Mr. Frazer Bourchier reports

MANDALAY RESOURCES PROVIDES 2023 YEAR-END MINERAL RESERVES AND RESOURCES UPDATE FOR THE COSTERFIELD MINE, ALONGSIDE AN INTERIM MINERAL RESERVES UPDATE FOR THE BJORKDAL MINE

Mandalay Resources Corp. has released updated mineral reserves and resources for the Costerfield mine in Victoria, Australia, and an interim mineral reserve update for its Bjorkdal mine in Vasterbotten county, Sweden, as at Dec. 31, 2023. All dollar amounts in this press release are in U.S. dollars unless otherwise noted.

Costerfield mineral reserves and resources highlights:

• 559,000 tonnes at a gold grade of 10.5 grams per tonne and 1.9 per cent antimony, for an approximate 188,000 ounces of gold and 10,600 tonnes of antimony in total proven and probable mineral reserves;
• 965,000 tonnes at a gold grade of 10.6 g/t and 3 per cent antimony, for an approximate 330,000 ounces of gold and 28,800 tonnes of antimony in total measured and indicated mineral resources.

Bjorkdal 2023 interim mineral reserves highlights:

• 11.5 million tonnes at a gold grade of 1.32 g/t for an approximate 490,000 ounces of gold in total proven and probable mineral reserves;
• Mineral resources remain unchanged as not updated.

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

"Under Mandalay's ownership since 2009, Costerfield has consistently demonstrated a stable track record of mineral resource replacement, contributing to an average mine life fluctuating between two to five years over this 15-year period. The ongoing exploration efforts have generated significant value over time, and the company remains steadfast in its commitment to exploring both near the mine and regionally to unlock even further value at Costerfield with increased exploration spend for 2024.

"Likewise, Bjorkdal remains a significant large system and this interim update of mineral reserves is more a methodology calculation amendment only and we are excited to further fully update the mineral resources and mineral reserves effective end of this year to capture 2023 and 2024 drilling, to be released in early 2025."

Chris Davis, vice-president of exploration and operational geology, continued:

"At Costerfield, the focus has been on understanding the Shepherd discovery made in 2021. Drilling efforts aimed to delineate and accurately model the veining, revealed high grades in a network of sheeted quartz veins with complex interactions. Although defining Shepherd has bolstered mining confidence, expanding mineral resources has proven somewhat more challenging within this deposit. Consequently, for now, the growth in mineral resources was less than initially anticipated, and the current estimate of mine life is 3.5 years.

"Regarding Bjorkdal, an interim reserve update was conducted factoring in the depletion of mineral reserves for 2023 while updating the scheduling methodology applied, resulting in an increase in tonnage with a reduction in underground mine grade. This scheduling update was an in-house initiative with engineering consultants SLR input and reflects Mandalay's commitment to continuous improvement and enhancing operational performance. A comprehensive mineral resources and reserves update is planned for release in Q1 2025 which will reflect all exploration drilling from 2023 and that planned for this 2024 year."

Costerfield mineral resource and mineral reserve summary

During 2022 and 2023, at Costerfield, Mandalay drilled a total of 82.9 kilometres of exploration diamond core. The breakdown of this drilling campaign was as follows:

• 34.6 km to verify through infill and test extensions of the Youle and Shepherd orebodies;
• 21.3 km to test and infill other near-mine targets;
• 27 km to test regional targets beyond current mine operations.

The 27 km of regional testing included 10.4 km drilling on the nearby True Blue deposit located approximately two km northwest from the current Youle workings. The maiden inferred resource on True Blue consists of quartz and stibnite veins hosted in the Costerfield siltstone (which also hosts all other current resources at Costerfield) akin to those seen in the Augusta and Cuffley orebodies mined from 2008 to 2018. Gold is also hosted within these veins, typically within the quartz. This will lead to increased activity on this deposit during 2024.

In addition to regional exploration drilling, 1,607 metres of on-vein development was completed within the Youle orebody, and 4,341 metres of development into the Shepherd orebody. Rock chip samples used in mine grade control were also included in the geological database and used in the mineral resources estimation process to improve mineral resources classification in areas accessed by development.

Drill core was logged and sampled by Costerfield geologists, who also performed mine sampling. All samples were submitted to Onsite Laboratory Services in Bendigo, Victoria, Australia, for sample preparation and assay. Site geological and metallurgical personnel have implemented a quality assurance/quality control process that includes the regular submission of site-specific and externally sourced standard reference materials, duplicates and blanks with drill and face samples submitted for assay. Site-specific standard reference materials were both produced and certified by Geostats Pty. Ltd. or ORE Research and Exploration Pty. Ltd. (OREAS). Both Geostats and OREAS are Australian consultancies that specialize in laboratory quality control systems.

The acQuire Geoscientific Information Management (GIM) system was used to store and validate all geological data used for the mineral resource estimate. A 2-D accumulation estimation method was used for all models. This method is considered most applicable for the narrow veins of Costerfield. The Datamine Studio RM platform supports 2-D accumulation estimation and was used to complete the mineral resource estimation. Validated drilling and mine sampling data were imported into Datamine and composited to full intersection width. Gold accumulation, antimony accumulation (accumulation is vein true width multiped by vein grade) and true vein width were estimated into a 2-D block model for each lode using ordinary kriging interpolation. Gold and antimony grades were back-calculated using the estimated accumulated data and true vein width.

Where vein true widths are less than 1.2 metres, vein grades were diluted to a minimum mining width of 1.2 metres using dilution grades of zero g/t gold and 0 per cent antimony for host lithologies. Where vein true widths are greater than or equal to 1.2 metres, grades were not diluted.

Mineral resources were reported above a cut-off of five g/t gold equivalent, which was determined using Costerfield's 2023 production costs, and using a gold price of $1,900/ounce, and an antimony price of $12,000/t. Cut-off grade is expressed as AuEq to allow for the inclusion and expression of the secondary metal (Sb) in terms of the primary metal (Au). AuEq is calculated using the formula AuEq equals Au plus (Sb multiplied by 1.88) where Sb is expressed as a percentage, and Au is in grams per tonne, both based on 1.2-metre diluted grades.

The measured and indicated categories of mineral resources were used to update the mine plan using predominantly a long-hole stoping mining method with cemented rock fill. An operational cut-off grade of six g/t AuEq was determined from Costerfield's 2023 production costs, and minimum stoping widths of 1.5 metres were used, with planned and unplanned dilution at zero grade for both Au and Sb. An incremental cut-off grade of 3.1 g/t AuEq was applied where incremental mining conditions were met. AuEq grade for the mineral reserve is calculated using commodity prices of $1,800/oz for Au, and $11,500/t Sb. AuEq is calculated using the formula AuEq equals Au plus (Sb multiplied by 1.22) where Sb is in percentage and Au is in grams per tonne. Financial viability of proven and probable mineral reserves was demonstrated at metal prices of $1,800/oz Au and $11,500/t Sb.

The net decrease of 123,384 ounces of gold in proven and probable mineral reserves for end 2023, relative to end 2021, consists of the addition of 13,124 ounces of gold added by mineral resource conversion and addition of mineral resources to the Shepherd orebody as well as a total of 110,259 ounces of gold depleted from the Dec. 31, 2021, mineral reserves through mining production in 2022 to 2023 and through mining re-evaluation. The 8,970 tonnes of antimony net decrease in proven and probable mineral reserves consists of 793 tonnes of antimony added by mineral resources conversion and addition of mineral resources to Shepherd and 8,177 tonnes of antimony depleted from the 2023 mineral reserves through mining production in 2022 to 2023 and through mining re-evaluation.

Leading into 2024, Mandalay is continuing to centre its regional efforts on a number of prospective targets that present major growth opportunities at Costerfield. The expenditure for near-mine exploration will remain constant around Shepherd but with additional focus now on the Cuffley extension programs as well as Brunswick extension. In addition, Mandalay has accelerated regional exploration with a major focus and 2024 centre of attention on the True Blue deposit line with stepout drilling currently being undertaken over a prospective strike length of 1.5 km.

Bjorkdal interim mineral reserves estimate

Owing to the longevity of the Bjorkdal mine and consistency of mineral resources replacement, Mandalay chose not to complete and report a full 2023 year-end mineral resources and mineral reserves estimate reported in Q1 2024. Rather, the below describes steps taken to produce an interim mineral reserves estimate from the previous mineral resource model that has a drilling effective cut-off date remaining as of September, 2022.

Reconciliation analysis at Bjorkdal continues to show good global metal correlation between the resource models and production. However, owing to the structural complexity of veining at Bjorkdal, it is generally understood that gold ounces will be delivered from underground at a lower grade than modelled due to further mine development required to optimally recover the complex ore veining.

As a part of the company's continuing dedication to continual improvement, Mandalay enlisted the assistance of SLR Consulting to contribute to and verify a new scheduling methodology that accounts for veining complexity within the Bjorkdal mine that is difficult to accurately model through drilling alone.

Grade and tonnage scientific factoring has been applied in areas characterized by a high potential for discovery of new veins not predicted in the initial models but observed once mining faces intersect the veins. Stopes with diluted and recovered grades exceeding 1.8 g/t and on-vein development drives exceeding 2.5 g/t have been factored to reduce as-mined grades and increase mined tonnes. This approach is well supported by historical and continuing reconciliation data, where an increase in run-of-mine (RoM) ore tonnes is related to mining more veins in a particular area than initially expected. This results in lower head grades at higher volumes but generally maintains total mined ounces of gold.

Estimated stope ore tonnes are calculated by dividing the projected final grade of stopes or development drives by the prescribed capping value, after applying dilution and recovery modifying factors.

Capping has been selectively employed in well-established areas with extensive existing development already in place. Stopes with diluted and recovered grades exceeding 1.8 g/t and on-vein development drives exceeding 2.5 g/t have been capped at those grades as informed by historical reconciliation data.

This implementation of capping grades has been confined to regions where the likelihood of discovering new veins, with a consequential increase in ore tonnes, is limited. Capping involves constraining the projected final grade of stopes or development drives to the specified cap value. For instance, a stope with a calculated final grade of 2.6 g/t and a capping value of 1.8 g/t will only account for ounces of gold up to the capping threshold. Any ounces above this limit are excluded, while the final tonnage remains unaltered.

This interim mineral reserves estimation has used the existing long-term block model with a data cut-off date of Sept. 30, 2022. No new drilling, mapping or sampling data acquired subsequent to that cut-off date have been included as yet. However, the model was depleted for mining extraction up to Dec. 31, 2023, prior to estimating updated mineral reserves.

No amendments have been made to the Bjorkdal and Norrberget open-pit mineral reserves estimates filed in the National Instrument 43-101 technical report on March 31, 2023. In re-estimating the underground interim mineral reserves at Bjorkdal mine, a gold price of $1,800 (U.S.)/oz has been used.

Cut-off grades (CoG) have been updated for underground stoping and development using fiscal year 2023 actual operating and capital costs. The mill recovery figure was updated in line with the FY 2024 budget and gold payability has been based upon actual contracts and the FY 2024 budget.

The updated marginal CoG was calculated to be 0.45 g/t and the stope CoG 0.94 g/t. A slightly more conservative stope CoG of one g/t has been used for estimating interim mineral reserves.

Where inferred material is present in designed development drives and stopes, this has been treated as zero-grade waste for the purposes of dilution and economic assessment. No inferred material has been included in the interim mineral reserve re-estimation.

The mineral reserves have increased in ore tonnes by 95,000 tonnes as a result of the new scheduling methodology undertaken. The proven and probable gold ounces have decreased by a total of 80,000 which includes 2023 mining depletion of approximately 50,000 gold ounces. The remainder, approximately 34,000 gold ounces, is due to capping losses in developed areas of the underground mine, and losses due to removal of development and stopes containing a high proportion of inferred gold ounces.

Bjorkdal has conducted further exploration drilling since Sept. 30, 2022, and detailed mapping and sampling of on-vein development was routinely carried out during 2023 in accordance with grade control protocols. An updated long-term block model, that will include drilling up to the end of September, 2024, is currently in the process of being developed in preparation for the filing of an updated mineral resource estimate and NI 43-101 technical report in March, 2025.

Qualified persons

All qualified persons listed below have read and approved the contents of this news release as they pertain to the mineral resource and mineral reserve estimates disclosed in this news release.

The mineral resource estimates for Costerfield and True Blue were carried out under the supervision of Cael Gniel, MAIG, RPGeo (mineral resource estimation), a full-time employee of SRK Consulting and independent of Mandalay. He is a qualified person for the purpose of NI 43-101.

The QP is not aware of any environmental, permitting, legal, title, taxation, socio-economic, marketing, political or other relevant factors that could materially affect the mineral resource estimate.

The mineral reserve estimate for Costerfield was carried out under the supervision of Robert Urie, FAusIMM, who is a full-time employee of SRK Consulting and independent of Mandalay. He is a qualified person for the purposes of NI 43-101.

The QP is not aware of any mining, metallurgical, infrastructure, permitting or other relevant factors that could materially affect the mineral reserve estimate.

The Bjorkdal interim mineral reserve estimate was carried out under the supervision of Rick Taylor, CP, MAusIMM, principal mining engineer, an employee of SLR and independent of Mandalay. He is a qualified person for the purposes of NI 43-101.

The QP is not aware of any mining, metallurgical, infrastructure, permitting or other relevant factors that could materially affect the mineral reserve estimate.

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.

We seek Safe Harbor.