Mr. Bradford Mills reports

MANDALAY RESOURCES CORPORATION ANNOUNCES FILING OF FINAL SHORT FORM PROSPECTUS

Mandalay Resources Corp. has filed a final short form prospectus with the securities regulatory authorities in each of the provinces of Canada, except Quebec, in connection with a fully marketed offering to issue 82,142,857 subscription receipts at a price of 28 cents per subscription receipt for aggregate gross proceeds of $23-million on a best-efforts basis with a syndicate of agents co-led by GMP Securities LP and BMO Capital Markets. Once the release conditions (as defined in this press release) have been satisfied, each subscription receipt will be automatically exchanged, without payment of any additional consideration and subject to adjustment, for one unit composed of one common share of the company and one common share purchase warrant. Each warrant will be exchangeable into one common share of the company at a price of 33 cents for a period of 24 months. Upon the exchange of the subscription receipts for units, the agents will be paid a commission equal to 5 per cent of the gross proceeds received by the company from the offering or $1.15-million. Of this amount, $100,000 will be paid in cash, and the balance will be paid by Mandalay issuing 3.75 million units to the agents at a price of 28 cents. The offering follows the signing of a purchase agreement with Coeur d'Alene Mines Corp., pursuant to which the company agreed to purchase Coeur's wholly owned subsidiary Compania Minera Cerro Bayo Ltda. Please refer to Stockwatch from May 4, 2010, for further details. The principal asset of Minera Cerro Bayo is the Cerro Bayo silver-gold mine in Patagonia, Chile, currently on care and maintenance. The offering and the acquisition are expected to close on or about Aug. 6, 2010.

Brad Mills, chief executive officer of Mandalay, said: "We are pleased to have filed our final prospectus for the financing in connection with our acquisition and restart of the Cerro Bayo mine. Following the completion of the transaction, the company plans to immediately restart mining operations at Cerro Bayo and commence exploration drilling to extend the reserve life of the operation. We expect initial commercial production to be achieved in the first quarter of 2011, building up to an annualized production rate of approximately 25,000 ounces of gold and three million ounces of silver per year by the end of 2011."

The gross proceeds of the offering, less an amount equal to the expenses of the agents in connection with the offering, will be held in escrow and released to the company when the release conditions in connection with the offering have been satisfied. If the release conditions are not satisfied on or before 5 p.m. (EDT) on Aug. 15, 2010, holders of subscription receipts will be entitled to a full refund of the subscription price for their subscription receipts. The release conditions include the satisfaction of the conditions precedent contained in the purchase agreement dated May 1, 2010, between the company and Coeur (available under the profile of the company at SEDAR), the receipt by the company of the conditional approval of the Toronto Stock Exchange of the offering, and the listing of the underlying unit shares and warrants and the warrant shares. The company has received the conditional approval of the listing of the unit shares and warrants and the warrant shares from the Toronto Stock Exchange. The proceeds from the offering will be used to finance the purchase price of Minera Cerro Bayo, Cerro Bayo mine development, exploration and plant improvements, as well as general working capital. The final short form prospectus is available on SEDAR under Mandalay's profile.