Mr. Scott Moore reports

EURO SUN PROVIDES CORPORATE UPDATE

Euro Sun Mining Inc. has provided a corporate update and comment on the current strategy regarding development of the 10-million-gold-equivalent-ounce Rovina Valley project.

In response to many questions from shareholders, the company would like to provide an update on recent developments at the Rovina Valley project so that all investors have a clear understanding of the ultimate value of this world-class gold development project.

The last two quarters have seen significant progress toward a construction decision for the Rovina Valley project with continuing work on the construction permit and related activities around the process. In addition, the definitive feasibility study, being completed by Senet Pty., continues to progress. In June, the company closed a $22.3-million bought-deal equity financing led by Sprott Capital Partners with BMO Capital Markets. It is expected that the funds raised from the financing will provide the company with the capital required to obtain a construction decision.

The company also made significant changes in its governance and corporate structure with the termination of its relationship with former chairman Stan Bharti and his merchant bank, Forbes and Manhattan Inc. The company also completed a relocation of its registered head office and added two new independent directors to its board. The board now comprises six independent directors and a non-independent director.

The company continues to make progress on its key development catalysts with the two targeted deliverables being the construction permit and the definitive feasibility study. While the company does not currently anticipate it, the current global COVID-19 crisis may have an impact on timing that is hard to predict. Both deliverables are significant risk reduction events for Euro Sun and should have a materially positive effect on the company.

Scott Moore, chairman and chief executive officer, stated: "The last two quarters have come with significant change for the company: operationally with the addition of senior management personnel to advance the permitting and engineering at Rovina Valley; financially with a significant investment by global institutional precious metal funds; and governance-wise through the addition of key independent directors and a relocation of our corporate head office. All of these milestones paired with a rising gold price should serve to highlight the tremendous potential for a revaluation of Euro Sun."

The company will be attending the Precious Metal Summit normally held in Beavercreek, Colo., but this year being held virtually between Sept. 15 and Sept. 17, 2020. Beaver Creek is usually one of the best-attended mining conferences specifically tailored to the junior mining sector with strong support by institutional investors, private family offices and larger mining companies.

Construction permit process

The company would like to remind investors that the exploitation licence ratified by the Romanian government allows the company to make official requests to the County Council of Hunedoara for certificates of urbanism. To advance to the construction phase there are two certificates required, the area land use plan and the project technical design.

The certificate of urbanism for plan (land use) is a documentary process that results in a change of land assignment by the county to permit utility and future development for a category change for economic activities. In essence, a rezoning is required from the current land use being pastoral and/or state forest to zoning for commercial activities.

In order to complete this process, Euro Sun has engaged MetricSpace, an architectural and urban planning firm based in Cluj-Napoca, Romania, to provide all the necessary documentation and support to the chief architect of the county. The company received the rezoning (PUZ) urbanization certificate on June 11, 2020, from Hunedoara county. The company has delivered all documentation to the county technical committee to approve the opportunity agreement, which forms part of the certificate. The public consultation on the zoning plan is expected to occur in mid-October, 2020.

The second certificate of urbanism is for the project technical design. This includes the environmental impact assessment (EIA) of the Rovina Valley project, along with other documentation. International consultancy firm ERM, based in Bucharest, Romania, has been contracted to complete the EIA and environmental social impact assessment process for the Rovina Valley project. Multiple substudies forming part of the project technical design are well under way or completed including climate and weather conditions criteria, traffic baseline study, limited vibration survey and blasting study, landscape baseline and modelling study. Other technical work is also well under way such as water modelling including the geochemistry, surface and groundwater, and water supply to the project, air quality and air modelling, noise modelling, and biodiversity and forestry studies.

The company continues to progress the certificates of urbanism in conjunction with all Romanian laws with the goal of having these certificates completed or substantially complete by end of 2020 so the company can begin construction in early 2021.

Definitive feasibility study

The second key deliverable for 2020 is the completion of a definitive feasibility study for the Rovina Valley project. The company has awarded the feasibility to Senet Pty., based in Johannesburg South Africa.

The National Instrument 43-101-compliant definitive feasibility study will include analysis of: geology and resources, mining and reserves, geochemistry, hydrogeology, geotechnical, process plant, waste management facility, infrastructure, schedule, manpower, capital cost, operating cost, revenue, and financial analysis.

After internal model evaluations the DFS will now include the Rovina open pit sequentially to the Colnic pit in the life-of-mine plan. This will result in significantly more production of both gold and copper due to a longer mine life without affecting initial capital expenditures.

In support of the feasibility, the company has appointed Klohn Crippen Berger (KCB), Canada, as geotechnical contractor. KCB will provide all geotechnical input for both open pits including characterizing pit wall stability and dewatering requirements. Additionally, it will provide geotech engineering for the plant site, crusher, truck shop, fuel depot, process facilities, rope conveyor foundations, diversion tunnel around Colnic pit, low-grade stockpile, office buildings/warehouse, and the waste co-deposition area drilling program and all geotechnical interpretation and reports. KCB will also design the co-depositional facility including geotechnical characteristics of the filter cake and waste rock mixture, detailed stacking plan and general arrangement, detailed design of the internal drainage systems, perimeter berms and runoff/drainage solution management.

DFS progress update

Mining and geology:

• Gap analysis report provided;
• Mining design trade-off studies completed, options presented and selected;
• Whittle optimization completed;
• Geology review completed.

Process and metallurgy:

• Gap analysis report provided;
• Block flow diagram (BFL) for process and waste completed;
• Process flow diagrams (PFDs) completed;
• Process description completed;
• Process design criteria (PDC) completed;
• Process testwork requirements finalized;
• Mass and water balance completed;
• HAZOP 1 completed;
• Mechanical equipment list (MEL) developed.

Discipline engineering (infrastructure, civil, mechanical and electrical)

• Overall layout (general infrastructure location plan) reflecting infrastructure and plant locations finalized;
• Rope conveyor options and railveyor options trade-off to be completed;
• Tunnel versus water diversion study completed;
• Site Infrastructure layout issued;
• Road access and raw water pipeline layouts completed;
• Power supply to site and connections -- trade-off study continuing with local contractor;
• Plant terraces started and it is continuing;
• General site conditions and site design criteria document completed;
• Fuel depot -- scope of study issued for client review.

The company still expects the DFS to be completed by the end of 2020 with the filing of NI 43-101 technical report early in 2021. Unexpected delays due to the COVID-19 pandemic may have an impact to this schedule.

About Euro Sun Mining Inc.

Euro Sun is a Toronto Stock Exchange-listed mining company focused on the exploration and development of its 100-per-cent-owned Rovina Valley gold and copper project located in west-central Romania, which hosts the second-largest gold deposit in Europe.

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