41.0 330.3 22/12/2021
North Zone MU22-015A 763462 7213370 -319 603.30 -41.1 331.0 30/1/2022
North Zone MU22-016 763462 7213370 -319 384.50 -34.5 320.6 6/4/2022
North Zone MU22-017 763361 7213275 -301 600.40 -26.2 330.3 4/5/2022
North Zone MU22-022 763276 7213187 -281 597.50 -26.0 329.3 14/5/2022

Notes:

  1. Coordinate System: SWEREF 99
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