Mr. Frazer Bourchier reports

MANDALAY RESOURCES ANNOUNCES PRODUCTION AND SALES RESULTS FOR THE SECOND QUARTER OF 2023 AND REVISED FULL-YEAR 2023 GUIDANCE

Mandalay Resources Corp. has released its production and sales results for the second quarter of 2023 and provided revised production and cost guidance for 2023.

Second quarter production highlights:

• Consolidated saleable gold equivalent production of 20,850 ounces;
• Consolidated saleable gold equivalent sold of 20,229 ounces.

Revised 2023 production and cost guidance:

• Revised 2023 production guidance to 88,000 to 100,000 gold equivalent ounces from 105,000 to 118,000;
• Cash cost and all-in sustaining costs expected at $1,010 to $1,170 and $1,370 to $1,580 per gold equivalent ounce, respectively. Previously $800 to $975 cash cost and $1,150 to $1,325 all-in sustaining;
• Exploration budget remains unchanged. Revised capital guidance to a consolidated $41-million to $49-million, a reduction of $3-million.

Frazer Bourchier, president and chief executive officer of Mandalay, commented:

"The company experienced a challenging first half of 2023 at both its operations which will impact our ability to meet the previously stated annual production and cost guidance for 2023. Despite our original expectation that production will be higher in the second half of this year than it was over the first six months, we no longer anticipate that this will compensate for the shortfall experienced year to date and are therefore revising production guidance downward by just over 15 per cent.

"While the revision in our annual guidance is unfortunate, we now have a better understanding of the factors that led to the recent production shortfalls. We are taking steps to implement mitigating solutions, which I am confident will be effective. In addition, the recently expanded exploration budget at both operations not only remains unchanged but will become a key focus area going forward as self-funded organic exploration success is envisioned to underpin the growth of the assets. Lastly, I am pleased that all of our previous gold hedges have now expired and that we anticipate the continued generation of positive cash flow."

Ryan Austerberry, chief operating officer of Mandalay, commented:

"Several temporary, yet significant factors influenced our production performance during this quarter which unfortunately caused production to fall below our initial expectations at both operations. On a consolidated basis, the company produced 20,850 and 40,836 saleable gold equivalent ounces during Q2 2023 and the first six months of this year, respectively.

"Bjorkdal produced 10,397 saleable gold ounces in Q2 2023, while facing continued challenges related to personnel vacancies, mined tonne volumes and stope dilution. However, we are seeing encouraging signs of improvement resulting from the initiatives implemented during the first half of the year with a steady increase in ore volumes delivered from the mine. We expect further productivity enhancements from our trucking contractors in the second half of this year.

"Looking ahead, we are optimistic that we will receive the mining concession required to allow us to begin production from the eastern extension of the Bjorkdal veining that was discovered and defined over the past two years. This development would initially shift our focus to the eastern extension of Main zone, where we are anticipating higher gold grades and less dilution due to the vertical orientation of the mineralization. Regarding personnel, we are committed to ongoing investment and training, but have needed to leverage the expertise of experienced contractors to supplement staffing shortfalls particularly over the summer vacation period in Sweden.

"Costerfield produced 10,453 saleable gold equivalent ounces in Q2 2023, as it encountered challenges leading to deficits in the annual budget for both gold grades and mined tonnes. The drop in grades can be attributed primarily to a delay in stope progression into the higher-grade core of the Youle orebody. We have investigated root causes of the grade discrepancies and have recalibrated our geological modelling and scheduling, adding confidence to the revised guidance. For the latter half of this year, we will be retreating production fronts into the higher-grade core of Youle while continuing to develop along the multiple veins of the Shepherd orebody.

"The shortfall in mined tonnes was further exacerbated by supply chain issues that resulted in a delay in receiving a remote underground loader. Although we initially anticipated its arrival during Q2, we now expect it to be delivered and fully functional in Q3."

Mr. Bourchier concluded: "We are making concerted efforts towards mitigating the factors leading to this productivity shortfall. In parallel, we are actively working towards optimizing our mining processes, increasing mining flexibility and streamlining our operations. These measures are aimed at mitigating most of the identified operational risks to better position our operations on a path towards building a stronger and sustainable track record of operational excellence."

Saleable production for the quarter ended June 30, 2023:

• In the second quarter of 2023, the company produced a total of 17,693 ounces of gold and 517 tonnes of antimony, representing a total of 20,850 ounces of gold equivalent, versus 19,395 ounces of gold and 523 tonnes of antimony in the second quarter of 2022, representing a total of 23,305 ounces of gold equivalent.
• Production at Bjorkdal was 10,397 ounces of gold in the second quarter of 2023 versus 8,316 ounces of gold in the second quarter of 2022.
• Production at Costerfield was 7,296 ounces of gold and 517 tonnes of antimony in the second quarter of 2023 versus 11,079 ounces gold and 523 tonnes antimony in the second quarter of 2022.

Saleable production for the six months ended June 30, 2023:

• The company produced a total of 34,030 ounces gold and 1,061 tonnes antimony, representing a total of 40,836 ounces of gold equivalent production, versus 43,976 ounces gold and 1,206 tonnes of antimony in the corresponding six months of 2022, representing a total of 52,936 ounces of gold equivalent.
• Production at Bjorkdal was 19,366 ounces gold.
• Production at Costerfield was 14,664 ounces gold and 1,061 tonnes antimony.

Sales for the quarter ended June 30, 2023:

• In the second quarter of 2023, the company sold a total of 17,200 ounces of gold and 496 tonnes of antimony, representing a total of 20,229 ounces of gold equivalent, versus 21,189 ounces of gold and 748 tonnes of antimony in the second quarter of 2022, representing a total of 26,781 ounces of gold equivalent.
• Bjorkdal sold 9,939 ounces of gold in the second quarter of 2023 versus 8,976 ounces of gold in the second quarter of 2022.
• Costerfield sold 7,261 ounces of gold and 496 tonnes of antimony in the second quarter of 2023 versus 12,213 ounces of gold and 748 tonnes of antimony in the second quarter of 2022.

Sales for the six months ended June 30, 2023:

• The company sold 35,220 ounces gold and 1,055 tonnes antimony, representing a total of 41,998 ounces of gold equivalent, versus 45,572 ounces gold and 1,275 tonnes antimony in the first six months of 2022, representing a total of 55,061 ounces of gold equivalent.
• Bjorkdal sold 19,460 ounces gold.
• Costerfield sold 15,760 ounces gold and 1,055 tonnes antimony.

About Mandalay Resources Corp.

Mandalay Resources is a Canadian-based natural resource company with producing assets in Australia (Costerfield gold-antimony mine) and Sweden (Bjorkdal gold mine). The company is focused on growing its production and reducing costs to generate significant positive cash flow. Mandalay is committed to operating safely and in an environmentally responsible manner, while developing a high level of community and employee engagement.

Mandalay's mission is to create shareholder value through the profitable operation and continuing the regional exploration program, at both its Costerfield and Bjorkdal mines. Currently, the company's main objectives are to continue mining the high-grade Youle vein at Costerfield, bring on-line the deeper Shepherd veins, both of which will continue to supply high-grade ore to the processing plant, and to extend Youle mineral reserves. At Bjorkdal, the company will aim to increase production from the Aurora zone and other higher-grade areas in the coming years, in order to maximize profit margins from the mine.

We seek Safe Harbor.