Mr. Ralph Shearing reports

TELSON MINING CORPORATION HAS A 9.3% INCREASE IN MILL THROUGHPUT PRODUCTION AT CAMPO MORADO IN Q2, 2018

Telson Mining Corp. has provided the following update for activities at its 100-per-cent-owned Campo Morado mine.

• Total mill throughput in Q2 of 162,500 tonnes, a 9.3-per-cent increase from Q1;
• 11,900 dry metric tonnes of zinc concentrate in Q2, 45.1-per-cent increase from Q1;
• 1,900 dmt of lead concentrate in Q2, 35.7-per-cent increase from Q1;
• 8,600 t of zinc in the zinc concentrate, 53.6-per-cent increase from Q1;
• 600,000 of lead in the lead concentrate, 100.0-per-cent increase from Q1.

Item                     Q1     Q2

Processed tons (kt)   148.7  162.5
Zn concentrate (kdmt)   8.2   11.9
Pb concentrate (kdmt)   1.4    1.9
Zn metal content (kt)   5.6    8.6
Pb metal content (kt)   0.3    0.6
                                                 

Since Telson declared commercial production as of May 15, 2018, mining and milling operations at Campo Morado have run smoothly and continuously while production is steadily increasing toward management's targets.

Underground bulk mining methods have commenced and with the delivery of three recently purchased underground low-profile 30-tonne dump trucks, which were fully paid for with cash generated from concentrate sales, Telson is increasing mill throughput past its current processing rate of approximately 2,200 tonnes per day. The company intends to increase production toward 2,500 tonnes per day over the next several weeks and with some planned modifications to the crushing circuit intends to increase mill throughput past 2,500 tonnes per day, hoping to achieve up to 3,000 tonnes per day by year-end 2018.

Since commencement of commercial production on May 15, 2018, through to July 30, 2018, the Campo Morado mill has produced approximately 9,383 tonnes of zinc concentrates and 1,612 tonnes of lead concentrates processing approximately 124,482 tonnes of mineralized material from the El Largo zone. During this period average grades of concentrate produced were: zinc concentrate -- 44.5 per cent zinc, 410 grams per tonne silver and 1.25 g/t gold, and lead concentrate -- 29 per cent lead, 709 g/t silver and 6.26 g/t gold. Average recoveries achieved were 73.3 per cent zinc, 31.2 per cent lead, 32 per cent silver and 18 per cent gold.

Underground development work during Q2 advanced a total of 1,088 metres, 710 metres (six by five metres) in mineralized material and 378 metres (five by five m) of access development in waste rock. This development includes advancing an incline from the El Largo zone toward the Naranjo zone, which has progressed to within 20 metres of the Naranjo zone. When Naranjo has been reached, a portal will be developed at Naranjo to access the surface after which all production from El Largo, Naranjo and Fish zones will be transported on surface from the new portal reducing haulage time and trucking costs. The company has also dewatered the Fish zone, adjacent to the El Largo zone, and is preparing that zone for production.

Future plans and initiatives

Telson is planning several initiatives to improve the mill processing plant's production and recoveries.

The first initiative will be to purchase and install Jameson flotation cells into the mill process circuit to increase the zinc recovery and increase the zinc concentrate grades. Previous successful testing of Jameson flotation technology in Campo Morado has demonstrated significant improvements in concentrate grades and metal recoveries.

The second initiative will demonstrate the viability of Glencore Technology's Albion Process to potentially increase the recovery of precious metals (gold and silver). The company intends to provide Glencore Technology with bulk samples of Campo Morado mineralization for Albion Process testing, and with positive results, Telson intends to engage Glencore Technology to initiate technical studies for the design and build of the Albion Process equipment for purchase and installation at the Campo Morado mine. There are four Albion Process plants currently in operation with dramatic increases in precious metal recoveries from refractory ore in all existing Albion Process plants, from previous recovery percentages in the low 20s using conventional milling to more than 90 per cent in some cases using Albion Process (please visit the Albion Process website for more information). Telson is targeting for Glencore Technologies to complete testing and have design and costing completed by end of 2018. With successful initial testing and design work completed and subject to securing additional construction capital, Telson is targeting late 2019 to complete installation and commence using Glencore's Albion Process with the intent to markedly increase precious metal recoveries and thereby profitability at Campo Morado. Glencore's Albion Process has also proven to markedly improve base metal recoveries from several mines currently processing with this new technology which could also benefit production at Campo Morado.

"Management is efficiently implementing many improvements at Campo Morado, both to underground mining and mill processing which are substantially reducing operating costs. Equally important are managements plans to increase base metal recoveries and concentrate grades as well as to potentially significantly increase precious metal recoveries with new technologies," states Antonio Berlanga, chief executive officer. "Our well-structured improvements that have been and are currently being implemented at the Campo Morado mine are increasing sales and decreasing operating costs in the short term, but more importantly if Albion Process technology testing proves successful, we plan to transform Campo Morado into a predominately precious metal producer in the mid-term."

About Telson Mining Corp.

Telson Mining is a Canadian-based mining company with two Mexican gold, silver and base metal mining projects.

Telson is currently in production at its 100-per-cent-owned Campo Morado mine in Guerrero, Mexico. Telson acquired Campo Morado in June, 2017, recommenced mining and processing operations in October, 2017, with preproduction from mine development on a trial basis that commenced at an average 1,400 tonnes per day and declared commercial production as of May 15, 2018. Currently the Campo Morado mine is processing approximately 2,200 tonnes per day through the milling facilities.

Qualified persons

This press release was prepared under the supervision and review of Ralph Shearing, PGeol, president and director of Telson Mining, a professional geologist registered in Alberta as a member of the professional association APEGA, and a qualified person as defined by National Instrument 43-101. Data verification by Mr. Shearing includes personal inspection of the Campo Morado mine site, reviewing mining facilities, drill core, underground development, and discussing work programs and results with geology and mining personnel.

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