Mr. Michael Hudson reports

MAWSON'S SUBSIDIARY SXG OUTLINES SIGNIFICANT EXPLORATION TARGET FOR THE SUNDAY CREEK PROJECT

Mawson Gold Ltd. subsidiary Southern Cross Gold Ltd. (SXG) has published its maiden gold and antimony exploration target at its flagship 100-per-cent-owned Sunday Creek project in Victoria, Australia. The exploration target has been developed to demonstrate the scale and high-grade gold-antimony potential of the Sunday Creek project that has been drilled over the last year and is the first step in the pathway to a resource.

Highlights:

• The exploration target for the Sunday Creek project covers only 620 m, or about 50 per cent of the known strike of the main drill area, and encompasses the Rising Sun and Apollo areas. This target area represents less than 10 per cent of the 11-kilometre strike of the dike host across the project.
• The estimated range of potential mineralization for the exploration target is (also see the table entitled "Sunday Creek exploration target for Apollo and Rising Sun at the Sunday Creek project"):
  • 4.4 million tonnes to 5.1 Mt grading at 7.2 grams per tonne (g/t) gold equivalent (AuEq) to 9.7 g/t AuEq for one million ounces to 1.6 Moz AuEq.

This is based on 45,971 metres of orientated diamond drilling by SXG, and previously Mawson, and 64 aircore, reverse circulation and unoriented diamond drill holes for 5,599 m. The potential quantity and grade of the exploration target is conceptual in nature and therefore is an approximation. There has been insufficient exploration to estimate a mineral resource and it is uncertain if further exploration will result in the estimation of a mineral resource. The exploration target has been prepared and reported in accordance with National Instrument 43-101:

• Drilling with four rigs within, along strike and down dip from Rising Sun and Apollo continues;
• Mawson owns 93.75 million shares of SXG (51 per cent), valuing its stake at $87.7-million (Australian) ($77.9-million) based on SXG's closing price on Jan. 23, 2024.

Exploration target

The approximate exploration target ranges are listed in the table entitled "Sunday Creek exploration target for Apollo and Rising Sun at the Sunday Creek project."

Michael Hudson, Mawson interim chief executive officer and executive chairman, states: "Sunday Creek is a rare high-grade discovery. This exploration target is the first early opportunity to demonstrate the scale and high-grade potential as suggested by the last year of successful drilling. Notably, the exploration target is constrained to the current drill footprint at Apollo and Rising Sun, as they contain sufficient drilling to determine continuity and infer grade ranges. This represents approximately half the strike of the main drill area and significant potential exists to increase the size of the exploration target with high-grade drill results drilled for up to 450 m beyond the exploration target area. These are early days and we expect further drilling will continue to expand the multimillion-ounce potential and high-grade tenor of Sunday Creek."

Basis for exploration target

The tonnage and grade are estimates based on continuity of mineralization defined by exploration diamond drilling results (previously reported, including relevant sections and plans) within proximity to the intrusive main structure zone and bleached sediments. Strike extents in the lower-case model are minimized to half drill spacing (approximately 14 metres) or to locally restrictive geology (that is, bounds of bleached sediment or dike), whichever was smaller. The upper-case model strike extents were extended to the average vein strike (typically around 40 m) or to geological constraints, whichever was smaller.

The exploration target was limited to a vertical depth of 1,003 m below surface (minus-710 m RL (relative level)), limited by the deepest mineralization defined to date within the main structure dike/dike breccia and bleached sediments within Rising Sun. Drilling indicates Rising Sun could contain higher gold and antimony grades than Apollo and Apollo Deeps.

A series of subvertical lodes within a 620 m wide corridor has been outlined at Rising Sun and Apollo, with mineralization remaining open to the east, west and also to depth.

Only the Rising Sun and Apollo areas were considered for the exploration target as they contain sufficient drilling to suggest continuity and infer grade ranges. The exploration target is based on the interpretation of the following geology and mineralization data that have been collated as of the date of this announcement:

• 116 structurally oriented drill holes for 45,971 m at the main Sunday Creek area that have been drilled by Mawson/SXG;
• 64 aircore, reverse circulation and unoriented diamond drill holes for 5,599 m that were drilled historically on the project;
• 26,513 drill hole assay results;
• 353 density measurements on mineralized diamond drill core -- a specific gravity (SG) of 2.75 grams per cubic centimetre was applied to the exploration target;
• Surface geological mapping, costean data and diamond core geological logging;
• Detailed lidar (light detection and ranging) imagery;
• Geophysical datasets, including detailed ground magnetic and 3-D induced polarization;
• Wireframing and modelling of the Apollo and Rising Sun mineralized body.

A total of 49 mineralized vein set shapes were created for the exploration target, of which 42 were vein sets and seven high-grade internal shapes (at Apollo, but not Rising Sun, due to the lack of drill data) were defined. A total of 32 of the vein set shapes had grades estimated from composited assay data, while 17 vein set shapes used the average calculated grade of either Rising Sun (lower-case 5.3 g/t gold (Au) and 1.4 per cent antimony (Sb), and upper-case 8.9 g/t Au and 1.5 per cent Sb) or Apollo (lower-and-upper-case four g/t Au and 0.6 per cent Sb) and this was applied to the exploration target. Drilling indicates Rising Sun could contain higher gold and antimony grades than Apollo and Apollo Deep.

Mineralization across all vein sets was limited by the deepest mineralization defined to date, within the main structure dike/dike breccia and bleached sediments within Rising Sun approximately 1,000 m below surface. While at Apollo, the exploration target extended from surface to where drill density decreases 650 m below surface.

Below drilling intercepts to the lower estimation limit, the low-tonnage range used a minimum width of 1.5 m (75 per cent of average estimated true width of domains) while the high-tonnage range applied a minimum width of two m (average true width of domains). Strike extents in the low-tonnage range model were minimized to half drill spacing (approximately 14 m) or to locally restrictive geology (that is, bounds of altered sediment (ASED) or dike), whichever was smaller. The high-tonnage range model applied strike extents that were extended to the average vein strike (typically around approximately 40 m) or to geological constraints, whichever was smaller.

Wireframes have been created in Leapfrog Geo using a threshold of one g/t Au over two m. The economic composite tool was used to allow for the inclusion of thin, high-grade intercepts. Grade ranges have been informed by a preliminary grade estimate conducted on top-cut, composited data using Leapfrog Edge. The high- and low-grade ranges are primarily driven by differences in top cuts applied to the Rising Sun estimate. The low-end grade range used a top cut of 24 g/t Au while the upper grade range used a top cut of 67 g/t Au. The change in top cuts reflects the exclusion or inclusion, respectively, of a higher-grade population present across multiple veins that may be subdomained and estimated separately as additional drilling is conducted.

For the high-range domains Rising Sun (versus Apollo) contributes 64 per cent of the tonnes and 80 per cent of the contained ounces. Significant upside also remains within the tenor potential of Rising Sun when further high-grade domains can be recognized and separated to maintain the high-grade nature of the veins (that is, no top cuts need be applied).

Notably, the exploration target is constrained to the two main areas along the strike of the dike breccia host on the project: Rising Sun (over 340 m strike) and Apollo (over 280 m strike) for a total 620 m of strike. This strike represents about 50 per cent of the 1.2 km main drill footprint to date at Sunday Creek.

Exploration target upside

The exploration target covers 50 per cent of the strike of the core drill area. The other half of the area has not been drilled to the intensity required to include in this exploration target, highlighting the potential to further increase the overall gold-antimony endowment of the Sunday Creek gold-antimony project. Drilled prospect areas not yet included in the exploration target include:

• Apollo East: up to 260 m above and east of the exploration target, with drill results including:
  • SDDSC063: 1.5 m at 6.6 g/t AuEq (five g/t Au and 1 per cent Sb) from 25.2 m;
  • SDDSC038: 1.4 m at 13.1 g/t AuEq (0.4 g/t Au and 8 per cent Sb) from 305.5 m.
• Apollo West: 70 m west of the Apollo exploration target area, with drill results including:
  • SDDSC093: 3.9 m at 1.5 g/t AuEq (one g/t Au and 0.3 per cent Sb) from 503 m;
  • SDDSC093: 0.1 m at 10.5 g/t AuEq (8.7 g/t Au and 1.2 per cent Sb) from 524.8 m;
  • SDDSC093: 0.2 m at 11.1 g/t AuEq (11.1 g/t Au and nil Sb) from 528.7 m.
• Apollo Deep: 300 m down-dip extension below the exploration target area, with drill results including:
  • SDDSC068: 9.6 m at two g/t AuEq (1.9 g/t Au and 0.1 per cent Sb) from 1,010.4 m.
• Golden Dyke: 175 m west of the exploration target area, with drill results including:
  • SDDSC049: 9.6 m at 13.3 g/t AuEq (9.2 g/t Au and 2.6 per cent Sb) from 204.4 m;
  • MDDSC018: 1.8 m at 9.5 g/t AuEq (8.2 g/t Au and 0.9 per cent Sb) from 202.3 m;
  • VCRD004: three m at 5.5 g/t AuEq (5.2 g/t Au and 0.2 per cent Sb) from 160 m.
• Christina: drilling up to 470 m (and historic workings up to 750 m) west of the exploration target area, with drill results including:
  • SDDSC086: 2.8 m at 7.4 g/t AuEq (4.4 g/t Au and 1.9 per cent Sb) from 252.7 m;
  • SDDSC086: 3.1 m at 21.3 g/t AuEq (20.6 g/t Au and 0.4 per cent Sb) from 266.5 m;
  • SDDSC090: 9.8 m at 4.6 g/t AuEq (four g/t Au and 0.4 per cent Sb) from 346.9 m.
• Drilled regional targets (including Leviathan): located three km east from Apollo, with drill results including:
  • SDDLV003: 0.5 m at 15.7 g/t Au from 87 m;
  • SDDLV004: 0.3 m at 5.6 g/t Au from 73.4 m and 0.3 m at 19.4 g/t Au from 100.7 m.
• Undrilled regional areas: exploration at Sunday Creek has district-scale potential. There is an 11 km strike of multiple dike-breccia-altered sediment mineralized trends extending beyond the initial target drill area, defined by historic workings and soil sampling.

Toward a mineral resource estimate

The proposed exploration activities designed to test the validity of the exploration target and to move from an exploration target to a mineral resource estimate will comprise the following activities.

Native title heritage surveys

Heritage surveys required to gain access to the exploration target area have been completed in conjunction with the Taungurung Land and Waters Council, which represents the native title holders -- the Taungurung people.

Cultural heritage clearances

Heritage walkovers required to gain access to the exploration target area have been completed in conjunction with the Taungurung Land and Waters Council.

Approvals

The majority of the exploration target is contained within a small Crown land allotment. Southern Cross Gold owns 132.64 hectares that fully encloses the Crown land. Approvals required for exploration drilling to test the exploration target have been obtained on all the Crown land and on the freehold land, except within 200 m of the Sunday Creek near the Christina area. Drill access to these areas is now required to test at depth to the west of Golden Dyke and approvals to access these areas are expected in Q1 2024.

Exploration licences

The vast majority of the exploration target is located within granted retention licence RL6040 and surrounded by granted EL6163. No further exploration licences are required to be granted to test the exploration target.

Exploration program

Expansion and resource definition drilling is continuing at the project with four diamond rigs operating to continue to extend mineralization drilling within the exploration target and to upgrade the mineralization to mineral resource status. It is expected that these activities will be completed during the second half of 2024.

Metallurgical test work

Southern Cross Gold has completed initial metallurgical test work on two drill holes from the exploration target area, which were reported on Jan. 10, 2024. Mineralogical investigations demonstrated a high proportion of non-refractory native gold (82 per cent to 84 per cent). Additionally, gravity and bulk flotation resulted in 93.3-per-cent-to-97.6-per-cent recovery of gold. Flotation gave 88.9-per-cent-to-95-per-cent recovery of gold across two products:

1. An antimony concentrate, grading 32 per cent to 52 per cent Sb (87.1-per-cent-to-93.8-per-cent recovery), 81.4 g/t to 313.6 g/t Au (40 per cent of feed gold) with low to moderate arsenic contents (0.4 per cent and 2.58 per cent). It was estimated that 96 per cent to 98 per cent of the contained gold was native gold.
2. A sulphide concentrate containing 65.7 g/t to 159 g/t Au (49 per cent to 55 per cent of feed gold) with higher arsenic contents (5.7 per cent and 12.1 per cent). Critically, 79 per cent to 82 per cent of the contained gold was native gold, indicating the opportunity for ease of gold separation.

Mineral resource estimate

SRK Consulting (Australasia) Pty. Ltd. (SRK) has been engaged for continuing modelling assistance and the eventual preparation of a mineral resource estimate.

About Sunday Creek

The Sunday Creek epizonal-style gold project is located 60 km north of Melbourne within 19,365 hectares of granted exploration tenements.

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 oz gold at a grade of 33 g/t gold. Larger historic workings along the trend from west to east include Christina, Golden Dyke, 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.

Mineralization and structural setting

Geological controls on mineralization (structural, chemical, stratigraphic) exist on every ore deposit and Sunday Creek is no different. Mineralization is structurally controlled, with increased mineralization associated within the bleaching around the intrusive sequence. Early alteration and sulphide (pyrite) mineralization has exploited the vesicular/amygdaloidal nature of the pervasively altered/mineralized dike and the brecciated areas, or forms east-west-trending pyrite veinlets.

Gold-antimony mineralization is dominantly hosted within zones of subvertical, brittle-ductile 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 zones crosscut the bleached sediments and altered dike (the host) on a northwesterly orientation, and the zones are typically between five m and 30 m wide, 20 m and 100 m in strike, and currently defined vertically down to one kilometre depth. Each of these zones repeats every 10 m to 20 m within the Apollo and Rising Sun areas, with 42 vein sets currently defined to date.

When observed from above, the host resembles the side rails of a ladder, where the subvertical mineralized vein sets are the rungs, many of which extend from surface to depth.

Further information

Further discussion and analysis of the Sunday Creek project is available through the interactive Vrify 3-D animations, presentations and videos, all available on the SXG website. These data, along with an interview on these results with Mr. Hudson, managing director, can be viewed at SXG's website.

Gold equivalent calculation

SXG considers that both gold and antimony that are included in the gold equivalent calculation (AuEq) 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 WW1. The Costerfield mine corridor, now owned by Mandalay Resources Ltd. contains two million ounces of equivalent gold (Mandalay Q3 2021 results) and, in 2020, was the sixth-highest-grade global underground mine and a top 5 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, and is as follows:

• AuEq equals Au (g/t) plus 1.58 times (Sb (per cent)).

Based on the latest Costerfield calculation, and given the similar geological styles and historic toll treatment of Sunday Creek mineralization at Costerfield, SXG considers that a the above equation is appropriate to use for the initial exploration targeting of gold-antimony mineralization at Sunday Creek.

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 AAS (atomic absorption spectroscopy) equipment. Samples for multielement analysis (BM011 and overrange methods as required) use aqua regia digestion and ICP-MS (inductively coupled plasma mass spectrometry) analysis. The quality assurance/quality control (QA/QC) 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.

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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