Mr. John Dorward reports

ROXGOLD REPORTS FOURTH QUARTER AND FULL YEAR 2020 RESULTS

Roxgold Inc. has released its fourth-quarter and full-year financial results for the period ended Dec. 31, 2020.

For complete details of the audited consolidated financial statements, and associated management's discussion and analysis, please refer to the company's filings on SEDAR or the company's website. All amounts are in U.S. dollars unless otherwise indicated.

Full-year-2020 highlights

During the year ended Dec. 31, 2020, the company:

Operations:

• Produced 133,940 ounces of gold at an average grade of 8.49 grams per tonne in 2020 -- exceeding the upper end of annual gold production guidance of 130,000 ounces;
• Achieved cash operating costs of $579 per ounce within the annual cost guidance range of $520 to $580 per ounce;
• Processed a record annual throughput of 512,276 tonnes exceeding nameplate capacity by 27 per cent;
• Reported an interim mineral reserves and resources estimate at Yaramoko with total proven and probable mineral reserves increasing by 8 per cent to 710,000 ounces of gold more than replacing depletion of 207,396 ounces during the period from Dec. 31, 2018, to June 30, 2020. Measured and indicated mineral resources increased 4 per cent to 857,000 ounces of gold;

Financial:

• Sold 135,310 ounces of gold for a total of $239.7-million in gold sales in 2020 (140,800 ounces (1) and $196.2-million (1) respectively in 2019);
• Achieved adjusted earnings before interest, taxes, depreciation and amortization (2) of $108.8-million in 2020 compared with $83.3-million in 2019;
• Generated cash flow from mining operations (2) totalling $126.2-million for cash flow from mining operations per share (2) of 34 cents (45 Canadian cents per share);
• Strong free cash flow (before growth spend) (3) of $47.8-million increasing the cash balance by $20.1-million to $61.9-million;
• Strengthened the balance sheet ending the year with a cash balance of $61.9-million and net cash position of $27.3-million;
• Adjusted net income (2) of $38.8-million or 10 cents per share (14 Canadian cents per share) compared with $19.5-million or five cents per share (seven Canadian cents share) in 2019;
• Produced a mine operating margin (2) of $1,079 per ounce in 2020;
• Generated a strong return on equity (2) of 20 per cent in 2020;

Growth:

• Received exploitation (mining) permit and environmental approvals from the government of Cote d'Ivoire to develop and operate the Seguela gold project;
• Expanded Seguela gold project with discovery of the Koula deposit, and an updated mineral resource estimate outlining total indicated mineral resources of 1,044,000 ounces of gold at 2.5 grams per tonne (g/t) and inferred mineral resources of 370,000 ounces at 4.8 g/t;
• Commenced an infill drilling program at Koula with initial results such as 14 metres at 42.9 g/t from 61 metres down hole in SGRD1000, 11 m at 46.2 g/t Au from 48 metres down hole in SGRC799 and 18 m at 22.1 g/t Au from 175 metres down hole in SGRD800 continue to emphasize the high-grade nature of the deposit;
• Commenced early works at Seguela to enable a rapid ramp-up to full construction in 2021 following completion of the feasibility study, which is anticipated for completion in the second quarter of 2021;
• Repurchased a 0.3-per-cent net smelter royalty on Seguela from an original property owner, exercising the right of first refusal to pre-empt an arm's-length acquisition between the property owner and an international royalty company for consideration of $700,000 cash. Seguela continues to have a 1.2-per-cent NSR held by another original property owner under similar terms, including a right of first refusal and a right to acquire the remaining royalty for fair market value after a decision to mine has been made;
• Tested additional mineralization corridors at Boussoura, which targeted the vein corridors to the west of Fofora Main, including a new VC2 prospect with results such as 14 m at 3.6 g/t Au from 44 m in BSR-20-RC-FFR-134, five m at 17.0 g/t Au from 59 m in BSR20-RC-FFR142 and 23 m at 2.0g/t Au from 41 m in BSR-20-RC-FFR-143.

Safety:

• Maintained an industry-leading lost time injury frequency rate (LTIFR) per one million hours of 0.37 for 2.69 million man-hours, including one lost time incident for the 12-month period. This was the first LTI incident at Yaramoko since September, 2018;
• Continued management of the current global COVID-19 crisis with operations at Yaramoko not materially impacted with heightened preventative measures, and response plans in place to mitigate and minimize any potential impacts. Operations continue to operate with reduced personnel due to COVID-19 travel restrictions and protection protocols. The company is continually assessing the health and safety risks to the company's personnel and contractors at its operations and offices.

"Looking back on 2020, Roxgold was able to rise to the challenge of global events by delivering remarkably strong operating and financial results while advancing the near-term growth potential of the company, and ensuring the safety and security of our teams and the communities in which we operate," commented John Dorward, president and chief executive officer of Roxgold. "Roxgold is well on the road towards becoming the West Africa's next multiasset gold producer. The Seguela gold project in Cote d'Ivoire is expected to start construction this year, which has the potential to more than double our production, reserve base, cash flows and earnings -- whilst giving Roxgold further diversification to meet the growing appetite of the investment community.

"The Yaramoko gold complex once again delivered strong operating results in 2020, with gold production of 133,940 ounces at cash operating costs of $579 per ounce exceeding our annual production guidance for the year. Yaramoko continues to be the cash flow engine for this company, as we generated cash flow from mining operations of $126.2-million, achieved adjusted net income of $38.8-million and reported a return on equity of 20 per cent, enabling us to strengthen our balance sheet to end the year with a cash balance of $61.9-million. Since starting production in 2016, Yaramoko has produced over 610,000 ounces of gold, and, as the recent resource update highlighted, continues to demonstrate its ability to replace production and maintain a long mine life.

"Our strong balance sheet has enabled us to continue to invest in our growth projects with significant advancement at Seguela delivered through the hard work of our exploration and project teams, growing in scale with the discovery of the high-grade Koula deposit, and an updated mineral resource estimate outlining total indicated mineral resources of 1,044,000 ounces of gold at 2.5 grams per tonne and inferred mineral resources of 370,000 ounces at 4.8 g/t. This project was acquired for just $20-million in 2019, and we are eager to share with the market the results of the upcoming feasibility study in the second quarter, which we believe will make material improvements upon the already robust preliminary economic assessment announced in April, 2020, with an after-tax NPV of $344-million and 81 per cent IRR at $1,650/oz gold. Finally, during the year we also announced a new high-grade discovery at the Boussoura project in the southern portion of the Hounde greenstone belt in southern Burkina Faso. Since then, we have drilled over 150 holes at Boussoura with consistent assay returns demonstrating broad intersections of mineralization."

                      2020 QUARTERLY AND ANNUAL HIGHLIGHTS
 
                                   Three months ended              Year ended
                                              Dec. 31,                Dec. 31,
                                      2020       2019      2020          2019 
                                                            
Gold ounces produced                35,191     41,162   133,940       142,204
Gold ounces sold (1)                38,504     40,700   135,310       140,800
Financial data
(in thousands of U.S. dollars)
Gold sales (1)                     $72,155     60,208   239,686       196,151
Mine operating profit (4)           27,955     20,423    88,381        60,920
EBITDA (2)                          31,224     24,743    94,857        69,410
Adjusted EBITDA (2)                 34,333     26,993   108,760        83,262
Adjusted EBITDA margin (2)              48%        45%       45%           43%
Net income                           9,917      4,761    24,901         5,663
Basic earnings per share
attributable to
to shareholders                       0.02       0.01      0.05          0.01
Adjusted net income (2)             13,205      7,011    38,804        19,515
Per share (2)                         0.04       0.02      0.10          0.05
Cash flow from mining
operations (2)                      39,261     30,660   126,151        98,339
Per share (2)                         0.11       0.08      0.34          0.27
Return on equity (2)                    20%        11%       20%           11%
Cash on hand end of period          61,878     41,780    61,878        41,780
Total assets                       343,547    291,683   343,547       291,683
Statistics (in dollars)
Average realized selling
price (per ounce)                    1,874      1,479     1,771         1,393
Cash operating cost (per
tonne processed) (2)                   152        146       152           149
Cash operating cost (per
ounce produced) (2)                    553        466       579           489
Total cash cost (per ounce
sold) (2)                              682        576       692           568
Sustaining capital cost
(per ounce sold) (2)                   180        269       262           216
Site all-in sustaining
cost (per ounce sold) (2)              862        845       954           784
All-in sustaining cost
(per ounce sold) (2)                   908        914     1,004           844

2020 in review

Production

At Yaramoko, the company continued to see strong operating performance and cash flow generation. Yaramoko produced 133,940 ounces of gold exceeding the upper end of guidance of 130,000 ounces, and processed a record 512,276 tonnes at an average head grade of 8.5 g/t and mill recoveries of 98.1 per cent.

Cash operating and all-in sustaining costs

Cash operating cost (2) of $579 was within the guidance range of $520 to $580 per ounce. All-in sustaining cost (2) of $1,004 was slightly above guidance range of $930 to $990 per ounce sold primarily due to the following reasons:

• Reduced mining activities at Yaramoko as it continued to operate with reduced personnel due to COVID-19 travel restrictions and protection protocols. Throughput levels were maintained as the processing plant was supplemented with 84,911 tonnes of low-grade stockpile at an average grade of 2.89 g/t processed. The cash cost impact of processing the lower-grade stockpiled material was $35 per ounce sold;
• The higher average realized gold price of $1,771 per ounce also increased royalty payments by $19 per ounce sold compared with guidance assumptions.

Total mine operating expense for the year ended Dec. 31, 2020, include $3.0-million for COVID-19 costs, which reflect incremental costs, primarily related to personnel, camp and transportation costs. These costs are excluded from per ounce cost metrics.

The company continued to strengthen its balance sheet ending the year with approximately $61.9-million in cash and in a net cash position of $27.3-million. The company also has an additional $20-million (U.S.) as a revolving credit facility that remains unutilized at the end of the year.

Growth

The company has had an exceptional year in progressing the Seguela gold project, extending the mine life at Yaramoko and the discovery of Boussoura.

Seguela gold project:

• Received exploitation (mining) permit and environmental approvals from the government of Cote d'Ivoire to develop and operate the Seguela gold project in Q4 2020;
• Expanded Seguela gold project with discovery of the Koula deposit, and an updated mineral resource estimate outlining total indicated mineral resources of 1,044,000 ounces of gold at 2.5 grams per tonne (g/t) and inferred mineral resources of 370,000 ounces at 4.8 g/t;
• Commenced infill drilling program at Koula with initial results such as 14 m at 42.9 g/t from 61 metres downhole in SGRD1000, 11 m at 46.2 g/t Au from 48 metres downhole in SGRC799 and 18 m at 22.1 g/t Au from 175 metres downhole in SGRD800 continue to emphasize the high-grade nature of the deposit;
• Commenced early works at Seguela to enable a rapid ramp-up to full construction in 2021 following completion of the feasibility study which is anticipated for completion in the second quarter of 2021;
• Repurchased a 0.3-per-cent net smelter royalty on Seguela from an original property owner, exercising the right of first refusal to pre-empt an arm's-length acquisition between the original property owner and an international royalty company for consideration of $700,000 cash. Seguela continues to have a 1.2-per-cent NSR held by another original property owner under similar terms, including a right of first refusal and a right to acquire the remaining royalty for fair market value after a decision to mine has been made.

Yaramoko mine complex:

• Reported an interim reserves and resources estimate at Yaramoko with total proven and probable mineral reserves increasing by 8 per cent to 710,000 ounces of gold replacing depletion of 207,396 ounces during the period from Dec. 31, 2018, to June 30, 2020. Measured and indicated mineral resources increased 4 per cent to 857,000 ounces of gold increasing the mineral endowment of measured and indicated mineral resources plus cumulative production to date at Yaramoko to 1.5 million ounces.

Boussoura:

• On Feb. 3, 2020, the company announced a new high-grade discovery at Galgouli and excellent results following up historic drilling at Fofora at the Boussoura project in the southern portion of the Hounde greenstone belt in southern Burkina Faso. During the year, over 150 holes have been drilled with consistent assay returns demonstrating broad intersections of mineralization with lower-grade halos surrounding higher grade quartz veins -- characteristic of the style of mineralization found within the prolific Hounde gold belt.

2021 production and cost guidance:

• Gold production between 120,000 and 130,000 ounces;
• Cash operating cost (2) between $580 and $640/ounce;
• All-in sustaining cost (2) between $895 and $975/ounce;
• Sustaining capital spend between $25-million to $30-million;
• Non-sustaining capital spend of $5-million to $10-million;
• Growth spend (includes exploration and Seguela study spend) of $15-million to $20-million.

Roxgold anticipates the Yaramoko mine complex will produce between 120,000 and 130,000 ounces in 2021 with cash operating costs of $580 to 640/oz and all-in sustaining costs (AISC) of $895 to 975/oz. Sustaining capital is expected to decline this year compared with 2020 due to the completion of decline development at Bagassi South, allowing the operation to focus on stoping operations. The higher gold price increased the impact of royalties by approximately $30/oz.

The production and cost guidance assumes no material operational impacts due to COVID-19. A prolonged COVID-19-related delay or significant deterioration in operating conditions may have an impact on production and cost guidance.

Response to the COVID-19 pandemic

Management of the current global COVID-19 crisis is continuing particularly as various jurisdictions implement measures to reopen or close again their economies. The company has been pro-active in its response to the potential threats posed by COVID-19, and has implemented a range of measures to protect the health and well-being of its employees and host communities while continuing to operate, to the extent possible, in ordinary course of business. These measures include, but not limited to, quarantine, reducing on-site crew sizes, enhanced cleaning and disinfecting protocols, requiring workers with symptoms to self-isolate, and promoting preventative measures including social distancing and frequent hand washing. All employees returning to site are required to complete a testing and screening process. As a result, operations at Yaramoko to date have not been materially impacted by COVID-19. The company is continually assessing the evolving situation, including the health and safety risks to the company's personnel and contractors at its operations and offices.

Whilst production at Yaramoko has been maintained, if a prolonged COVID-19-related interruption were to occur, it may have an impact on the company's operations, financial position and liquidity. The company has strengthened its liquidity position in the quarter with its cash increasing to $61.9-million and unutilized revolving credit facility totalling $20-million.

Review of annual 2020 financial results

Mine operating profit

During the year ended Dec. 31, 2020, revenues totalled $239.7-million (2019: $182.0-million) while mine operating expenses and royalties totalled $81.9-million (2019: $59.9-million) and $14.4-million (2019: $10.0-million), respectively. The increase in sales is primarily due to a 27-per-cent increase in the average realized gold price, offset by a 4-per-cent decrease in ounces sold. Total mine operating expenses included $3.0-million COVID-19-related costs reflecting incremental costs, primarily relating to personnel, camp and transportation costs. During the year, the company achieved total cash cost (2) per ounce sold of $692 and a mine operating margin (2) of $1,079 per ounce sold.

For more information on the cash operating costs (2), see the financial performance of the mine operating activities section of the company's management's discussion and analysis (MD&A) that is available on the company's website and on SEDAR.

During 2020, mine operating expenses totalled $81.9-million compared with $59.9-million in 2019. Mine operating expenses increased in 2020 as Bagassi South achieved commercial production in September, 2019. In 2019, precommercial mine operating expenses of $9.4-million were capitalized to property, plant and equipment.

During 2020, depreciation totalled $55.0-million compared with $51.1-million in 2019. The increase in depreciation is a result of the continued investment in the underground development of 55 zone and Bagassi South combined with higher throughput.

General and administrative expenses

General and administrative expenses for 2020 were $5.6-million compared with $5.4-million in 2019.

Sustainability and other in-country costs

Sustainability and in-country costs totalled $1.6-million for the year ended Dec. 31, 2020, respectively, compared with $3.0-million in the comparative period. The decrease in expenditures primarily relates to timing of community investments in 2020 which were impacted by COVID-19. These expenditures are incurred as part of Roxgold's commitment to responsible operations in Burkina Faso including several sustainability and community projects.

Exploration and evaluation expenses (E&E)

Exploration and evaluation expenses totalled $29.6-million in 2020 compared with $16.1-million in 2019. The significant increase in exploration and evaluation activities was primarily due to the advancement of the feasibility study at the Seguela gold project expected to be released in the second quarter of 2021. There was also drilling at the Boussoura project in Burkina Faso.

E&E expenses totalled $21.4-million at the Seguela gold project, and $8.9-million for Boussoura and Yaramoko in 2020. Expenditures at the Seguela gold project included $15.0-million in drilling costs, and $3.5-million on the PEA study and feasibility study costs. Drilling expenses totalled $2.9-million at the Boussoura project for the current year.

Share-based payments

Share-based payments totalled $3.5-million for the year ended Dec. 31, 2020, compared with $2.5-million in 2019. The increase is mainly due to an increase in the company's share price.

Other income (expenses)

Other income (expenses) totalled $11.1-million in 2020, respectively, compared with $18.7-million in the comparative period. The decrease is mainly attributed to the favourable movement in foreign exchange gain of $2.6-million in 2020 compared with a foreign exchange loss of $2.0-million in 2019.

Current and deferred income tax expense

The current income tax expense for year ended Dec. 31, 2020, has increased to 2019 due to higher mine operating profits. The higher effective tax rate is also driven by the significant increase in exploration expenditures in 2020 incurred in Burkina Faso and Cote d'Ivoire not being tax effected due to the company's status under the mining regulations.

Net income and EBITDA

The company's net income was $24.9-million in 2020 and compared with net income of $5.7-million in 2019. The company's EBITDA (2) was $94.9-million for the year ended Dec. 31, 2020, compared with $69.4-million in 2019.

Net income increased significantly compared with 2019 primarily as a result of higher average realized gold sales price, offset by its focus on growth with significant investments in exploration and evaluation at Seguela and Boussoura, and higher depreciation.

Income attributable to non-controlling interest

For the year ended Dec. 31, 2020, the income attributable to the non-controlling (NCI) interest was $6.0-million. The government of Burkina Faso holds a 10-per-cent carried interest in Roxgold SANU SA and as such is considered Roxgold's NCI. The NCI attributable income is based on international financial reporting standards accounting principles and does not reflect dividend payable to the minority shareholder of the operating legal entity in Burkina Faso.

Financial position

At Dec. 31, 2020, the company had $61.9-million in cash and cash equivalents, with $34.6-million of long-term debt. The restricted cash totalling $2.1-million relates to funds restricted for the purposes of future restoration costs of the Yaramoko gold mine. The company's current assets exceeds its current liabilities by $32.1-million.

With the existing cash balance and the forecasted cash flows from operations, the company is well positioned to finance its cash requirements for the next 12 months which relate primarily to the following activities:

• Underground development at the 55 zone and Bagassi South;
• Exploration programs at Seguela and Boussoura;
• Principal debt and interest repayments;
• The potential commencement of construction at Seguela pending the outcome of the feasibility study.

The company manages its capital structure and adjusts when necessary in accordance with its objectives and changes in economic conditions. During Q2 2020, the company completed the refinancing of its existing credit facility by consolidating the outstanding principal amount of the original credit facility as well as the revolving credit facility into a single credit facility with an outstanding principal balance of $35.6-million as at Dec. 31, 2020.

The company's total assets as at Dec. 31, 2020, has increased by $51.9-million when compared with Dec. 31, 2019. This is mainly driven by the increase in cash, and continuing investment in property, plant and equipment, and increase in working capital.

Corporate social responsibility activities (CSR)

2020 highlights

Despite the COVID-19 worldwide outbreak, Roxgold has continued to focus on its sustainability priorities due to its flexible and collaborative approach with its employees, contractors, communities and governments.

Highlights for 2020 include the following:

• A lost time injury frequency rate (LTIFR) per one million hours of 0.37 for 2.69 million man-hours and one lost time incident on a 12-month period, while the total recordable injury frequency rate (TRIFR) per one million hours was 3.71;
• Successful implementation of a COVID-19 management plan as early as February, protecting the employees and surrounding communities without any downtime in production;
• Continuity of sustainability programs with no significant environmental or community issue while addressing the operational challenges of managing COVID-19;
• Seguela project significantly advanced with the full support of local communities, and the approval of the government granting the environmental and exploitation permits.

2021 CSR program

The 2021 corporate social responsibility will focus on adapting previous programs to maintain the same overall performance while facing COVID-19 challenges.

The company's CSR programs aim to:

• Put the health and safety of stakeholders at the top priority;
• Control and prevent the risks associated with operations including environmental and social matters;
• Develop employee skills and behaviour of safety and social responsibility best practices;
• Support the fight against COVID-19 and malaria diseases at the company's mines and in the nearby communities;
• Build meaningful and respectful relationships in and around the communities where it operates;
• Reduce its footprint through conservation, protection and rehabilitation of biodiversity where possible;
• Ensure extensive and participative monitoring to better protect the environment, and to help local stakeholders understand the mitigation and enhancement measures put in place.

Conference call and webcast information

The company will host a conference call and live webcast on Thursday, March 4, 2021, at 8 a.m. ET to discuss its financial results and business outlook.

Listeners may access a live webcast of the conference call from the events section of the company's website, or participate in the live conference call by dialling toll-free 1-844-607-4367 within North America or 1-825-312-2266 from international locations. Registration is open through the live call, but to ensure you are connected for the full call, the company suggests registering a minimum of 10 minutes before the start of the call.

An on-line archive of the webcast will be available by accessing the company's website. A telephone replay will be available for two weeks after the call by dialling toll-free 1-800-585-8367 within North America or 1-416-621-4642 from international locations, and entering passcode 638 3668.

Notes

(1) For the 12-month period ended Dec. 31, 2019, gold ounces sold and gold sales include precommercial production ounces sold of 10,144 ounces and revenues of $14.2-million. The precommercial production gold sales and mine operating expenses were accounted against property, plant and equipment.

(2) The company provides some non-IFRS measures as supplementary information that management believes may be useful to investors to explain the company's financial results. Please refer to note 18 with heading "non-IFRS financial performance measures" of the company's management discussion and analysis dated March 3, 2021, available on the company's website or on SEDAR for reconciliation of these measures.

(3) This is a non-IFRS financial performance measure with no standard definition under IFRS. Free cash flow (before growth spend) is defined as cash flow from operating activities less cash flow from investing activities excluding growth expenditure (that is, exploration expenditures).

(4) For 12-month period ended Dec. 31, 2019, mine operating profit includes $3.3-million respectively relating to Bagassi South preproduction revenue net of expenses related to the 10,144 ounces sold respectively.

Qualified persons

Paul Criddle, FAusIMM, chief operating officer for Roxgold, a qualified person within the meaning of National Instrument 43-101, has reviewed, verified and approved the technical disclosure contained in this news release.

Paul Weedon, MAIG, vice-president, exploration, for Roxgold, a qualified person within the meaning of National Instrument 43-101, has verified and approved the technical disclosure contained in this news release. This includes the quality assurance/quality control, sampling, analytical and test data underlying this information. For more information on the company's QA/QC and sampling procedures, please refer to the company's annual information form dated Dec. 31, 2019, available on the company's website and on SEDAR.

For further information regarding the Yaramoko gold mine, please refer to the technical report dated Dec. 20, 2017, and entitled "Technical Report for the Yaramoko Gold Mine, Burkina Faso" and the technical report prepared for the Seguela gold project entitled "NI 43-101 Technical Report, Seguela Project, Worodougou Region, Cote d'Ivoire," dated Nov. 30, 2020, available on the company's website and on SEDAR.

About Roxgold Inc.

Roxgold is a Canadian-based gold mining company with assets located in West Africa. The company owns and operates the high-grade Yaramoko gold mine located on the Hounde greenstone belt in Burkina Faso, and is advancing the development and exploration of the Seguela gold project located in Cote d'Ivoire. Roxgold trades on the Toronto Stock Exchange under the symbol ROXG and as ROGFF on OTCQX.

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