Mr. Scott Caldwell reports

GUYANA GOLDFIELDS INC. REPORTS FIRST QUARTER 2016 RESULTS; SOLD 40,568 OUNCES OF GOLD GENERATING $18M IN FREE CASH FLOW

Guyana Goldfields Inc. is releasing its operational and financial results for the first quarter of 2016. All amounts are expressed in U.S. dollars unless otherwise stated. A conference call will also be held tomorrow, Tuesday, May 10, 2016, at 10 a.m. ET, to discuss first quarter results.

First quarter 2016 highlights:

• Generated $18.3-million of free cash flow, or 12 cents per share, in the company's first-ever quarter of commercial production;
• Added $5.6-million of cash to the balance sheet after making debt principal repayments of $6.8-million, debt interest payment of $2.5-million, and reducing accounts payable and accrued liabilities by $5.0-million;
• Finished the first quarter with a cash balance of $41.7-million, made up of cash and cash equivalents of $18.5-million, and restricted cash of $23.1-million;
• Produced 41,281 ounces of gold and sold 40,568 ounces of gold at an average realized gold price of $1,196 per ounce, generating gross revenues of $48.5-million and representing a margin of $418 per ounce above the company's all-in sustaining cost (AISC);
• Generated operating cash flow per share of 15 cents and net earnings per share of four cents.

Scott Caldwell, president and chief executive officer, stated: "In its first-ever quarter of commercial production, the company generated free cash flow of $18.3-million. This impressive achievement can be attributed to the very-high-profit-margin nature of the Aurora mine. With the gold price moving higher postquarter-end and with significant room for further optimization of the mine, the company is in an excellent position to deliver stellar results through the remainder of 2016."

                     AURORA GOLD MINE OPERATIONAL STATISTICS
                                    
                                Three months ended         Three months ended
                                    March 31, 2016              Dec. 31, 2015
                            (commercial production) (precommercial production)

Ore mined (tonnes)                         553,600                    483,000
Waste mined (tonnes)                     1,409,300                  1,004,000
Total mined (tonnes)                     1,962,900                  1,487,000
Strip ratio (waste:ore)                       2.55                       2.10
Tonnes mined per day (tpd)                  21,571                     16,163
Ore processed (tonnes)                     462,600                    393,000
Tonnes processed per day (tpd)               5,083                      4,271
Head grade (g/t Au)                           3.07                       3.32
Recovery (%)                                  89.2                       91.9
Mill utilization (%)                            89                         83
Gold produced (ounces)                      41,281                     35,590
Gold sold  (ounces)                         40,568                     28,850
Average realized gold price ($/ounce)        1,196                      1,079

First quarter 2016 operational results summary:

• Gold production totalled 41,281 ounces, exceeding the company's quarterly guidance range, based on mill throughput of 462,600 tonnes at an average head grade of 3.07 grams per tonne (g/t) gold and average recoveries of 89.2 per cent. The average recovery rate for March was 92.6 per cent.
• Production activities reflected an average of 5,083 tonnes per day in daily throughput (above nameplate capacity of 5,000 tonnes per day), with a new daily production record reached of 6,586 tonnes per day.
• Daily mining rates significantly improved to an average of 21,571 tonnes per day, with a highest daily production rate of 28,344 tonnes of material moved. Approximately 87 per cent of ore mined during the first quarter was fresh rock, with the balance saprolite.
• As at March 31, 2016, the run-of-mine stockpile contained approximately 78,700 tonnes of ore with a grade of approximately 1.98 grams per tonne.

                     FIRST QUARTER 2016 SELECTED FINANCIAL INFORMATION
          (in thousands of U.S. dollars, except ounces and per-ounce figures) 

                                                 Three  months ended              Three months ended
                                                      March 31, 2016                  March 31, 2015

Ounces produced                                               41,281                               -
Ounces sold                                                   40,568                               -
Revenues                                                     $48,530                               -
Earnings from mine operations                                $17,400                               -
Earnings (loss) before tax                                   $11,495                         $(1,914)
Net earnings (loss)                                           $7,017                         $(1,914)
Net earnings (loss) per basic share                            $0.05                          $(0.01)
Net earnings (loss) per diluted share                          $0.04                          $(0.01)
Cash flow from operating activities                          $23,637                         $(1,487)
Cash and cash equivalents                                    $18,520                         $15,859
Restricted cash balances                                     $23,146                         $33,298
Total assets                                                $365,471                        $367,391
Long-term debt                                              $148,860                        $106,473
Realized gold price per ounce                                 $1,196                               -
Average London PM Fix gold price per ounce                    $1,183                               -
Total cash costs per ounce, before royalty                      $525                               -
Total cash costs per ounce                                      $620                               -
AISC per ounce                                              (1) $778                               -

(1) Includes a one-time charge of $58 per ounce for the purchase of a used Twin Otter airplane

First quarter 2016 financial performance:

• A total of 40,568 ounces of gold were sold with an average realized gold price of $1,196 per ounce, resulting in revenues of $48.5-million. The average London PM Fix gold price per ounce was $1,183.
• Production costs were $21.3-million, and include costs associated with mining activities, processing and mine site administration.
• Total cash costs were $620 per ounce of gold sold and AISC was $778 per ounce of gold sold, which included a one-time charge of $58 per ounce for the purchase of a used Twin Otter airplane.
• Net earnings amounted to $7.0-million or four cents per diluted share.

First quarter liquidity and capital resources:

• Finished the first quarter with a cash balance of $41.7-million, made up of cash and cash equivalents of $18.5-million, and restricted cash of $23.1-million;
• Generated $23.6-million in cash from operating activities, due to the successful start of commercial operations and reflective of the overall low-cost operating structure for the Aurora mine;
• On a consolidated basis, the working capital deficiency (after excluding restricted cash) was $18.8-million at March 31, 2016, reflecting a significant improvement of $27.8-million from Dec. 31, 2015, balances;
• The company made its quarterly debt principal repayment of $6.8-million toward the project loan facility (see news release dated Sept. 3, 2014). Since Sept. 30, 2015, the company has reduced its facility from $160.0-million to $148.9-million.

Financial risk management:

• At March 31, 2016, the company had a total of 32.4 million litres of diesel forward contracts at an average rate of 43 cents per litre, which will settle on a net basis, covering subsequent periods that end December, 2018.
• During the first quarter of fiscal 2016, a new derivative contract for 9.6 million litres of diesel at an average rate of 40 cents per litre, covering the calendar year 2018, was entered into, which will settle on a net basis.

2016 outlook and opportunities

The company believes it will achieve its production guidance for 2016 of approximately 130,000 to 150,000 ounces of gold. Total cash costs (before royalty) for 2016 are expected to be in the range of $487 to $537 per ounce of gold sold. AISC per ounce guidance (assuming a gold price of $1,000 per ounce) remains unchanged and is expected to be between $587 to $637 per ounce. Assuming a gold price of $1,250 per ounce, the resulting increase in the royalty rate from 5 per cent to 8 per cent has an approximate $50-per-ounce impact on the company's AISC guidance.

The company expects to reduce its future mining costs by eliminating reliance on rental equipment as it transitions to a company-owned fleet. Key areas of opportunity for reducing processing costs include a reduction in third party labour costs as the mill stabilizes and technical support is decreased. Savings are expected to result in reagent costs in the leaching and detoxification circuits going forward as operations stabilize.

This news release should be read in conjunction with Guyana's first quarter 2016 financial statements, and management discussion and analysis, on the company's website and on the SEDAR.

Conference call

Participants may join the call on Tuesday, May 10, 2016, by dialling North America toll-free 1-888-231-8191 or 647-427-7450 for calls outside Canada and the United States, and entering the participant passcode No. 85490252.

A live and archived webcast of the conference call will also be available at the company's website under the investors, and events and presentations, section.

A recorded playback of the first quarter 2016 results call will be available until May 17, 2016, by dialling 1-855-859-2056 or 416-849-0833 and entering the call back passcode No. 85490252.

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