Mr. Doug Ramshaw reports

MINERA ALAMOS ANNOUNCES US$25 MILLION CONSTRUCTION FINANCING PACKAGE TERMSHEET EXECUTED FOR CERRO DE ORO GOLD PROJECT; Q1 FINANCIAL RESULTS

Minera Alamos Inc. has concluded discussions with lenders regarding a financing package tailored for the limited capital requirements associated with the planned construction of the Cerro de Oro gold mine that is currently anticipated to begin next year. The company has signed a term sheet for a $15-million (U.S.) loan facility and $10-million (U.S.) royalty that is expected to close on or around July 14 upon signing of definitive documentation as well as board and regulatory approvals.

"We are delighted to have entered into this agreement, which provides a fully funded and single-source solution to meet the capital expenditure requirements for the company's planned new gold mine upon the successful receipt of permits. The low capital cost of the Cerro de Oro project has allowed us to consider less covenant-heavy terms that provide for increased flexibility in the lead up and during construction of our second mine," stated Doug Ramshaw, president, Minera Alamos. "In addition, the term sheet provides the ability to draw down a modest portion of the total package ahead of permit receipt that will support the preconstruction activities planned for Cerro de Oro in 2023. This allows our existing treasury to continue to support operational activities elsewhere, including the drill campaign currently under way and other corporate initiatives."

Key aspects of the financing package are detailed below.

Loan package ($15-million (U.S.)):

• Loan term -- three years;
• Loan upfront fee -- 2 per cent on closing;
• Loan security -- comprising share pledges over the Cerro de Oro and La Fortuna operating subsidiaries;
• Interest charged at 1.25 per cent per month on any drawn amount of the loan;
• Interim financing -- $5-million (U.S.) under the loan facility will be available to draw down immediately following closing to finance prepermit activities related to the Cerro de Oro mine. The remaining $10-million (U.S.) will be available upon receipt of construction permits.

Royalty package ($10-million (U.S.)):

• A 2.75-per-cent net smelter return on all metal production from the Cerro de Oro mine.
• Royalty buyback -- for a period of 30 months postroyalty closing, Minera can buy back 2 per cent of the 2.75-per-cent NSR by delivering a minimum of 3,200 ounces of gold related to the NSR and a payment of $6.3-million (U.S.). In the event Minera exercises the royalty buyback at an earlier date than the expiry date (30 months from closing), a credit of 100 oz of gold per full month will be given against the minimum threshold.
• The royalty holder will retain the option to sell the remaining 0.75 per cent to Minera for $3.7-million (U.S.).
• Minera and all its operating subsidiaries will enter into a purchase and sale agreement for a minimum of 100 per cent of its gold production to be sold at market rates for a period of no less than 36 months from closing.

Closing remains conditional upon the completion of satisfactory technical due diligence, completion of satisfactory documentation, including but not limited to the entering into of the security documents, appropriate legal opinions and any other required conditions that are standard for a facility of this type. Closing is anticipated to take place around July 14, 2023, at which time the interim financing may be drawn with the remaining loan facility and royalty facility available to the company upon receipt of permits.

Operations update

The company continued to focus on development activities at Santana in Q1 in advance of the transition to mining at the Nicho Main zone. Some early material from the Nicho Main zone has been stacked on the pad and further material from the new and much larger deposit is expected to complement ounces from the Nicho Norte starter pit through the rest of the year. This initial material mined from the Main zone pit has been successfully utilized for a new battery of crushing system tests and blasting optimization studies, a path that was very productive in the early days of development of the starter pit.

The company will continue to utilize existing pad capacity for increased mining, stacking and leaching activities while waiting for permit amendment approvals that will allow a substantial new area of pad availability for what is anticipated to be a stronger second half of gold production. As the company prepares to expand its mining activities with its mining contractor, a significant reduction in accounts payable was undertaken in Q1, reducing accounts payable to the lowest level since operations began.

Exploration drilling continues at Santana with a first round of holes drilled into the previously identified Benjamin Hill target now logged with assays pending. The company's drill has been relocated to the Zata target that, despite good surface gold grades from several rounds of sampling, has never been drilled. The company is currently on its second drill hole at Zata and more details and results will be available in future corporate updates.

Selected financial data

The following selected financial data are summarized from the company's unaudited condensed interim consolidated financial statements and related notes thereto for the three months ended March 31, 2023, and the management's discussion and analysis (MD&A) for the three months ended March 31, 2023 (all numbers in Canadian dollars unless otherwise stated). A copy of the financial statements and MD&A is available on SEDAR.

In accordance with the adoption of the amendment to international accounting standard (IAS) 16 Property, Plant & Equipment, Proceeds Before Intended Use, the company is providing revenues and costs of goods sold for the period ending March 31, 2023. A more thorough explanation of this new accounting rule is outlined in the financial statements (note that the comparable prior-year costs of good sold, pursuant to the IFRS accounting rule for their treatment, do not factor in depletion):

• First quarter financials were reflective of the decision to prioritize waste and development activities (see news releases dated Jan. 31, 2023, and May 2, 2023). Revenues totalled $6,784,379 with cost of goods sold amounting to $3,954,831 compared with revenues of $5,160,026 with costs of goods sold of $2,255,305 in the corresponding Q1 2022 (note: reflected in the revenues is an accounting of $5,514,069 of deferred revenue from the quarter ending Dec. 31, 2022. A total of $2,460,659 of quarterly revenue from Q1 2023 is treated as deferred revenue and will be accounted for in Q2 2023 financials).
• Net income of $1,485,884 for the quarter amounted to 0.3 cent/share compared with net income of $1,067,853 or 0.2 cent/share in the corresponding quarter of 2022.
• Cash and cash equivalents totalled $10,200,029 compared with $6,106,610 as of March 31, 2022 ($13,153,828 at Dec. 31, 2022).
• Accounts payable were reduced year on year by $2,315,849 to $1,623,036 as of March 31, 2023 ($3,699,024 as of Dec. 31, 2022).
• Working capital totalled $19,890,807 compared with $15,456,020 as of March 31, 2022 ($18,284,236 at Dec. 31, 2022).

Darren Koningen, PEng, Minera Alamos's chief executive officer, is the qualified person responsible for the technical content of this press release under National Instrument 43-101.

About Minera Alamos Inc.

Minera Alamos is a gold production and development company undergoing the operational start-up of its first gold mine that produced its first gold in October, 2021. The company has a portfolio of high-quality Mexican assets, including the 100-per-cent-owned Santana open-pit, heap-leach mine in Sonora that is currently going through its operational ramp-up. The 100-per-cent-owned Cerro de Oro oxide gold project in northern Zacatecas has considerable past drilling and metallurgical work completed with plans to enter the permitting process. The La Fortuna open-pit gold project in Durango (100 per cent owned) has a robust and positive preliminary economic assessment (PEA) completed and the main federal permits in place. Minera Alamos is built around its operating team that together brought three mines into successful production in Mexico over the past 13 years.

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