Mr. Charles Desjardins reports

RIO TINTO TO DRILL ON PISTOL BAY'S C-5 URANIUM PROPERTY, SASKATCHEWAN

Rio Tinto Exploration Canada Inc. has informed Pistol Bay Mining Inc. that it is continuing with its exploration program on the 2,500-acre (1,016-hectare) C5 uranium property in the Athabasca basin in Northern Saskatchewan.

Rio Tinto intends to drill between four and six diamond drill holes for a program total of approximately 2,600 metres, targeting uranium mineralization at the unconformity between the Athabasca basin sediments and the older basement rocks, and in the basement itself. The C5 property adjoins the Wheeler River property, controlled by Denison Mines Corp. It lies 4.5 kilometres north of the Phoenix uranium deposit, five kilometres northeast of the Gryphon uranium deposit and 2.6 kilometres northeast of the 489 uranium zone.

The C5 property, together with the C4 and C6 claims, is under option to Rio Tinto, which has earned a 75-per-cent interest, and has previously announced its intention to exercise the further option to acquire a 100-per-cent interest by paying Pistol Bay $5-million within five years of Dec. 31, 2014, and granting Pistol Bay a 5-per-cent net profit interest (see Pistol Bay news release of Feb. 16, 2015). Rio Tinto has, to date, completed 12 diamond drill holes totalling 6,104 metres on the C5 property, and carried out a gravity survey and a DC resistivity. The 2017 diamond drilling program is scheduled to commence on Jan. 20.

Uranium mineralization in the Athabasca basin is spatially associated with the unconformity where the Athabasca sandstones rest on top of older basement rocks. The unconformity is approximately 400 metres below surface in the area of the C4, C5 and C6 properties. The highlight of Rio Tinto's previous programs on C5 is diamond drill hole 14CBK003, which intersected 0.054 per cent triuranium octoxide over a core length of 1.5 metres, including 0.071 per cent U3O8 over 0.5 metre. Core recovery was approximately 50 per cent, indicating that the assay does not accurately reflect the uranium content of the rock. In addition, diamond drill hole 14CBK0005, 50 metres to the northeast of 14CBK003, intersected 0.041 per cent U3O8 across a core length of 0.32 metre, just below the unconformity, and 0.022 per cent U3O8 across a core length of one metre, five metres below the unconformity. These results were previously disclosed in a Pistol Bay news release on June 4, 2014.

The C4, C5 and C6 properties adjoin the 11,720-hectare Wheeler River property of Denison Mines (60 per cent), Cameco Corp. (30 per cent) and JCU (Canada) Exploration Co. (10 per cent). Wheeler River includes the newly (2008) discovered Phoenix zone, with an indicated mineral resource of 70.2 million pounds of U3O8 grading 19.13 per cent, plus an inferred mineral resource of 1.1 million pounds of U3O8 at a grade of 5.8 per cent. The Gryphon zone contains an inferred resource of 43 million pounds of U3O8 at a grade of 2.3 per cent. The 489 zone is at an early stage of exploration. It has reported drill intercepts of 0.13 per cent U3O8 over 5.5 metres and 0.46 per cent U3O8 equivalent (radiometric estimate) over 1.5 metres.

The C4, C5 and C6 properties are situated approximately midway between the former producing Key Lake mine and the currently producing McArthur River mine of Cameco (70 per cent) and AREVA (30 per cent). McArthur River has produced, to the end of 2015, a total of 287.6 million pounds of U3O8. It has reserves of 336.5 million pounds at 116.89 per cent U3O8 measured, plus indicated mineral resources of 5.6 million pounds at 3.8 per cent U3O8, and an inferred mineral resource of 58.6 million pounds at 7.72 per cent U3O8. With a total endowment of over 688 million pounds, McArthur River is the largest high-grade uranium mine in the world (Cameco's annual and quarterly reports).

The C4, C5 and C6 properties are road accessible, an important feature that allows exploration proceeds to be used much more effectively than more remote, fly-in projects. The 75-kilometre all-weather haul road from the McArthur River mine to Cameco's Key Lake mine/mill passes approximately five kilometres from the properties, and there is a network of bush roads or trails that can be used by four-wheel-drive vehicles.

Technical material in this news release has been prepared and/or reviewed and approved by Dr. Colin Bowdidge, PhD, PGeo, a qualified person as defined in National Instrument 43-101. Uranium analyses quoted in this news release were performed for Rio Tinto by SRC Geoanalytical Laboratories in Saskatoon, using ICP-MS (inductively coupled plasma-mass spectrometry). The geometry of the mineralized intervals quoted here is not known, and no estimate of true widths has been made.

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