Mr. Frazer Bourchier reports

MANDALAY RESOURCES ANNOUNCES FINANCIAL RESULTS FOR THE FOURTH QUARTER AND FULL-YEAR 2023

Mandalay Resources Corp. has released its financial results for the fourth quarter and year ended Dec. 31, 2023.

The company's audited consolidated financial result for the year ended Dec. 31, 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 press release are in United States dollars except as otherwise indicated.

Fourth quarter 2023 highlights:

• Consolidated revenue up 22 per cent as compared with the same period last year, reaching $50.6-million;
• Bjorkdal had its strongest quarter since Q1 2022, generating revenue of $22.1-million;
• Consolidated quarterly adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $23.1-million, a 15-per-cent increase as compared with corresponding quarter last year;
• Consolidated cash cost of $979 and all-in sustaining cost of $1,296 per ounce of saleable gold equivalent production;
• Generated $14.9-million and $5.5-million in cash flow from operating activities and free cash flow, respectively;
• Consolidated net income was $2.7-million (three cents or four Canadian cents per share).

Full year 2023 highlights:

• Ending cash position of $26.9-million of cash on hand, with a net cash position of $3.3-million. As at the end of January, 2024, cash position of $36.8-million, with an estimated net cash position of $13.0-million;
• Generated consolidated revenue of $173.3-million;
• Generated $43.3-million cash flow from operating activities;
• Consolidated adjusted EBITDA of $60.3-million;
• Consolidated cash cost of $1,100 and all-in sustaining cost of $1,497 per ounce of saleable gold equivalent production;
• Consolidated net income was $7.9-million (eight cents or 11 Canadian cents per share).

Frazer Bourchier, president and chief executive officer, commented:

"Mandalay navigated a challenging year with resilience and adaptability. After a poor start in 2023 due to various operational issues mostly at Costerfield, our strong financial performance in the fourth quarter underscored the effectiveness of our various strategic initiatives and the increased operational and financial focus of our team. We maintained our efforts on disciplined capital allocation at our two mines, positioning the company for improved future cash generation. During this year, Mandalay generated $173.3-million in revenue, leading to an adjusted EBITDA of $60.3-million -- a solid margin of 35 per cent.

"In 2023, both cash and all-in sustaining costs per ounce increased compared with the previous year, primarily attributed to reduced gold equivalent production and Mandalay's relatively high proportion of fixed costs. That being said, for the full year, our consolidated cash cost per ounce of saleable gold equivalent produced was $1,100, while the all-in sustaining cost was $1,497."

Nick Dwyer, chief financial officer, commented:

"As at the end of Q4 2023, the company maintained a healthy financial position, concluding with $26.9-million in available cash on hand and a net cash position of $3.3-million. It's important to highlight that year-end cash and net cash positions were adversely affected by an unusual delay in receipts resulting from concentrate shipment delays, which were eventually received soon after the quarter. As of the end of January, 2024, our cash balance has risen to approximately $36.8-million.

"Costerfield delivered a robust financial quarter, achieving $28.5-million in revenue and generating $17.0-million in adjusted EBITDA. This impressive margin was facilitated by processed grades of 13.1 g/t gold and 2.1 per cent antimony. In support of our organic growth initiatives, we spent $8-million in exploration expenditures at this site during the year.

"Bjorkdal continued with its consistent quarter-over-quarter performance, recording $22.1-million in revenue, marking a significant 42-per-cent increase generated during the corresponding period last year. The upswing was largely credited to elevated gold grades, particularly from the Eastern Extension zone. The operation remains committed to prioritizing the mining of higher-grade gold areas of this extensive gold system."

Mr. Bourchier concluded: "We are pleased to close the year on a positive note and aim to sustain this momentum as we work towards fulfilling our long-term growth and value creation goals. In 2024, our commitment remains steadfast in delivering sustainable growth and value for our shareholders, all while prioritizing safety, environmental responsibility and community engagement. Concurrently, we continue the focus of strengthening our balance sheet."

Fourth quarter and full year 2023 financial summary

The attached table summarizes the company's consolidated financial results for the three months and years ended Dec. 31, 2023, and 2022.

In Q4 2023, Mandalay generated consolidated revenue of $50.6-million, 22 per cent higher than the fourth quarter of 2022. The increase in revenue was due to higher gold equivalent ounces produced and therefore sold at Bjorkdal. Another contributing factor to the increased revenue was the higher realized gold prices during the quarter at $1,965 per ounce compared with $1,706 per ounce in Q4 2022. In Q4 2023, Mandalay sold 1,379 more gold equivalent ounces than in Q4 2022.

Consolidated cash cost per ounce of $979 was higher in the fourth quarter of 2023 compared with $909 in the fourth quarter of 2022. The increase in cash cost was due to an increase in mining costs mainly due to additional contractor miners being used, primarily at Bjorkdal for production drilling. Cost of sales including change in inventory during the fourth quarter of 2023 versus the fourth quarter of 2022 were $3.6-million higher at Costerfield and $2.3-million higher at Bjorkdal. Consolidated general and administrative costs were $400,000 higher compared with the fourth quarter of 2022.

Mandalay generated adjusted EBITDA of $23.1-million in the fourth quarter of 2023, 15 per cent higher than adjusted EBITDA in the fourth quarter of 2022. The increase in adjusted EBITDA was due to higher revenue in the current quarter. Adjusted net income was $9.7-million in the fourth quarter of 2023, which excludes a $300,000 unrealized loss on financial instruments, $6.5-million of revision of reclamation liability and $200,000 of writedown of assets, compared with an adjusted net income of $5.2-million in the fourth quarter of 2022.

Consolidated net income was $2.7-million for the fourth quarter of 2023, versus $1.0-million in the fourth quarter of 2022. Mandalay ended the fourth quarter of 2023 with $26.9-million in cash and cash equivalents.

Fourth quarter and full year 2023 operational summary

The attached table summarizes the company's operations, capital expenditures and operational unit costs for the three months and years ended Dec. 31, 2023, and 2022.

Costerfield gold-antimony mine, Victoria, Australia

Costerfield produced 13,016 ounces of gold and 404 tonnes of antimony for 15,383 gold equivalent ounces in the fourth quarter of 2023. Cash and all-in sustaining costs at Costerfield of $738/oz and $920/oz, respectively, compared with cash and all-in sustaining costs of $608/oz and $800/oz, respectively, in the fourth quarter of 2022.

During Q4 2023, Costerfield generated $28.5-million in revenue and $17.0-million in adjusted EBITDA, which resulted in net income of $9.3-million. Head grades during Q4 2023, which averaged 13.1 g/t gold and 2.1 per cent antimony. Compared with previous quarters of 2023, Costerfield's gold equivalent production increased significantly, primarily due to higher underground mined gold grades during the quarter. Additionally, the issues leading to lower milled tonnes stemming from processing transitional Youle to Shepherd ore have largely been addressed with planned capital improvements to aid consistency of throughput.

Bjorkdal gold mine, Skelleftea, Sweden

Bjorkdal produced 11,558 ounces of gold in the fourth quarter of 2023. Cash and all-in sustaining costs at Bjorkdal were $1,299/oz and $1,664/oz, respectively, compared with cash and all-in sustaining costs of $1,362/oz and $1,810/oz, respectively, in the fourth quarter of 2022.

Bjorkdal continues to show improvement in production and sales figures. During Q4 2023, Bjorkdal generated $22.1-million in revenue and $7.5-million in adjusted EBITDA, which resulted in net income of $3.5-million. The production of 11,558 ounces was higher than the 10,256 ounces produced in the fourth quarter of 2022 primarily due to higher processed grades, mainly coming from the Eastern Extension zone.

Lupin, Nunavut, Canada

Care and maintenance spending at Lupin was less than $100,000 during the fourth quarter of 2023, which was same as in the fourth quarter of 2022. Reclamation spending at Lupin was $800,000 during 2023 compared with $7.4-million in 2022. While continuing reclamation activities will ramp back up in 2024 as compared with 2023, the majority of the remaining reclamation work is expected during 2025. Lupin is currently in the process of final closure and reclamation activities, which are partly 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 Q4 2023.

Normal course issuer bid (NCIB)

On Feb. 15, 2024, the company sought the approval of the Toronto Stock Exchange to make a normal course issuer bid (NCIB) for up to 5 per cent of its outstanding common shares.

Mandalay 2024 guidance reminder:

Mandalay reiterates its full year production and cost guidance as shared on Jan. 16, 2024, as in the attached table.

This guidance was based on:

• Foreign exchange assumptions:
  • Average 2023 rates: Australian dollar/U.S. dollar 0.665 and U.S. dollar/Swedish krona 10.61;
  • Guidance 2024 rates: Australian dollar/U.S. dollar 0.670 and U.S. dollar/Swedish krona 10.30.
• Capital expenditures at Costerfield to be carried out at the tailings storage facilities of $4-million to $6-million.
• Capitalized exploration expenditures of:
  • Costerfield: $9-million to $11-million;
  • Bjorkdal: $3-million to $4-million.

Conference call

A conference call with Frazer Bourchier, president and chief executive officer of Mandalay, for investors and analysts on Feb. 23, 2024, at 8 a.m. (Toronto time). Interested investors may join by using the following dial-in number:

Participant number (North America toll-free):  1-888-664-6383

Conference ID:   67249025

A replay of the conference call will be available until 11:59 p.m. (Toronto time), March 1, 2024, and can be accessed using the following dial-in numbers:

Encore No. (Canada toll-free):  1-888-390-0541

Encore replay code:  249025

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.