Mr. Stephen Kenwood reports

MAJESTIC GOLD CORP. REPORTS 2017 Q1 RESULTS

Majestic Gold Corp. is releasing its financial and operational results for the first quarter ended Dec. 31, 2016. This release should be read in conjunction with the company's unaudited condensed consolidated interim financial statements, and the associated management discussion and analysis (MD&A), for the same period, which are available on SEDAR and the company's website. The following financial results are expressed in U.S. dollars unless otherwise stated.

Overview:

• Gold production from the Songjiagou gold mine for the three months ended Dec. 31, 2016, was 5,841 ounces, compared with 7,213 ounces produced for the comparative period. The decrease in gold production in the current period over the comparative period is primarily attributed to approximately 30,000 tonnes of higher-grade fine fraction material that was processed in the comparative period.
• Tonnes milled for the three months ended Dec. 31, 2016, were 413,310 tonnes, with an average head grade of 0.48 gram per tonne (g/t), compared with 418,550 tonnes milled, with an average head grade of 0.58 g/t, for the comparative period. The lower average head grade for the current period over the comparative period is due to the processing of approximately 30,000 tonnes of higher-grade fine fraction material at the mill in the comparative period.
• Gold sales revenue for the three months ended Dec. 31, 2016, was $4.1-million from the sale of 3,119 ounces at an average realized gold price of $1,280 per ounce, compared with gold sales revenue for the comparative period of $4.4-million from the sale of 3,537 ounces at an average realized gold price of $1,233 per ounce. The 8-per-cent decrease in gold sales revenue for the current period is due to a 12-per-cent drop in the number of ounces and partially offset by a 4-per-cent increase in the average realized gold price over the comparative period.
• Cash costs were $854 per ounce and production costs were $1,009 per ounce for the three months ended Dec. 31, 2016, compared with cash costs of $1,033 per ounce and production costs of $1,284 per ounce for the comparative period. The decrease in both the cash and production costs for the current period over the comparative is due primarily to a lower volume of waste material produced at mine and thereby reducing waste removal costs.
• General and administrative (G&A) expenses were $684,746 for three months ended Dec. 31, 2016, compared with $707,370 for the comparative period.
• On Dec. 21, 2016, the company closed a non-brokered private placement financing of 72.5 million units at 13.5 Canadian cents per unit for total subscription proceeds of $9,787,500 (Canadian). Each unit consisted of one common share and one common share purchase warrant entitling the holder to purchase an additional common share at 15.5 Canadian cents for a period of two years after the closing. The 72.5 million units were issued in January, 2017. Proceeds from the private placement will be used to partially finance construction of housing for inhabitants of two villages that are being relocated due to their close proximity to the Songjiagou open-pit operation and for general working capital purposes;
• During the current period, the company began development on the Songjiagou North property.

   
                                  FINANCIAL INFORMATION

                                               Three months ended      Three months ended
                                                    Dec. 31, 2016           Dec. 31, 2015
Operating data                                                      
Gold produced (oz)                                          5,841                   7,213
Gold realized net of smelting fees (oz)                     5,408                   6,976
Gold sold (oz)                                              3,119                   3,537
Average realized gold price ($/oz sold)               $     1,280             $     1,233
Total cash costs ($/oz sold) (1)                      $       854             $     1,033
Total production costs ($/oz sold)  (1)               $     1,009             $     1,284
All-in sustaining costs per ounce ($/oz sold) (1)     $     1,053             $     1,219
Financial data                                              
Total revenues                                        $ 4,078,820             $ 4,444,460
Gross profit (2)                                          933,189                 (96,178)
Adjusted EBITDA (1)                                       811,703                 165,067
Net profit (loss)                                         319,700                (662,080)
Net profit (loss) attributable to shareholders            146,491                (548,999)
Basic and diluted (loss) per share                    $      0.00             $     (0.00)

                                                    Dec. 31, 2016          Sept. 30, 2016
Balance sheet 
Cash and cash equivalents                             $ 5,274,060             $ 9,037,258
Total assets                                           97,990,089              93,305,139
Total debt                                             32,525,305              33,038,286

(1) See additional non-IFRS (international financial reporting standards) financial 
measures in the company's MD&A. EBITDA means earnings before interest, taxes, 
depreciation and amortization.

(2) Gross profit represents total revenues, net of cost of goods sold.

   
                           PRODUCTION RESULTS
                                               Three months ended      Three months ended
                                                    Dec. 31, 2016           Dec. 31, 2015
Production data
Tonnes mined                                              437,022                 540,605
Tonnes milled                                             413,310                 418,550
Head grade (g/t)                                             0.48                    0.58
Mill recovery                                               89.8%                   91.0%
Gold produced (oz)                                          5,841                   7,213
Gold realized, net of smelting fees (oz)                    5,408                   6,976

All technical information contained in this news release has been reviewed and approved by Stephen Kenwood, PGeo, who is a director of the company and a qualified person under the definitions established by NI 43-101.

About Majestic Gold Corp.

Currently focused solely in China, Majestic Gold is a British Columbia-based company engaged in commercial gold production at the Songjiagou gold mine in eastern Shandong province, China.

We seek Safe Harbor.