Mr. Frazer Bourchier reports

MANDALAY RESOURCES ANNOUNCES FINANCIAL RESULTS FOR THE THIRD QUARTER 2023 AND CFO TRANSITION

Mandalay Resources Corp. has released its financial results for the quarter ended Sept. 30, 2023.

The company's condensed and consolidated interim financial statements for the quarter ended Sept. 30, 2023, together with its management's discussion and analysis (MD&A) for the corresponding period, can be accessed under the company's profile on SEDAR+ and on the company's website. All currency references in this news release are in U.S. dollars except as otherwise indicated.

Third quarter 2023 highlights:

• Generated consolidated quarterly revenue of $40.9-million;
• Bjorkdal had its strongest quarter since Q1 2022, generating revenue of $21.8-million and adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) (1) of $9.0-million for 2023;
• Consolidated quarterly adjusted EBITDA of $15.4-million;
• Consolidated net income was $4.1-million (four cents (six Canadian cents) per share).

Frazer Bourchier, president and chief executive officer, commented:

"Mandalay delivered solid financial performance during the third quarter, resulting in the company's 13th consecutive quarter of profitability. Characterized by stable production and improving grades, the strategic initiatives undertaken at Bjorkdal are yielding encouraging results, allowing the site to achieve its highest revenue and EBITDA in the past six quarters. At Costerfield, milled gold head grades improved to 9.6 g/t gold in Q3 2023 and, as earlier 2023 underground mining delays are progressively overcome, we expect these underground grades to further improve in Q4 2023.

"As we look ahead to the final quarter this year, with anticipated further improvements at Costerfield with higher-grade areas at Youle and improved mill throughput, as well as another consistent quarter of production at Bjorkdal underpinned by higher-grade eastern extension ore, the company expects to achieve the lower end of its production guidance range of 88,000 to 100,000 gold equivalent ounces."

(1) Adjusted EBITDA, adjusted net income, cash costs and all-in sustaining costs are not standardized financial measures under IFRS (international financial reporting standards) and might not be comparable with similar financial measures disclosed by other issuers.

Nick Dwyer, chief financial officer, commented:

"Our consolidated cash costs and all-in sustaining costs (1) per saleable gold equivalent ounce produced during Q3 2023 were $1,084 and $1,436, respectively. These figures represent a decrease from the previous quarter, mainly due to higher metal production and lower capital expenditure.

"As at the end of Q3 2023, the company maintained a healthy balance sheet, closing with $21.7-million in cash on hand and a net debt position of $2.4-million. Our financial stability was further supported by $40.9-million in revenue and $15.4-million in adjusted EBITDA (1), resulting in net income of $4.1-million.

"The month-end cash balance and temporary dip into a net debt position were negatively influenced by a delayed receipt of $5.5-million at Bjorkdal due to a shipment which was received after quarter-end. Cash was also impacted during the quarter by an expected one-off reclamation increased bonding requirement at Costerfield of $3.5-million."

Mr. Bourchier concluded: "As we move forward, our primary focus remains delivering operating cash flow and executing our growth plan to become a mid-tier gold producer. We are steadfast on our path to transformational growth, and every step we take is aligned with this strategic objective while also delivering optimal performance to our valued shareholders and stakeholders."

Third quarter 2023 financial summary

An attached table summarizes the company's consolidated financial results for the three months and nine months ended Sept. 30, 2023, and Sept. 30, 2022.

In Q3 2023, Mandalay generated consolidated revenue of $40.9-million, 11 per cent lower than the $46.0-million in the third quarter of 2022. The decrease in revenue was due to lower gold equivalent ounces produced and therefore sold at Costerfield. The company's realized gold price in the third quarter of 2023 increased by 15 per cent compared with the third quarter of 2022 and the realized price of antimony decreased by 9 per cent. In Q3 2023, Mandalay sold 5,983 fewer gold equivalent ounces than in Q3 2022.

Consolidated cash cost per ounce of $1,084 was higher in the third quarter of 2023, compared with $846 in the third quarter of 2022. Cost of sales during the third quarter of 2023 versus the third quarter of 2022 was $1.4-million lower at Costerfield and $1.0-million higher at Bjorkdal. Consolidated general and administrative costs were $700,000 lower compared with the prior-year quarter.

Mandalay generated adjusted EBITDA of $15.4-million in the third quarter of 2023, 21 per cent lower than adjusted EBITDA of $19.4-million in the third quarter of 2022; the decrease in adjusted EBITDA was due to lower revenue in the current quarter. Adjusted net income was $3.7-million in the third quarter of 2023, which excludes a $400,000 unrealized gain on financial instruments, compared with an adjusted net income of $2.5-million in the third quarter of 2022.

Consolidated net income was $4.1-million for the third quarter of 2023, versus $9.3-million in the third quarter of 2022. Mandalay ended the third quarter of 2023 with $21.7-million in cash and cash equivalents.

Third quarter operational summary

An attached table summarizes the company's operations, capital expenditures and operational unit costs for the three months and nine months ended Sept. 30, 2023, and Sept. 30, 2022.

Costerfield gold-antimony mine, Victoria, Australia

Costerfield produced 8,377 ounces of gold and 395 tonnes of antimony for 10,808 gold equivalent ounces in the third quarter of 2023. Cash and all-in sustaining costs at Costerfield of $975 per ounce (oz) and $1,265 per oz, respectively, compared with cash and all-in sustaining costs of $669 per oz and $838 per oz, respectively, in the third quarter of 2022.

During Q3 2023, Costerfield generated $19.1-million in revenue and $7.7-million in adjusted EBITDA, which resulted in net income of $3.5-million. Head grades during Q3 2023, which averaged 9.6 grams per tonne (g/t) gold and 2.2 per cent antimony, were below expectations as processed grades were adversely affected by a delay in stope progression into the higher-grade core of the Youle orebody and lower throughput, which was due to temporary challenges encountered with the hardness of the ore during transition from the Youle to the Shepherd zone.

Bjorkdal gold mine, Skelleftea, Sweden

Bjorkdal produced 11,224 ounces of gold in the third quarter of 2023, with cash and all-in sustaining costs of $1,189 per oz and $1,474 per oz, respectively, compared with cash and all-in sustaining costs of $1,139 per oz and $1,397 per oz, respectively, in the third quarter of 2022.

Bjorkdal continues to show improvement in production and sales figures with $21.8-million, $9.0-million and $2.1-million in revenue, adjusted EBITDA and net income, respectively, in Q3 2023. Production of 11,224 ounces was higher than the 10,291 ounces produced in the third quarter of 2022 due to the higher processed head grade.

Lupin, Nunavut, Canada

Care and maintenance spending at Lupin was less than $100,000 during the third quarter of 2023, which was same as in the third quarter of 2022. Reclamation spending at Lupin was $100,000 during the third quarter of 2023, compared with $1.2-million in the third quarter of 2022. The majority of this reclamation work is expected during 2024 as Lupin is currently in the process of final closure and reclamation activities, which are mainly financed by progressive security reductions held by the Crown Indigenous Relations and Northern Affairs Canada.

La Quebrada, Chile

No work was carried out on the La Quebrada development property during Q3 2023.

CFO transition

Mandalay also announces today that Ms. Dwyer will be leaving the company in the first quarter of 2024 as a result of his decision to resign and relocate to Australia for personal reasons. Mr. Dwyer will continue to serve as Mandalay's CFO in a full-time capacity until then in order to ensure an orderly completion of the company's 2023 year-end reporting and a smooth transition of duties. The company will be commencing a search for Mr. Dwyer's successor.

Commenting on Mr. Dwyer's departure, Mr. Bourchier said: "Nick has been a key part of Mandalay's management team for over eight years, including as CFO since 2018. He played a significant role in Mandalay's 2019 financing transaction that was crucial to the company's turnaround that followed and the refinancing of various senior credit arrangements while leading the finance function over his tenure. On behalf of Mandalay's board, management and shareholders, I'd like to thank Nick for his invaluable contributions and wish him every success in his future endeavours."

Conference call

Analysts and interested investors may join by using the following dial-in number.

Participant number (toll-free in North America):  1-877-270-2148

Conference ID No.:  10183607

Alternatively, please register for the webcast on-line.

A replay of the conference call will be available until 11:59 p.m. Toronto time, Nov. 16, 2023, and can be accessed using the following dial-in number.

Encore number (toll-free in Canada):  855-669-9658

Encore replay code:  3729475

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 the deeper Shepherd veins into production, both of which are expected to continue to supply high-grade ore to the processing plant, and to 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.