Mr. Frazer Bourchier reports

MANDALAY EXTENDS THE STORHEDEN GOLD DEPOSIT ADJACENT TO THE OPERATING BJORKDAL MINE

Mandalay Resources Corp. has expanded the Storheden gold deposit, 600 metres from the Bjorkdal mine, on strike to over 1.6 kilometres and at depth of approximate 200 m with high-grade gold intercepts. This press release is the first in a series of updates on the company's 2024 regional exploration progress at Bjorkdal.

Program highlights:

• Drilling confirms Storheden along strike to over 1.6 km;
• Doubled known system depth to approximately 200 m;
• Mineralization characterized by high-grade gold intercepts (assay highlights below);
• Structural setting akin to multimillion-ounce Bjorkdal deposit located 600 m southwest;
• A mining concession was secured in 2018 over a significant portion of the area.

Assay highlights:

• 70.2 grams per tonne gold over 0.45 m (estimated true with (ETW) 0.15 m) in SH-06 at 136 m;
• 39.7 g/t gold over 0.70 m (ETW 0.45 m) in SH-06 at 120 m;
• 7.3 g/t gold over 3.05 m (ETW 1.96 m) in SH-11 at 225 m;
• 33 g/t gold over 0.40 m (ETW 0.26m) in SH-21 at 90 m.

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

"I am pleased to share progress on our 2023 initiatives at Storheden. This deposit has not been thoroughly explored in comparison to our extensive Bjorkdal deposit; however, it is showing promising signs of gold mineralization. In 2023, about 5,150 m were drilled across 22 drill holes targeting two separate objectives: depth extension with verification of system geometries and strike extension of the shear system.

"This extensive drill testing program covered over 1.6 km and reached depths of approximately 100 m. It revealed many similarities to Bjorkdal and we are pleased to report success with high-grade gold discovered at depth and along strike. Moreover, this campaign also provided valuable insight into modelling the deposits.

"In 2024, efforts at Storheden will prioritize diamond drilling to test the downward extensions of the mineralized zones and will be supplemented by generating regional targets using field mapping, soil sampling and reconnaissance base-of-till drilling. Additionally, ongoing analysis of existing prospects will contribute to the development of new drilling targets and the continuation of exploration efforts based on the findings from previous campaigns."

Regional exploration ramp-up at Bjorkdal

During the summer seasons of 2022 and 2023, a total of 15,444 m from 67 holes were drilled on prospective targets within the vicinity of the Bjorkdal mine. These targets were identified through analysis and interpretation of historical data sets and recent fieldwork conducted within Mandalay's active exploration permits. They represent areas of high potential for further mineral discoveries and underscore the company's commitment to advancing exploration efforts in the region.

Storheden focus

The Storheden deposit is located roughly 600 m to the northeast of the Bjorkdal mine. Mineralization was first identified in the area from top of bedrock geochemical drilling in 1987. Subsequently, while percussion drilling had been undertaken on the target delineating an extensive mineral system, the active mine (Bjorkdal) has been the focus for exploration efforts, leaving Storheden underexplored. In 2017, confirmation drilling and modelling undertaken by Mandalay led to the granting of a mining concession in 2018 encompassing the confirmed mineralized zone.

During 2023, a total of 5,149 m were drilled across 22 drill holes. Two separate targets were identified for drill testing:

1. Depth extension and verification of system geometries;
2. Strike extension of the system to the southeast where the Storheden shear is interpreted to interact with the marble horizon.

The primary aim of the 2023 deeps drilling campaign was to validate historical intercepts from percussion drilling and explore the down-dip extensions of the mineralized zone. Investigating the depth potential is important as the deposit is situated in part below the Bjorkdal tailings storage facility.

Previous models for the Storheden deposit have been limited by the lack of diamond drill core, with most data derived from percussion drilling. However, oriented core obtained from drilling during 2023 has made it possible to verify and extend upon existing models, demonstrating the down-dip continuity of mineralized veins controlled by a moderately, north- to northeast-dipping system of shears that runs parallel to the Skellefte-Vargfors contact.

Mineralized fluids appear to have utilized the rheological contact between relatively rigid volcanics of the Skellefte group and weaker sedimentary sequences of the overlying Vargfors group during deformation, in a similar manner to how shearing, fluid flow and mineralization in the Bjorkdal deposit is localized along the marble.

Mineralization in the Bjorkdal deposit has significant vertical continuity, with known mineralization dipping to the north-west along a slope distance of 1,500 m, while remaining open at depth. The potential for similar down-dip continuity of mineralization in Storheden remains open, with 2023 drilling demonstrating that mineralization extends beneath shallow historical intercepts.

Future programs will further test the down-dip potential of mineralization at Storheden, while extending the coverage of oriented drill core to verify historic data obtained from percussion drilling, particularly within the central section of the Storheden deposit.

Gold mineralization occurs predominantly in quartz veins, ranging in thickness from less than a centimetre to more than several decimetres. Gold-rich quartz veins are often associated with minor sulphides such as pyrrhotite, pyrite, chalcopyrite and arsenopyrite. In addition, scheelite, tsumoite and free gold are commonly observed in mineralized quartz veins.

During 2023, a limited drill program totalling 1,116 m across six drill holes targeted the eastern extension of the marble horizon hosting the Bjorkdal deposit, which is also situated along the projected southeastern extension of the Storheden shear system.

No drilling has previously targeted this area; however, limited historic drilling to the east has intercepted minor mineralized quartz veins. Despite its promising structural setting, the 2023 drilling showed that this area lacks the pervasive veining characterizing the Bjorkdal and Storheden deposits. This is tentatively attributed to a thickening of the marble toward the northern margin of the Bjorkdal dome that may have accommodated strain during deformation, inhibiting fracturing and veining within in its hanging and footwall.

Drilling and assaying

At Bjorkdal, all diamond drill core was logged and sampled by Bjorkdal geologists. Exploration drill hole samples were sent to CRS Laboratories Oy in Kempele, Finland, for sample preparation and assaying.

Assaying was primarily conducted utilizing the Pal1000 cyanide leaching processes. For sulphide-rich samples, fire assaying conducted at MSALABS (FAS-221, 50-gram charge) in Canada, following sample preparations (crushing, pulverizing) at CRS Kempele. Mandalay's rigorous quality assurance/quality control program included the use of standard reference samples, blanks, duplicates, repeats and internal laboratory quality assurance procedures (see March 31, 2023, technical report entitled "Technical Report on the Bjorkdal Gold Mine, Sweden," available on SEDAR+, which contains a complete description of drilling, sampling and assaying procedures).

Qualified person

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

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, ramping up production from deeper Shepherd veins, both of which will continue to supply high-quality ore to the processing plant, and to extend mineral reserves. At Bjorkdal, the company will continue to produce 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.