Mr. Frazer Bourchier reports

MANDALAY RESOURCES CORPORATION PROVIDES AN EXPLORATION UPDATE ON SHEPHERD AND BRUNSWICK DEEPS DISCOVERY

Mandalay Resources Corp. has provided an update on drilling progress at its Costerfield operation in Victoria, Australia. A video has been prepared to further explain the information in this release and can be found on Mandalay's website.

New drilling highlights:

• Shepherd Southern extension drilling defines new high-grade domain, including intercept highlights of:
  • 26.0 grams per tonne gold and 39.9 per cent antimony over 1.39 metres (estimated true width (ETW) 0.63 m) in SQ020;
  • 4.9 g/t gold and 10.4 per cent antimony over 2.77 m (ETW 1.74 m) in SQ026.
• Additional veins within Shepherd identified though optimization drilling, including:
  • 797.0 g/t gold over 0.52 m (ETW 0.29 m) in PD036;
  • 122.0 g/t gold over 0.55 m (ETW 0.52 m) in KD957.
• Preliminary drilling underneath the Brunswick deposit intercepts two parallel veins with highlight grades of:
  • 17.8 g/t gold over 1.87 m (ETW 1.62 m) in BD357;
  • 16.4 g/t gold and 1.5 per cent antimony over 1.39 m (ETW 1.12 m) in BD354.

Frazer Bourchier, president and chief executive officer, commented: "The continuity and longevity of Costerfield is pivotal to Mandalay, and we've strategically focused on near-mine drilling in recent exploration activities. The operation stands as one of the highest-grade gold mines globally1 and, notably, the second-highest in Australia, surpassed only by the neighbouring Fosterville mine, situated approximately 30 kilometres to the northwest.

"These recent encouraging results primarily cover infill and extension drilling related to the Shepherd orebody beneath Youle and the discovery of high-grade gold veining beneath the historic Brunswick deposit, 800 metres south of Shepherd. Replacing reserves and growing this mineral resource, with equivalent high-margin ounces from both near-mine and regional exploration success, remain a top priority for Mandalay. These results reinforce our intention to maintain our current healthy self-funding spending rate at Costerfield."

Chris Davis, vice-president of exploration and operational geology, said: "Shepherd has revealed itself as a network of sheeted subvertical veins, extending from the base of the west-dipping Youle orebody. Initially, further exploration of Shepherd's depth and southern extension faced temporary challenges due to access constraints. These constraints were resolved when a dedicated drill drive was developed earlier this year. Subsequently, much of the 2023 Shepherd drilling has been conducted from this drive, resulting in the modelling of 12 veins. Notably, a significant additional high-grade gold and antimony domain has been identified along the trend to the south.

"Drilling below Brunswick has delivered positive results, with two intercepts uncovering a new domain displaying substantial gold endowment. This area holds considerable interest, as the upper orebody is situated to the west of the main corridor, exhibiting mineralization similar to the upper parts of Augusta, where grades increased at depth. The veining observed in the initial deep drilling further supports the possibility of depth propagation to higher gold grades.

"While the results from the initial campaign are encouraging, we have temporarily paused the stepout drilling program. This decision allows us time to define the faulted architecture and update our targeting model for the upcoming phase."

2023 Costerfield near-mine focus

During 2023, near-mine exploration has focused on two major drilling campaigns: extension of the Shepherd orebody and testing the Brunswick orebody at depth. To infill and extend the currently mined Shepherd orebody, 49 exploration drill holes were completed, predominantly from a newly developed exploration drive that extended south from the bottom of the Youle decline. The drive was designed specially to allow better targeting of the Shepherd vein system to the south and at depth than existing infrastructure allowed. These results were further complemented with 82 production optimization holes that were drilled from a variety of locations within and near the Shepherd veining.

The Shepherd drilling occurred simultaneously with the Brunswick Deeps program, including 23 holes drilled from the Brunswick-Youle access drive and the base of the Brunswick decline, with the aim of building a new economic panel for extension of Costerfield mine by testing below the Brunswick orebody and workings.

Shepherd extensions

Drilling over the past year has successfully extended both the 600 and 620 veins (previously called the Shepherd and Suffolk veins, respectively) to the south, adding approximately 100 m of strike length to the 620 vein due to an upgrade to the orebody seen in SQ020 and SQ026. Updated modelling during the 2023 campaign has resolved the Shepherd system into 12 discrete veins. These include the primary veins, striking roughly north-northeast, as well as a secondary vein set often striking at roughly 45 degrees from the primary veins. The interaction of these two sets often coincides with increased endowment within the primary veins.

Additionally, depth continuation of both the 600 and 620 veins has been targeted and delineated from the 2023 drilling campaign. These holes have confirmed significant gold enrichment on the 600 structure (SQ001 -- 0.74 m ETW at 22.7 g/t gold and 3.9 per cent antimony). A continuation of the shallow, north-plunging enrichment zone of the 620 vein has been identified below the grade-controlling quartzite stratigraphic layer (distinctive thick sandstone bed) from drilling in 2023, particularly the intercept obtained in drill hole SQ029.

In addition to southern and depth extension potential of Shepherd, the drilling indicates a westward step of gold endowment across of the southern veins, corresponding with an apparent enrichment of stibnite relative to the bulk of Shepherd. This was evidenced by the progression from 600 to 620, and now initial intercepts into 630 indicate the progression continues. Future delineation of the westernmost veins provides an opportunity for further growth as the system remains open and untested to the west.

Brunswick Deeps discovery

Mineralization below the currently defined Brunswick resource remains open at depth. Drill programs conducted in prior years indicated the continuation of the orebody below a well-developed stack of thrust faults which define the base of the orebody mined between 2018 and 2020. Further thrust faults at depth have been identified from regional drilling, including the continuation of the fault that hosts Youle to the north. Throughout the Costerfield mineral district, it has been recognized that these low-angle faults have been active at all stages of the ore-forming process, and it is likely that the system continues through a western progression of offsets to the mineral system.

The program conducted in 2023 was designed to test this hypothesis with holes that would sweep under the Brunswick mine and cover the potential offset position.

The program successfully identified two veins -- offset veins identified approximately 100 m relative to the upper Brunswick vein and 60 m relative to the currently mined lower portion of Brunswick. The first vein (called the Breccia vein) is quartz breccia with a gold-dominant style of mineralization. It is surrounded by pervasive sericite alteration and trace disseminated pyrite. Highlights from this vein include 1.39 m (ETW 1.12 m) at 16.4 g/t gold and 1.5 per cent antimony in BC354 and 1.87 m (ETW 1.62 m) at 17.8 g/t gold with only trace antimony in BC357. Follow-up drilling was also conducted following the hits on BD354 and BD357; these found the Breccia vein to be somewhat continuous, striking in a northeast direction toward Youle and Shepherd.

The second vein intercepted appears to be the depth continuation of the Brunswick orebody, as it shares many Brunswick-like characteristics, such as a strongly sheared footwall and well-developed stibnite mineralization with lesser quartz relative to other Costerfield orebodies. As such, this has been called the Brunswick Deeps Main vein. Key intercepts on this vein include 0.22 m (ETW 0.18 m) at 25.5 g/t gold and 0.23 per cent antimony in BD354, and 0.97 m (ETW 0.47 m) at 11.5 g/t gold and 4.6 per cent antimony in BD356A. This vein occupies the sheared hinge of a north-striking anticline which also plunges gently to the north. The Breccia vein is currently interpreted to be truncated by the Main vein at their intersection, although the possibility remains for the identification of additional repeats along strike, or offset continuations of the Breccia vein to be tested in the future.

Some larger stepouts were conducted toward the end of the program, showing vein continuity in all directions for the Main vein. It also showed that Breccia vein grades appear to increase with proximity to the Main vein. Interpretation of drill holes that failed to intercept the breccia structure up dip have delineated a thrust fault that appears to cap the vein, which is interpreted to represent the Youle hosting fault. This fault is intimately related to mineralization at Costerfield and is interpreted to have had an influence on ore-forming environments in all major orebodies along the central corridor at Costerfield.

Forward focus of near-mine exploration

Near-mine exploration will continue to focus on the Shepherd area, particularly on the potential connection between Shepherd South and Brunswick at depth. Early interpretation shows a strike connection between these vein systems that warrants further investigation. There is also further potential for Shepherd to continue its westerly steps to the south and at depth.

Drilling of regional prospects has taken place, and is continuing, at Costerfield throughout the year, particularly at the True Blue and West Costerfield prospects. An update on these programs will be provided in the near future.

Drilling and assaying

All diamond drill core was logged and sampled by Costerfield geologists. All samples were sent to On Site Laboratory Services (OSLS) in Bendigo, Victoria, Australia, for sample preparation and analysis by fire assay for gold, and atomic absorption spectroscopy (AAS) for antimony. Samples featuring coarse-grained visible gold were assayed using a variant of fire assay known as screen fire assay. This method is routinely used to mitigate potential problems associated with heterogeneity in the distribution of coarse gold within drill samples. The procedure collects all heterogenous coarse gold by screening at 75 micrometres after crushing and pulverization, and subsequently fire assays the resultant mass to extinction. A mass weighted average of gold grade of the sample is subsequently calculated from the plus-75-micrometre and minus-75-micrometre fractions of the sample. Site geological and metallurgical personnel have implemented a quality assurance/quality control procedure that includes systematic submission of standard reference materials and blanks within batches of drill and face samples submitted for assay. Costerfield-specific reference materials produced from Costerfield ore have been prepared and certified by Geostats Pty. Ltd., a specialist laboratory quality control consultancy.

Qualified person

Chris Davis, vice-president of exploration and operational geology, a chartered professional of the Australasian Institute of Mining and Metallurgy (MAusIMM CP(Geo)), a member of the Australian Institute of Geoscientists (MAIG), a qualified person as defined by National Instrument 43-101, has reviewed and approved the technical and scientific information provided in this release.

About Mandalay Resources Corp.

Mandalay Resources is a Canadian-based 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 profitable operations 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 the deeper Shepherd veins into production, both of which are expected to continue to supply high-grade ore to the processing plant, and extend Youle's 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.