Mandalay Resources Continues to Produce Excellent Results From Its Björkdal Eastward Mine Extension Drilling Programs

TORONTO, Jan. 24, 2022 - Mandalay Resources Corp. ("Mandalay" or the "Company") (TSX: MND, OTCQB: MNDJF) is pleased to provide an update on the eastern extension drilling programs at its Björkdal operation in Sweden.

New Drilling Highlights:

Central Zone Extension Infill

• 47.7 g/t gold over 11.7 m (Estimated True Width "ETW" 5.85 m) in MU21-052:
  • Including 1,056.0 g/t over 0.40 m;
• 47.5 g/t gold over 6.4 m (ETW 4.11 m) in MU21-047:
  • Including 716.0 g/t over 0.31 m; and
• 507.0 g/t gold over 0.45 m (ETW 0.23 m) in MU21-051.
  

Central Zone Extension Testing

• 45.5 g/t gold over 2.3 m (ETW 1.15 m) in MU21-028;
• 83.1 g/t gold over 0.4 m (ETW 0.39 m) in MU21-029;
• 8.4 g/t gold over 5.7 m (ETW 5.35 m) in MU21-030; and
• 5.1 g/t gold over 8.0 m (ETW 6.13 m) in MU21-031.

Central Zone - Lake Zone Link

• 13.2 g/t gold over 1.0 m (ETW 0.94 m) in MU21-028; and
• 19.3 g/t gold over 0.4 m (ETW 0.35 m) in MU21-029.

Note: Further intercept details including significant intercepts within composite intervals can be found in Table 1 in the Appendix to this document.

Dominic Duffy, President and CEO of Mandalay, commented:

"Following the success of the Main and Lake zone extension programs (press released June 29, 2021), Mandalay diverted focus to this high potential area. These recent drilling programs have supported the initial finding with some of the best grades seen at Björkdal. Predominantly, the intercepts are interpreted to be direct extensions of the Main and Central zone veining, however, the grades recovered from the Central Extension drilling show a distinct upgrading down plunge.

"The increasing grades within the extensions of the Björkdal deposit at depth to the east mark a significant development in the multifaceted efforts to lift ore grades produced from the mine and will be a major focus of our production in the years to come. The Main, Lake and Central zones are all open to the north-east and those drilling results are showing higher grades the deeper and further to the east we drill. This is very exciting, and this drilling will continue to be one the primary exploration focuses over the course of 2022.

"As a result of these excellent results, a mining concession application has already been submitted to the relevant authorities in order to extend the mining license holdings to cover this eastward extension of veining.

"Lastly, a video has been prepared by Chris Davis, Vice President of Operational Geology and Exploration, to further explain the information in this release. The video can be found on Mandalay's website or by clicking here."

Continued Success Along the Eastern Extension

Since the success of the Lake and Main Zone extension projects, Mandalay has drilled a further 17 holes and 7,253 m into the eastern extension of the Björkdal veining in three programs. These are the Central Zone Extension, Central Zone Conversion and Central to Lake Zone Link drilling programs (See Figure 1). Currently, these results have been connected to the continuation of 21 existing veins and 16 new veins have been discovered. Significant grade also sits outside of currently modelled veining and it is expected that additional drilling will improve confidence in structural connections leading to further vein definition. So far, and to varying degrees, the veining has been extended up to 350 m from current workings.

Figure 1. Perspective view of the Björkdal Mine looking towards the SSW highlighting the interaction of the veining (Red), Marble (Blue) and Björkdal fault (Yellow). Drilling of the latest Central Zone extension programs is also shown:
https://www.globenewswire.com/NewsRoom/AttachmentNg/033c507a-eab3-4f41-b42a-1f8245e8806c

Central Zone Extension

Central Zone abuts the northern boundary of Main Zone. Historically, the Central Zone delivered comparatively lower gold grades, however, the Main Zone extension drilling campaign undertaken in early 2021 produced significant grades along veining interpreted to be part of the Central Zone. These results, along with further advancement in the understanding of the mineral system (see below), led to the Central Zone Extension and subsequent Central Zone Infill programs undertaken during the second half of 2021.

Whilst there are many significant intercepts, the original testing program produced several extraordinary results including 8.4 g/t gold over a true width of 5.35 m. This veining was again intercepted approximately 80 m to the west with an intercept of 5.1 g/t gold over a true width of 6.13 m. Other notable intercepts include 83.1 g/t gold over a true width of 0.39 m and 45.6 g/t gold over a true width of 1.15 m (Figure 2).

Figure 2. Plan section of the Central Zone Extension Testing drilling with the Central Zone Conversion drilling shown faded. Intercepts above 0.5 g/t Au when diluted to 1 m are denoted by dots. Drillholes are annotated with composites over 2 g/t when diluted to 1 m:
https://www.globenewswire.com/NewsRoom/AttachmentNg/ad48ecb7-3d9b-4976-aa76-06b52e9a8f63

Further drilling was undertaken after the successful completion of the Central Zone Extension Testing project, with the intent of further defining the veining in order to estimate Mineral Resources. This drilling produced three of the best intercepts found at Björkdal. An intercept of 47.5 g/t gold over a true width of 4.11 m was recovered including a 716.0 g/t vein with a true width of 0.31 m. This was accompanied by a separate intercept of 507.0 g/t gold over a true width of 0.23 m. In the most recent hole (MU21-052) this veining was again intercepted to the east with a composite grade of 47.7 g/t gold over a true width of 5.85 m. This extraordinary intercept included a vein grading 1,059.0 g/t gold over a true width of 0.23 m.

Figure 3. Plan section of the Central Zone Infill drilling with the Central Zone Extension Testing drilling shown faded. Intercepts above 0.5 g/t Au when diluted to 1 m are denoted by dots. Drillholes are annotated with composites over 2 g/t when diluted to 1 m:
https://www.globenewswire.com/NewsRoom/AttachmentNg/df5be68f-6e21-4b60-97da-1c73b3287348

Visible gold is common within the quartz veining of the project area and is generally accompanied by significant gold grades when assayed. The below images (Figures 4, 5, and 6) are of the three highest grade results in the drilling thus far.

Figure 4. Photograph of core containing gold within MU21-050 (357.25 - 357.65 m - ETW 0.31m @ 716 g/t Au):
https://www.globenewswire.com/NewsRoom/AttachmentNg/1c8fdfc6-32ae-46bb-a75f-b1f408444084

Figure 5. Photograph of core containing gold within MU21-051 (60.7 - 61.15 m - ETW 0.23m @ 507 g/t Au):
https://www.globenewswire.com/NewsRoom/AttachmentNg/03dc303a-b337-467a-8d04-4e2b354035f1

Figure 6. Photograph of a significant intercept within MU21-052 (66.3.7 - 78.0 m - ETW 5.85m @ 47.7 g/t Au):
https://www.globenewswire.com/NewsRoom/AttachmentNg/72c41597-234c-4201-908c-741c761e9355

Central Zone - Lake Zone Link

Late in 2021, it became apparent that a gap of highly prospective ground was underexplored between Lake and Central Zones at depth. Owing to the growing excitement around the area, drilling of the Lake Zone link began in Q4 2021 and is ongoing, however, the initial four holes have intercepted veining extensions of significant endowment, which warrants follow-up drilling. 13.2 g/t gold over a true width of 0.94 m was intercepted in MU21-028 along with 19.3 g/t gold over a true width of 0.35 m in MU21-029.

Figure 7. Plan section of the Central Zone - Lake Zone Link Drilling. Intercepts above 0.5 g/t Au when diluted to 1 m are denoted by dots. Drillholes are annotated with composites over 2.0 g/t Au when diluted to 1 m:
https://www.globenewswire.com/NewsRoom/AttachmentNg/827dfeb4-d8bd-4665-a4da-54b8610e1ba0

Understanding the Upgrading Potential of the Eastward Extension

System analysis of the Björkdal deposit highlights the major faults, such as the Björkdal and Rand faults, encompass the conduit system that brings mineralizing fluids into the deposit. These mineralizing fluids are buffered both chemically and structurally by the marble horizon that overlays most of the Björkdal Deposit. A notable exception is Aurora where the marble horizon dips and is cut across by the Björkdal Fault. In this area mineralization is able to transcend the marble horizon and concentrate above leading to a more diffuse endowment of gold.

Conversely to the east of Björkdal the marble horizon is interpreted to be undisrupted by the Björkdal Fault which persists below the marble. In this setting the concentration zone sits below the marble and is enhanced by the relative low permeability of the marble. It follows that this environment of trapped gold rich fluids is conducive to production of larger gold grains as evidenced by the presence of numerous and significant gold sightings and accompanying grades.

Figure 8. East-West cross-section of area showing the divergence of Marble and Björkdal Shear:
https://www.globenewswire.com/NewsRoom/AttachmentNg/3bc239ff-ed3b-48c0-8abd-a298744371af

Drilling and development of this exciting area will be ongoing though 2022 however, with enhanced exploration budgeting, this target will no longer detain resources from the other significant projects targeting north of Aurora, Skarn horizons and multiple strong regional prospects.

Drilling and Assaying

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

Assaying was conducted utilizing the Pal1000 cyanide leaching processes. Mandalay's rigorous QA/QC program included the use of standard reference samples, blanks, duplicates, repeats, and internal laboratory quality assurance procedures. (see March 30, 2021, Technical Report entitled "Technical Report on the Björkdal Gold Mine, Sweden", available on SEDAR (www.sedar.com), which contains a complete description of drilling, sampling, and assaying procedures).

Qualified Person:

Chris 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 NI 43-101. He has reviewed and approved the technical and scientific information provided in this release.

For Further Information

Dominic Duffy
President and Chief Executive Officer

Edison Nguyen
Manager, Analytics and Investor Relations

Contact:
647.260.1566

About Mandalay Resources Corporation

Mandalay Resources is a Canadian-based natural resource company with producing assets in Australia (Costerfield gold-antimony mine) and Sweden (Björkdal gold mine), with projects in Chile and Canada under closure or development status. The Company is focused on growing its production and reducing costs to generate significant positive cashflow. 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 Björkdal mines. Currently, the Company's main objective is to continue mining the high-grade Youle vein at Costerfield, bring online the deeper Shepherd veins, both of which will continue to supply high-grade ore to the processing plant, and to extend Youle Mineral Reserves. At Björkdal, 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.

Forward-Looking Statements:

This news release contains "forward-looking statements" within the meaning of applicable securities laws, including statements regarding the exploration and development potential of the exploration results disclosed. Readers are cautioned not to place undue reliance on forward-looking statements. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, changes in commodity prices and general market and economic conditions. The factors identified above are not intended to represent a complete list of the factors that could affect Mandalay. A description of additional risks that could result in actual results and developments differing from those contemplated by forward-looking statements in this news release can be found under the heading "Risk Factors" in Mandalay's annual information form dated March 31, 2021, a copy of which is available under Mandalay's profile at www.sedar.com. In addition, there can be no assurance that any inferred resources that are discovered as a result of additional drilling will ever be upgraded to proven or probable reserves. Although Mandalay has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.

Appendix

Table 1. Table of Significant Intercepts

Notes:

1. Where true widths are greater than 1m, grades are not diluted and are presented as the grade over the composite true width.
2. Composites that are below 0.5 g/t Au when diluted to 1 m are not reported in this table.

Table 2. Drill Hole Collar Details

Notes:

1. Coordinate System: SWEREF 99