Mr. Ron Hochstein reports

LUNDIN GOLD INC. REPORTS THIRD QUARTER 2017 RESULTS

Lundin Gold Inc. has released its results for the three and nine months ended Sept. 30, 2017. All amounts in this release are in U.S. dollars unless otherwise indicated.

During the quarter, Lundin Gold ramped up construction at the Fruta del Norte gold project and there are now approximately 800 people at site, including contractors. The company also advanced exploration targets to prepare for drill testing, which is expected to begin later this year.

"We have made a remarkable amount of progress in a short period of time and are well into the construction phase at Fruta del Norte," said Ron Hochstein, Lundin Gold's president and chief executive officer. "We plan to hit hard rock before the end of the year in the underground mine, keeping the critical path on track, and we are making excellent progress on the procurement and design of both the process plant and power line, both of which are key to the advancement of the project."

Highlights

Fruta del Norte

• Mine portals were completed and soft tunnelling is well advanced.
• Key infrastructure at site to support mine development was completed.
• Detailed engineering contracts for the process plant, tailings facility and water management were awarded, and work began on all areas.
• Long-lead time process plant equipment was ordered.
• Engineering, procurement and construction contract for the power transmission line from the Bomboiza substation to the site was awarded.
• Major earthworks activities are progressing and work on the process plant area started.

Exploration

• Targets in preparation for drill testing were better defined, with geochemical sampling and mapping completed on the Barbasco and Puente-Princesa epithermal gold-silver targets within the Suarez pull-apart basin that hosts the Fruta del Norte. Both targets are located approximately seven kilometres south of the project.

                                             FINANCIAL RESULTS
                                      (in thousands, except per share)

                                           Three months ended Sept. 30  Nine months ended Sept. 30
                                                   2017           2016         2017           2016

Net (loss) for the period                      $(16,032)      $(11,785)    $(21,635)      $(38,925)
Basic and diluted (loss) per share                (0.13)         (0.10)       (0.18)         (0.37)

Note: The complete analysis of the Q3 2017 financial results can be found in the mangement's discussion and analysis and financial statements dated Nov. 7, 2017, filed on SEDAR.

The company's net loss in the current quarter is higher compared with the net loss during the third quarter of 2016 mainly due to a derivative loss of $8.3-million from the fair value revaluation of its long-term debt at Sept. 30, 2017. This balance is valued using Monte Carlo simulation valuation models. The key inputs used by the Monte Carlo simulation include: the gold and silver forward curve based on Comex futures, the company's expectation about long-term gold yields, gold and silver volatility, risk-free rate of return, non-performance risk, and production expectations.

The loss in the nine months ended Sept. 30, 2017, is lower compared with that of the nine months ended Sept. 30, 2016, due to the commencement of capitalization of expenses which is offset by a derivative loss from the revaluation of the company's long-term debt.

Liquidity and capital resources

As at Sept. 30, 2017, the company had cash of $63.0-million and a working capital of $66.7-million compared with cash of $8.5-million and a working capital balance of $1.0-million at Dec. 31, 2016. The change in cash was primarily due to proceeds from a project finance package of $300-million with Orion Mine Finance Group and Blackstone Tactical Opportunities of which $150-million has been drawn to date, offset by costs incurred for the development of the project of $67.8-million and exploration expenditures of $4.7-million.

The financing

On May 30, 2017, the company's operating subsidiary, Aurelian Ecuador SA, which holds Fruta del Norte, closed the financing comprising a gold prepay credit facility for $150-million, a stream loan credit facility of $150-million and an offtake agreement. The lenders also committed to participate in future equity financings of the company required to finance the project, in an aggregate amount of not less than $100-million and not more than $150-million, as and when initiated by the company and subject to minimum financing thresholds.

Outlook

The third quarter of 2017 marked the commencement of construction at the Fruta del Norte project. The company's focus now is on advancing the project through to first gold production in 2019. To achieve that goal, the following activities are planned over the next 12 months:

• Completion of all early works activities by the end of the year;
• Completion of soft tunnelling and commencement of underground hard rock development in 2017;
• Advancement of detailed engineering of the process plant, tailings storage facility and site-wide water management into 2018;
• Ordering of remaining process plant equipment and electrical packages and mobile mine equipment in 2017;
• Approval of the Mountain Pass Quarry environmental impact assessment and signing of an exploitation agreement for the quarry to permit the extraction of construction materials in 2018;
• Continuation of earthworks activities, including the clearing of the plant site, construction of the North Access and River Roads, and site preparation for the tailings dam;
• Commencement of concrete work on the process plant in 2018;
• Commencement of construction of the Bomboiza/Fruta del Norte power line in 2018.

During the next several months, the company will also continue to work with its financial advisers to put in place the remaining financing for the construction of Fruta del Norte, including continuing advanced discussions with a syndicate of banks.

A helicopter Z-tipper axis electromagnetic resistivity geophysical survey of the basin and surrounding terrain is planned to take place by the end of 2017. Soil sampling has been completed on most of the company's concessions in the basin, and geological mapping is continuing on selected targets; targets will be prioritized for drilling scheduled to begin before the end of 2017.

Qualified person

The technical information relating to the Fruta del Norte project contained in this news release has been reviewed and approved by Ron Hochstein, PEng, Lundin Gold's president and chief executive officer, who is a qualified person under National Instrument 43-101. The disclosure of exploration information contained in this press release was prepared by Steve Leary, MAusIMM CP (Geo), a consultant to the company, who is a qualified person under National Instrument 43-101.

Full details of the feasibility study can be found in a technical report entitled "Fruta del Norte - NI 43-101 Technical Report on Feasibility Study" which has an effective date of April 30, 2016. The technical report is available for review under the company's profile on SEDAR and on the company's website.

Additional information

The company's consolidated financial statements for the three months and nine months ended Sept. 30, 2017, and related management's discussion and analysis are available on the company's website or under its profile on SEDAR.

About Lundin Gold Inc.

Lundin Gold, headquartered in Vancouver, Canada, is developing its wholly owned Fruta del Norte gold project in southeast Ecuador. Fruta del Norte is one of the largest, highest-grade gold projects currently under construction. The company's board and management team have extensive expertise in mine construction and operations and are dedicated to advancing this project through to first gold production in 2019.

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