Mr. Michael Hudson reports

MAWSON'S SUBSIDIARY SXG PROVIDES GEOLOGICAL UPDATE FOR THE SUNDAY CREEK PROJECT

Mawson Gold Ltd. subsidiary Southern Cross Gold Ltd. (SXG) has provided a geological update with an outline of vein morphology and continuity at its 100-per-cent-owned Sunday Creek project in Victoria, Australia. SXG is an Australian Securities Exchange-listed company owned 51 per cent by Mawson.

Highlights:

• Geological update focusing on vein morphology and continuity at the 100-per-cent-owned Sunday Creek project in Victoria to provide background for an upcoming exploration target;
• Continuity of vein sets and grades are described in three dimensions across multiple data sets including:
  • Structural oriented drill core data, quality control data and geostatistics that demonstrate a low coefficient of variation;
  • Geological likeness;
  • Predictability of extension drilling;
  • 50 years of historic mining records and drilled continuity below mined areas.
• A total of 42 mineralized vein set shapes have been created for Sunday Creek. The mineralized vein sets are typically between five and 30 metres wide, 20 to 100 m in strie, and currently defined vertically down to one kilometres depth and up to 570 m in depth extent on an individual vein set basis.

Mawson owns 93.75 million shares of SXG (51 per cent), valuing its stake at $88.1-million (Australian) ($78-million) based on SXG's closing price on Jan. 22, 2024, AEST.

Michael Hudson, Mawson interim chief executive officer and executive chairman, states: "The company will soon release a maiden exploration target for the Apollo and Rising Sun areas at Sunday Creek. This update describes vein morphology and geological and vein continuity to provide geological context for the exploration target.

"The observations made here are important because, while geological continuity is critical when constructing a mineral deposit model, in most cases it is the continuity of the grade of the mineralization that will determine the economic nature of a deposit."

As is standard in industry, Southern Cross Gold is applying multiple data sets to build the Sunday Creek geological and mineralization model. These are described below.

Geostatistics

A total of 42 mineralized vein set shapes have been created for Sunday Creek. Wireframes were created in Leapfrog Geo using a threshold of one gram per tonne gold over two m. Modelling consistently shows the vein sets have a higher-grade core with broader lower-grade halos. The company, along with leading global consultants, are preparing grade variography with volumes determined by a strong understanding of geological and grade continuity, trends and other supporting information. The mineralization model provides the first geostatistical summary of the project.

Coefficient of variation

The coefficient of variation (CV) is the ratio of the standard deviation to the average of the assay results. The lower the CV, the less variable and erratic the distribution of the mineralization is, and therefore it is easier to model.

In Apollo, where sufficient drill density and drill spacing are present, geostatistical assessment provides validity of the geological shapes. Within Apollo, the average of all the vein sets has a CV below 1.5 when applied to one m composite data and an average CV of less than two for raw assays. Rising Sun requires further drilling before similar calculations can be made. The CV at Apollo implies both a strong understanding of the geological controls on mineralization, correct subdomaining of high-tenor material and the predictability of high-grade mineralization within these shapes.

Stereonets

All diamond drill core drilled by Southern Cross Gold is orientated. Orientation data can place structures measured in drill core in 3-D space. A measure of confidence is assigned to ensure only quality data are utilized and drill bias, or inaccurate measurements, do not materially influence the interpretation. Combined with triangulation of intercepts (minimum three points on a plane to determine an orientation), high confidence in structural continuity of vein sets is maintained. This allows for major trends and critical controls on high-grade trends or linking features to be identified.

Geological controls on mineralization (structural, chemical, stratigraphic) exist in every ore deposit and Sunday Creek is no different. Mineralization is structurally controlled, with increased mineralization associated within the bleaching around and within the intrusive sequence. Early alteration and sulphide (pyrite) mineralization exploited the vesicular/amygdaloidal nature of the pervasively altered/mineralized dike and the brecciated areas, and forms east-west-trending pyrite veinlets. Stereonet data support this observation and show pyritic veins parallel to the east-west structural host and predates the higher-tenor north-northwest gold-antimony mineralized vein sets.

Stereonet data also demonstrate that gold-antimony mineralization is dominantly hosted within zones of subvertical, brittle-ductile norht-northwest-northwest-striking shear veins and associated veins, containing visible gold, quartz, stibnite, occasional fibrous sulphosalts and minor ferroan carbonates infill. The veins have an associated selvedge of disseminated sulphides in the form of arsenian pyrite, pyrite and arsenopyrite. The mineralized vein sets are typically between five and 30 m wide, 20 to 100 m in strike, and currently defined vertically down to one km depth and up to 570 m in depth extent on an individual vein set basis. These zones repeat every 10 to 20 m within the Apollo and Rising Sun areas with 42 vein sets currently defined to date.

When observed from above, the altered sediment and dike host resembles the side rails of a ladder, where the subvertical mineralized vein sets are the rungs that extend from surface to depth.

Quality control data

Drilling recovery at Sunday Creek is excellent (99.2-per-cent average core recovery). All samples are oriented diamond core, predominately HQ core size. Quality control data are routinely acquired. Standards are inserted at regular intervals and show appropriate consistency. Both field duplicates (quarter core) and laboratory duplicates (from the LM5 pulverizer) show good consistency, implying homogenization at both the core and pulp sampling stages with low variability. Additional screen fire assay data compare favourably with fire assay data showing the homogenization of mineralization, and low nugget effect after pulverization.

Predictability

The company is now able to plan drill holes and predict, with a high degree of confidence, the vertical and lateral extents of high-grade mineralization within the altered bleached sediment and dike host. This is best evidenced at the Rising Sun area where its drilling over the last six months has expanded the strike and footprint of these vein sets.

Geological likeness

A strong component of the geological domaining of vein sets and high-grade individual veins relies on the geological similarities of the interval; similar mineralogy, vein types and textures are critical to identifying the domain, as well as consistent orientations ensuring that assays are not simply being linked together in a coincidental manner.

Old mining areas

Hard-rock mining at Sunday Creek commenced in the 1870s and continued until after the First World War. Fifty years of historic mining records and remanent stoping highlight similar observations of the east-west host and continuity of the northwst veins set structures. Whitelaw (1899) describes the ladder structure of the host structure rails and vein set rungs as observed today:

"Sulphide in large and oxide in small quantities occur in connexion (sic) with numerous quartz reefs crossing a strong well-defined diorite dike, which cuts diagonally through the enclosing Silurian slates and sandstones of Sunday Creek, eight miles east of Kilmore. The dike has an average width of 80 feet, it strikes E 100 N. It has been traced on the surface for over two miles uninterruptedly, is very fine-grained, contains a large amount of arsenial (sic) and iron pyrites disseminated throughout, and towards the north is somewhat porphyritic in structure, passing over into aphanitic porphyry. It is generally a greenish colour.

"Cutting through the dike in a direction N100W, at intervals every few yards occur mineral reefs composed mostly of quartz, antimony, pyrites and breccias of the adjacent country. Of these reefs, every one that has been exploited has proved auriferous."

Additionally, historic mining stope orientations are consistent with surrounding orientated drill core and mineralized intercepts. Drilled mineralization at Apollo coincides spatially with historic stopes and development. Lidar surface mapping also shows the consistent mining of the mineralized rungs in a northwest direction across the 10 km trend of historic surface workings at Sunday Creek.

Preresource studies

SRK Consulting (Australasia) Pty. Ltd. has been engaged to work with in-house staff for continuing modelling assistance and the eventual preparation of a mineral resource estimate, consistent with the requirements of the 2012 edition of the JORC Code.

In-House and external expertise

Southern Cross management and board have deep internal technical experience and the company is led by those with who have made multiple discoveries which have advanced to mining across the globe over the last 30 years.

The SXG board is chaired by Tom Eadie, a seasoned explorer with numerous discoveries and capital market successes. Likewise, David Henstridge is an industry veteran who has dedicated his career to mineral discovery and the capital markets. Georgina Carnegie has a long career in mining and finance and provides strong strategic and governmental advice.

Management is led by Mr. Hudson, managing director, who has over 30 years of mine and exploration experience with multiple gold, base metal and rare earth element mineral discoveries. Lisa Gibbons, general manager, has been involved with multiple gold discoveries with North Flinders Mines, Normandy and Newmont in Australia. Kenneth Bush, exploration manager, is an experienced (greater than 10 years) exploration and mine geologist specializng in 3-D geological and structural modelling. He has worked extensively in Victoria on some of the highest-grade gold mines in the world, including Costerfield and Fosterville. The company also employs several experienced geological and geotechnical staff, augmented by highly experienced geological consultants.

About Sunday Creek

History

The Sunday Creek deposit is a high-level orogenic (or epizonal) deposit. Small-scale mining has been undertaken in the project area since the 1880s continuing through to the early 1900s. Historical production occurred with multiple small shafts and alluvial workings across the existing permits. Past production at the Sunday Creek prospect is reported as 41,000 ounces gold at a grade of 33 g/t gold. Larger historic workings along the trend from west to east include Christina, Golden dike, Rising Sun and Apollo.

Regional geology

Sunday Creek occurs with the Melbourne zone of the Lachlan geosyncline, in sequences folded and thrust-faulted by the Late Devonian Tabberabberan orogeny. The regional host to the Sunday Creek mineralization is an interbedded turbidite sequence of siltstones, mudstones and minor sandstones, metamorphosed to subgreenschist facies and folded into a set of open northwest-trending synclines and anticlines.

Structural setting and local geology

Intruded into the sedimentary sequence is a series of intermediate monzodiorite-diorite dikes and breccias on an east-west trend. The Sunday Creek dikes have highly variable textures and compositions with the earliest emplaced aphanitic varieties emplaced along thin fracture sets. These fine-grained dikes locally grade into porphyritic to massive varieties as the thickness of the dikes increases and brecciate in areas of complexity or in proximity to fold hinges.

Large-scale thrusts subparallel to the northwest-trending structural grain, dislocate the dike system and an array of subvertical extension veins form subparallel to the bedding trend and orthogonal to the intruded dike sequence. Veining is focused within areas of high-competency contrast, such as the intruded dike and surrounding alteration, fold hinges, and areas of structural complexity.

Alteration

Distally a regional chlorite alteration weakly pervades the sediments, with a change in mica composition from phengitic to muscovitic mica approaching mineralization, an increase in carbonate spotting and cementation and proximal to the dike a very intense texturally destructive alteration of sericite-carbonate-silica bleaching of the sediments.

Technical background and qualified person

The qualified person, Mr. Hudson, executive chairman and a director of Mawson Gold, and a fellow of the Australasian Institute of Mining and Metallurgy, has reviewed, verified and approved the technical contents of this release.

Analytical samples are transported to the Bendigo facility of On Site Laboratory Services, which operates under both an ISO 9001 and NATA quality systems. Samples were prepared and analyzed for gold using the fire assay technique (PE01S method; 25-gram charge), followed by measuring the gold in solution with flame atomic absorption spectroscopy equipment. Samples for multielement analysis (BM011 and overrange methods as required) use aqua regia digestion and inductively coupled plasma mass spectrometry analysis. The quality assurance/quality control program of Southern Cross Gold consists of the systematic insertion of certified standards of known gold content, blanks within interpreted mineralized rock and quarter core duplicates. In addition, On Site inserts blanks and standards into the analytical process.

Mawson considers that both gold and antimony that are included in the gold equivalent calculation have reasonable potential to be recovered at Sunday Creek, given current geochemical understanding, historic production statistics and geologically analogous mining operations. Historically, ore from Sunday Creek was treated on site or shipped to the Costerfield mine, located 54 km to the northwest of the project, for processing during the First World War. The Costerfield mine corridor, now owned by Mandalay Resources Ltd., contains two million ounces of equivalent gold, and in 2020 was the sixth highest-grade global underground mine and a top five global producer of antimony.

SXG considers that it is appropriate to adopt the same gold equivalent variables as Mandalay Resources in its Mandalay technical report, 2022, dated March 25, 2022. The gold equivalence formula used by Mandalay Resources was calculated using recoveries achieved at the Costerfield property brunswick processing plant during 2020, using a gold price of $1,700 (U.S.) per ounce, an antimony price of $8,500 (U.S.) per tonne, and 2021 total year metal recoveries of 93 per cent for gold and 95 per cent for antimony.

Certain information in this announcement that relates to historic mining is extracted from the independent geologist's report, titled "Independent Geologists Report Southern Cross Gold," dated March 16, 2022, which was issued with the consent of Terry C. Lees. The report was released as an announcement to ASX on May 12, 2022, and is available on the ASX website under code SXG. The company confirms that it is not aware of any new information or data that materially affect the information related to exploration results included in the original market announcement. Certain information in this announcement also relates to prior drill hole exploration results, which are available to view on the SXG website.

About Mawson Gold Ltd.

Mawson Gold has distinguished itself as a leading Nordic exploration company. Over the last decades, the team behind Mawson has forged a long and successful record of discovering, financing and advancing mineral projects in the Nordics and Australia. Mawson holds the Skelleftea North gold discovery and a portfolio of historic uranium resources in Sweden. Mawson also holds 51 per cent of Southern Cross Gold, which owns or controls three high-grade, historic epizonal goldfields covering 470 square km in Victoria, Australia, including the exciting Sunday Creek Au-Sb discovery.

About Southern Cross Gold Ltd.

Southern Cross Gold holds the 100-per-cent-owned Sunday Creek project in Victoria and Mt Isa project in Queensland, the Redcastle and Whroo joint ventures in Victoria, Australia, and a strategic 10-per-cent holding in ASX-listed Nagambie Resources Ltd., which grants SXG a right of first refusal over a 3,300-square-kilometre tenement package held by NAG in Victoria.

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