Mr. Frank Basa reports

GRANADA GOLD MINE ANNOUNCES LETTER OF INTENT FROM DRA AMERICAS INC.

Granada Gold Mine Inc. has entered into a letter of intent (LOI) with DRA Americas Inc., a subsidiary of DRA Global, to act as a technical adviser in the development of the Granada gold project near Rouyn-Noranda, Que.

The LOI outlines a multiphase process involving DRA's participation in the evaluation of two options for the company to have its own mill to process ore from the Granada deposit and for the eventual design, construction, financing and operation of the mill.

The two mill options to be evaluated are: (1) a preconcentration ore sorting facility of up to 500 dry tonnes per hour (tph) located in Quebec with a 50 dry tph gold processing facility located in Ontario; and (2) a gold processing facility located in Quebec.

These two options were not reviewed or assessed in the company's 2014 prefeasibility study, which proposed to use a custom milling arrangement with a third party to process ore from open pits at the Granada deposit (see below for technical report details).

In addition to a technical study by DRA, Concentrate Capital Partners Ltd. (CCP), an independent advisory firm to which DRA is a technical partner, will investigate a build, own, operate, transfer (BOOT) financing solution as well as other financial options for the plant, in terms of which CCP will be responsible for working with Granada to develop an optimal financing structure and raise the requisite financing to complete the Granada project, which may include a capital investment by CCP.

DRA and CCP's work will comprise several phases that can be progressed in parallel, culminating in a final technical and financial proposal to be provided to the company in May, 2017, including details of the feasibility study (FS) to be completed and an optimal financing strategy to complete the FS. The planned phases are:

• Completion of a techno economic trade-off study (TOS) comparing the two options from a financial perspective, with Granada Gold's assistance;
• Completion of final CCP due diligence regarding the project;
• Agreement on the scope and terms of the FS;
• Determination of the level of investment from CCP in relation thereto;
• Agreement on the terms of a potential BOOT solution and its proposed implementation.

As the preferred technical adviser to the project, DRA has the capability to remain involved throughout the development process from the management and completion of a feasibility study to the final design and construction of the proposed plant, and the operation of a completed plant on a contract basis.

"We wish to reiterate DRA's keen interest in the Granada gold project and look forward to working with the company to progress the project," said Phildi Scholtz, senior vice-president, projects, DRA Americas.

Frank Basa, chief executive officer of Granada Gold Mine, stated: "We are pleased to be working with DRA, which brings considerable experience in the design, construction and operation of plants over the full range of precious and base metals as well as coal, iron ore and diamonds. DRA has expertise and knowledge not only in the selection of the best mill option but also in pit design and optimization and mine plans, as well as extensive operations capabilities and track record. DRA's participation as a technical adviser to the project represents an important step forward towards achieving our goal of mining gold from the deposit for the benefit of our shareholders."

Technical report

In 2014, the company published a plan to initially mine and process high-grade, open-pit ore averaging 4.24 grams per tonne to produce approximately 25,000 ounces per year over three years. This rolling start initial phase of reduced-scale mining with ore to be shipped for processing at local mills was outlined in the National Instrument 43-101 technical report prefeasibility study (PFS) -- "Phase I -- open-pit Granada gold project, Rouyn-Noranda, Que.," published June 19, 2014, effective date May 6, 2014. Claude Duplessis, Eng, Gilbert Rousseau, Eng, Jonathan Gagne, Eng, and Martin Stapinsky, PGeo, MSc, PhD, are the qualified persons in accordance with National Instrument 43-101.

Qualified person

Frank J. Basa, PEng, president and chief executive officer of Granada, is a qualified person in accordance with National Instrument 43-101, and has reviewed and approved the contents of this news release.

About Granada Gold Mine Inc.

Granada Gold Mine (formerly Gold Bullion Development Corp.) is developing the Granada gold property near Rouyn-Noranda, Que. The property includes the former Granada gold mine which produced more than 50,000 ounces of gold in the 1930s before a fire destroyed the surface buildings. The Cadillac trend has been the source of more than 50 million ounces of gold produced in the past century on a line running from Val d'Or to Rouyn-Noranda. The company has obtained all necessary permits for the initial mining phase known as the rolling start, for which stripping has already begun, and has been conducting exploration drilling in order to expand the reported mineral resource for the property.

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