Mr. Glen Sandwell reports

TAHUEHUETO UNDERGROUND DEVELOPMENT EXPOSES NEW MINERALIZATION ALONG PERDIDO STRUCTURE

Telson Mining Corp. has provided a development update and significant assay results from underground development at its Tahuehueto mine development and construction project, Durango state, Mexico.

Highlights

Tahuehueto underground development along the major mineralized structure, El Perdido, has now been extended approximately 150 metres along strike to the northeast from the Level 12 access decline. The first 60 metres of this development were designed to prepare reserves identified by previous drilling for mining, however, the development drift is being extended in continuous mineralization beyond known reserves/resources and to date has exposed approximately an additional 100 metres of continuous mineralization beyond the know drilling. Channel sampling results received to date within a portion of this development are presented in the tab. Additional channel sampling assay results within this new development mineralization will be disclosed when assay results are received by the company.

    
                      ASSAYS                       

Width   Au g/t   Ag g/t   Cu %   Pb %   Zn %   AuEq g/t  

6.74      3.80       53   0.42   2.42   5.21       9.59  
4.40      5.39       62   0.46   3.01   8.50      13.69  
3.55      8.61       35   0.12   1.39   0.88      10.48  
6.77      5.36      109   0.25   0.27   2.38       8.65  
3.03      5.27       54   0.14   0.27   2.29       7.69  
2.00      5.54       42   0.12   2.17   6.18      11.17  

Gold equivalent calculation 

Metal prices used in U.S. dollars -- Au $1,240, Ag $14.20, 
Cu $2.80/pound, Pb 91 cents/lb, Zn $1.09/lb.

Formulas

First calculate a metal factor: for base metals (gold 
price/31.1 g/troy oz) divided by (base metal price 
multiplied by 2.2 kilograms divided by pounds multiplied by 
10 is equal to the base metal factor.

For silver 

Metal factor: gold price/silver price.

AuEq grade is the gold grade plus (Ag grade divided by Ag 
factor) plus (Cu grade divided by Cu factor) plus (Pb 
grade divided by Pb factor) plus (Zn grade divided by Zn 
factor).
 

All the samples were submitted to SGS De Mexico SA de CV's independent laboratory located in Durango City, Mexico. Assay methods utilized were GE_FAA313 and GE_ICP14B for gold and silver respectively with overlimits followed up with GO_FAG303, multielement GE_ICP14B for lead and zinc with overlimits assayed with GO_ICP90Q. Additional detail on assay methodology used can be found on SGS website.

2018 preproduction summary

• Preproduction mining produced approximately 37,711 tonnes of ore with average grades of 3.86 g/t gold, 43.6 g/t silver, 3.92 per cent zinc, 0.24 per cent copper and 2.10 per cent lead.
• Approximately 818 tonnes of lead concentrate produced from preproduction was sold during with average grades of 82.22 g/t Au, 878.72 g/t Ag, 41.03 per cent Pb and 2.50 per cent Cu for approximate gross proceeds of $3.41-million (U.S.).
• One thousand two hundred forty-four tonnes of zinc concentrate produced from preproduction were sold during the 2018 fiscal year with average grades of 49.38 per cent Zn, 91.95 g/t Ag and 6.92 g/t Au for approximate gross proceeds of $1.41-million (U.S.).

Mine construction and development summary

Telson advanced a total of 1.44 km of underground development, 365 metres within ore which supplied the preproduction toll milling feed and 1,074 metres in waste preparing the mine for future commercial production. Development included the level 12 decline, the El Perdido development drift, El Creston development drift, the Haulage level portal and the main access decline for level 20.

Mill construction, although somewhat behind schedule from unexpected construction delays, is progressing with concrete foundations nearing completion. Steel structures are currently being erected to house the flotation and filtration equipment while grinding and crushing areas are also under construction. Preparation of the mine laboratory and camp facilities is nearing completion. The water pumping system is under construction in its first stage with the access road completed and pumping stations sites cleared.

For accounting purposes, any sale proceeds from preproduction prior to the company declaring commercial production are considered directly attributable toward advancing those assets to the condition necessary for them to be capable of operating in the manner intended by management, therefore these are capitalized as a reduction of mineral interest and development assets.

About Telson Mining Corp.

Telson Mining is a Canadian-based mining company with two Mexican gold, silver and base metal mining projects. Effective May 15, 2018, Telson declared commercial production at its 100-per-cent-owned Campo Morado mine. Telson is currently producing zinc and lead concentrates with gold, silver and copper as byproducts.

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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