Mr. Matt Manson reports

MARATHON GOLD ANNOUNCES 2020 THIRD QUARTER RESULTS

Marathon Gold Corp. has released its financial results for the third quarter ending Sept. 30, 2020, and provided an update on the company's activities at the Valentine gold project in central Newfoundland.

Third-quarter highlights

• On Sept. 29, 2020, filed the environmental impact statement (EIS) for the Valentine gold project. Over an initial 30-day review period, the Impact Assessment Agency of Canada assessed the EIS for conformity with federal guidelines issued in July, 2019, and, in early November, determined that the EIS is in conformance. As a result, the EIS has now been accepted into the formal federal and provincial technical review processes;
• Continued Marathon's successful drill exploration program within the six-kilometre Sprite Corridor at the project. The Sprite Corridor includes the new Berry zone, where multiple intercepts of significant Main zone-type gold mineralization have now been reported;
• On Aug. 24, 2020, announced an additional 8,000 metres of infill drilling at the Berry zone, bringing the total budgeted 2020 exploration drill program to 52,000 metres. The new infill program will support a mineral resource estimate at Berry scheduled for early 2021;
• Through Sept. 30, 2020, completed 33,637 metres of exploration drilling at the project, comprising 20,400 metres in the Sprite Corridor, including Berry, 2,260 metres at the Narrows prospect located northeast of the Marathon deposit, and 10,977 metres in Footwall areas 1 and 2 located south of the Valentine Lake shear zone;
• Completed a series of geotechnical, hydrogeological and metallurgical bridging activities in anticipation of the commencement of the project feasibility study (FS), which was announced on Aug. 20, 2020;
• Significantly increased its team strength with the appointment of Tim Williams as chief operating officer and Paolo Toscano as vice-president, projects;
• Continued the company's community and stakeholder engagement meetings in the central region of Newfoundland, and announced a series of investments in local development projects as well as financial assistance for certain COVID-19 response initiatives focused on food security, providing support for vulnerable populations and local service organizations; and
• Marathon closed the quarter with cash and cash equivalents of $50.1-million.

Matt Manson, president and chief executive officer, commented: "During the third quarter, we made steady progress with our project development activities at the Valentine gold project. The filing of our EIS in September with the federal and provincial regulators, and its subsequent acceptance into the formal review process, was a significant milestone for us. With the EIS review process now under way, we remain on track with our overall project development timeline, which anticipates construction commencing in early 2022 and first gold production in 2023. In support of this schedule, we have now commenced the formal FS study, and added two senior engineers in Tim Williams and Paolo Toscano to lead our project execution."

Mr. Manson continued: "In parallel with the project development work, we have been very pleased with the progress being made in our exploration drilling at the new Berry zone. Drill intercepts such as 3.33 [grams per tonne gold] over 120 metres (VL-20-833, news release dated July 22, 2020), 1.47 g/t Au over 111 metres (VL-20-838, news release dated Sept. 8, 2020) and 2.61 g/t Au over 85 metres (VL-20-873, news release dated Oct. 21, 2020) are some of the best intercepts returned at the Valentine gold project. We now believe we are delineating a significant Main zone of concentrated quartz-tourmaline-pyrite-gold mineralization over a 650-metre strike extent at Berry, and recent step-out drill results have demonstrated an overall gold mineralizing system of up to 1.5 kilometres in length. We expect to announce additional drill results from this drill program through the fourth quarter and to complete the first mineral resource estimate for Berry in the first quarter of 2021."

The results of operations for the third quarter are summarized in the attached table (all figures are in Canadian dollars unless otherwise noted).

                                         FINANCIAL PERFORMANCE
                              (stated in thousands of Canadian dollars)

                                          Three months ended Sept. 30,      Nine months ended Sept. 30,
                                               2020              2019            2020             2019  
Expenses                                                                                                   
General and administrative expense       $    1,619        $      734     $     4,766       $    2,079  
Exploration expense                              25                24              25               24  
Finance (income)/expense, net                   (29)               77            (183)             (26) 
Other income                                    (33)              (40)           (112)             (94) 
(Loss) before tax                             1,582               795           4,496            1,983  
Deferred income tax expense/(recovery)          499              (177)           (352)              16  
Net (loss)                               $    2,081        $      618     $     4,144       $   1, 999  
Capital expenditures                     $    5,494        $    5,430     $    12,250       $   10,834  

Three months ended Sep. 30, 2020

General and administrative expenses increased from $730,000 to $1.62-million. The principal components of this increase are set out below.

Salaries and wages increased from $190,000 to $470,000, reflecting higher overall compensation costs as a result of the additions made to the company's management team in the second half of 2019 and throughout 2020.

Share-based compensation expense increased from $190,000 to $590,000 in the quarter, resulting primarily from a 37-cent increase in the deferred share unit (DSU) liability resulting from the increase in the company's share price between the end of the second and third quarter of 2020. A total of 1.5 million options were granted in the three months ended Sept. 30, 2020.

Investor relations and corporate communications expenses increased from $60,000 to $180,000, reflecting increased investor and corporate communication initiatives, including engagement with stakeholders in the local communities around the Valentine gold project, and the company hosting a virtual annual and special meeting of shareholders in August, 2020.

Finance (income)/expense, net, increased from an expense of $80,000 to income of ($30,000), as the prior-year quarter included finance expense of $150,000 related to the bought-deal private placement in the third quarter of 2019. The impact of the reduction of this expense was offset partially by $20,000 lower interest income in the quarter, as the interest rate earned on surplus cash balances decreased in the third quarter of 2020 relative to the prior-year quarter.

Other income decreased from $40,000 to $30,000, resulting from a decrease in royalty income due to decreased tonnes mined and grade at the Golden Chest mine, where the company holds a 2-per-cent net smelter returns royalty, offset partially by higher gold prices.

Capital expenditures were consistent with the prior year, excluding working capital movements. The focus in the third quarter of 2020 was completion of the EIS and bridging phase activities related to the initiation of the FS, as well as exploration drilling, while in 2019 the focus was mainly exploration drilling. During the third quarter of 2020, exploration drilling continued to be the largest capital expenditure of the company, with significant progress made toward completion of its 2020 exploration drill program.

Nine months ended Sept. 30, 2020

General and administrative expenses increased from $2.08-million to $4.77-million. The principal components of this increase are set out below.

Salaries and wages increased from $670,000 to $1.92-million, reflecting higher overall compensation costs as a result of the additions made to the company's management team in the second half of 2019 and throughout 2020, as well as $500,000 severance costs incurred during the nine months ended Sept. 30, 2020.

Share-based compensation expense increased from $460,000 to $1.42-million, resulting from an increase of $520,000 in stock option expense, related to vesting of options on completion of the prefeasibility study (PFS) and 2020 employee option grants, and a 44-cent increase in the DSU liability resulting from the increase in the company's share price in the nine months ended Sept. 30, 2020. A total of 4,675,000 options were granted in the nine months ended Sept. 30, 2020.

Investor relations and corporate communication expenses increased from $170,000 to $390,000, reflecting increased investor and corporate communication initiatives.

Finance income, net,increased from $30,000 to $180,000 primarily as a result of a $150,000 decrease in other finance expense related to the bought-deal private placement in the third quarter of 2019 and an increase in interest income from $160,000 to $200,000 as Marathon invested surplus cash from the September, 2019, and May, 2020, equity financings in interest-bearing deposits.

Other income increased from $90,000 to $110,000, resulting from an increase in royalty income due to higher gold prices and increased tonnes mined at the Golden Chest mine.

Capital expenditures increased from $10.83-million to $12.25-million, excluding working capital movements, with the increase reflecting the continued advancement of the Valentine Gold project, including the completion of the updated January, 2020, mineral resource estimate and the April, 2020, PFS, the completion of bridging phase activities related to the initiation of the FS, the completion of the EIS, including various underlying environmental studies and community initiatives, and continued exploration drilling.

Qualified person

Scientific and technical information contained in this news release was reviewed and approved by James Powell, PEng (Newfoundland and Labrador), vice-president of regulatory and government affairs, and Nicholas Capps, PGeo (Newfoundland and Labrador), project manager for exploration at the Valentine gold project. Exploration data quality assurance and control for Marathon are under the supervision of Jessica Borysenko, PGeo (Newfoundland and Labrador), GIS (geographic information system) manager for Marathon Gold. Mr. Powell, Mr. Capps and Ms. Borysenko are qualified persons in accordance with National Instrument 43-101 -- Standards of Disclosure for Mineral Projects (NI 43-101) and have approved the technical content of this MD&A. Marathon's mineral resources and mineral reserves have been calculated in accordance with the standards of the Canadian Institute of Mining, Metallurgy and Petroleum (CIM), and in accordance with the requirements of NI 43-101. Mineral resources which are not mineral reserves do not have demonstrated economic viability. Mineral resources are reported inclusive of mineral reserves. Information on data verification performed on, and other scientific and technical information relating to, the Valentine gold project are contained in the annual information form and the current technical report for the Valentine gold project prepared in accordance with NI 43-101, titled "NI 43-101 Technical Report & Pre-Feasibility Study on the Valentine Gold Project, Newfoundland and Labrador, Canada," dated April 21, 2020, with an effective date of April 18, 2020, and prepared by Ausenco Engineering Canada, available on SEDAR.

Acknowledgments

Marathon acknowledges the financial support of the junior exploration assistance program, Department of Natural Resources, government of Newfoundland and Labrador.

About Marathon Gold Corp.

Marathon is a Toronto-based gold company advancing its 100-per-cent-owned Valentine gold project located in the central region of Newfoundland and Labrador, one of the top mining jurisdictions in the world. The project comprises a series of four mineralized deposits along a 20-kilometre system. An April, 2020, prefeasibility study outlined an open-pit mining and conventional milling operation over a 12-year mine life with a 36-per-cent after-tax rate of return. The project has estimated proven mineral reserves of 1.3 million ounces (26.3 million tonnes at 1.52 g/t) and probable mineral reserves of 0.6 Moz (14.8 Mt at 1.23 g/t). Total measured mineral resources (inclusive of the mineral reserves) comprise 1.9 Moz (31.7 Mt at 1.86 g/t) with indicated mineral resources (inclusive of the mineral reserves) of 1.19 Moz (23.2 Mt at 1.60 g/t). Additional inferred mineral resources are 0.96 Moz (16.77 Mt at 1.78 g/t Au). Please see the technical report dated April 21, 2020, for further details and assumptions relating to the Valentine gold project.

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