2024 Costerfield Near Mine Focus

During 2024, near mine exploration has focused on building mineral resources and reserves around the immediate mining fronts of Youle and Shepherd, while also testing the significant potential beneath and around the Augusta and Cuffley system to the south.

To the north, infill and extensional drilling of Shepherd has provided further certainty of the system whilst extending the potential of the westernmost vein sets. Above Youle, the Kendall system has been historically mined, however recent drilling suggests there is still significant mineralization left undisturbed between the two mining areas.

At the end of 2023, the focus of resource extension testing moved from Brunswick Deeps to Cuffley as the depth potential of the system became apparent with the success of two initial testing holes to the south of the Cuffley Deeps panel. Mandalay recognized the potential for depth extension and repetition of ore shots and therefore redirected its exploration efforts. Consequently, significant intercepts have been returned at depth within the Cuffley Deeps South area, the Cuffley North area and Cuffley West (Figure 1).

Shepherd and Kendall Extensions

Since the last exploration update (November 2023), 133 diamond drill holes totalling 13,040 m have been drilled in the Shepherd and Kendall areas.

Within Shepherd, the drilling and subsequent geological reinterpretation has provided important insight including the significance of bedding-parallel laminated quartz faults as grade-controlling features. This dynamic has also been demonstrated during mining and integrated into the geological vein model enabling Mandalay to target further areas of potential upgrades near these interactions.

Much of the extension work at Shepherd has concentrated on delineating the westernmost vein (630) within the set. This has also resulted in the identification of parallel veins to the east and west (Figure 2) including some exceptional antimony intersects.

Highlights from this drilling, all in addition to the holes noted above, include:

• 7.4 g/t gold and 49.1% antimony over 0.44 m (ETW 0.22 m) in PD147;

• 18.3 g/t gold and 26.2% antimony over 2.02 m (ETW 1.15 m) in PD190;

• 15.1 g/t gold and 22.2% antimony over 1.26m (ETW 0.53 m) in PD211;

• 26.7 g/t gold and 22.1% antimony over 0.31m (ETW 0.19 m) in SQ040B1 within 611;

• 108.0 g/t gold and 29.1% antimony over 0.58 m (ETW 0.30 m) in PD151;

• 26.4 g/t gold and 36.7% antimony over 0.21 m (ETW 0.18 m) in PD210 and;

• 19.9 g/t gold and 14.1% antimony over 1.69 m (ETW 0.94 m) in PD172 within 632.

Of note is the high-grade antimony values contained within the intercepts; this drilling has confirmed that the 630 vein in this southern area is consistently antimony-rich in addition to gold, which had been inferred from the results presented in Mandalay's 2023 exploration update (see November 7, 2023).

Targeted drilling has consolidated the concept of the Deimos Fault acting as a major grade boundary for the Shepherd system, although promising mineralized structures have been intersected below the fault. There are indications that further south-westerly step-outs of the system beyond the 630 vein exist and could be tested from surface.

Further north, extensive mining optimization drilling has taken place with a particular focus on identifying and delineating high-grade splay zones. These interaction zones and linking structures provide an important opportunity for upside due to the potential for very high grades. The following intercepts demonstrate the high tenor that has been identified in these interaction zones:

• 107.0 g/t gold and 0.1% antimony over 0.55 m (ETW 0.40 m) in PD114;

• 48.2 g/t gold and 1.8% antimony over 2.87 m (ETW 2.47 m) in PD132 within 600;

• 547.3 g/t gold and 0.1% antimony over 0.86 m (ETW 0.75 m) in KD907 within 605;

• 73.5 g/t gold and 11.2% antimony over 0.29 m (ETW 0.27 m) in PD140 and;

• 751.7 g/t gold and 1.8% antimony over 0.22 m (ETW 0.21 m) in PD142 within 610.

In the Kendall zone, drilling aimed to delineate northern and up-dip continuations of the veins initially developed in 2018 when the Youle area was first accessed by Mandalay Resources. At the time, the vein continuity in this area was not well defined due to the compartmentalized geology that has subsequently been resolved through underground drilling. Only surface drilling data with low drilling angles to the veining was available at time of mining, resulting in an inadequate understanding of the Kendall veining. While the potential of this zone was recognized at the time, mining focused on the more consistent and understood Youle vein which the Kendall system coalesces into with depth.

The Kendall area contains many sub-parallel, vertical veins that occupy an approximately 80m wide zone of cleavage development within the broad hinge of the main Costerfield Anticline. Individual veins are influenced by bedding-parallel laminated quartz faults, where they often are seen to step westward along the fault for several metres. Additionally, a north-west trending fold overprint tends to control high-grade shoots within individual veins, which altogether requires close-spaced drilling to fully understand the system.

Workers in the historic Costerfield mine during the mid-1930s mined the Kendall set of veins down to 8 Level (approximately 930RL). They attempted to find new ore panels to the north and west of the mine with a short campaign of diamond drilling, but had limited success. The company at the time was mainly concerned with finding ore at the current level of mining and had little appetite for continuing vertical development or completing the 9 Level crosscut. As shown in Figure 5, the Kendall system dipped below the area of interest (both to the west and north) and remained untested.

The drilling covered in this release has significantly upgraded the "580" vein of the Kendall area up to the historic 8 Level, and has increased the endowment of the 580 vein with the following high-grade intercepts:

• 82.6 g/t gold and 45.0% antimony over 0.20 m (ETW 0.08 m) in BC394;

• 54.7 g/t gold and 63.5% antimony over 0.60 m (ETW 0.25 m) in BC395; and

• 38.0 g/t gold and 35.7% antimony over 1.00m (ETW 0.54 m) in BC399.

This area is readily accessible for mining with minimal capital development required, and has considerable scope for further additions. Upcoming drilling will investigate the Kendall vein set up to the boundary of the Whitelaw Fault footwall, and also extend knowledge north of the current resource boundary.

Cuffley Extension Testing

Late in 2023, drillhole AD200 intersected high-grade mineralization in a previously untested area below and south of the previously mined Cuffley deposit, approximately 150m from the southern boundary of the extant Cuffley resource. Follow-up drilling to date has intersected the mineralized structure in all directions surrounding AD200, with a total of 7,006 m (14 holes). Continued drilling is taking place in order to identify high-grade shoots within the mineralized plane that appears to be the continuation of a NE-striking vertical fault that intersects and offsets at a low angle the mined Cuffley lode. At least two additional parallel fault structures have been delineated in the Cuffley Deeps South target area that are mineralized, and in the case of AD203 contain high-grade mineralization (58.4g/t gold and 17.6% antimony over 0.77 m (ETW 0.55 m)).

AD213 intersected a gold-rich quartz vein approximately 20m east of the main Cuffley Deeps panel (550.0 g/t gold over 0.15 m (ETW 0.12 m)). Follow-up drilling is underway to determine the continuity and extent of this previously unknown mineralization.

The understanding of prospectivity at the northern end of the Cuffley deposit has increased in recent months. Previous mining of Cuffley halted to the north as the tenor decreased. The decline in grade is estimated to be related to a crosscutting north-west trending fold with a faulted hinge. Historic resource definition drilling did not identify economic extensions on the northern side of the fault.

Drillhole TP021 met with success intercepting 4.0 g/t gold and 20.2% antimony over 0.45 m (ETW 0.34 m). Simultaneously, the Cuffley-Brunswick Gap program commenced, drilling across the Costerfield corridor from the east to test a sparsely drilled area north of the Cuffley deposit. The initial drillhole CB001 intersected high-grade mineralization (17.1 g/t gold and 0.3% antimony over 1.20 m (ETW 1.12 m)) 80 m north of the Cuffley resource boundary, 190 m north of the closest drives on the Cuffley lodes.

These two intercepts are directly along strike of Cuffley lode and may indicate that the Cuffley mineralization strengthens in tenor to the north after the interruption caused by the crossing of the Rattler Fault. Access to this area is readily facilitated from the adjacent Brunswick mine area and will be a priority area to extend throughout the remainder of 2024.

Forward Focus of Near Mine Exploration

Given the recent exciting results described above, Cuffley Deeps will remain the primary focus of near mine exploration. Drilling will also continue on the promising northern continuation of the Cuffley System as well as other ongoing targeting of the Brunswick north extension area a potential additional line of veining approximately 300 m to the east of the central corridor.

Regional drilling also continues on depth testing the satellite deposits of Robinsons and True Blue as well as the northern potential of the field.

Drilling and Assaying

All diamond drill core was logged and sampled by Costerfield geologists or contracted geologists with significant industry experience who worked under Costerfield geologist's oversight. All samples were sent to On Site Laboratory Services (OSLS) in Bendigo, Victoria, Australia, for sample preparation and analysis by fire assay for gold, and Atomic Absorption Spectroscopy (AAS) for antimony. Samples featuring coarse grained visible gold were assayed using a variant of fire assay known as screen fire assay. This method is routinely used to mitigate potential problems associated with heterogeneity in the distribution of coarse gold within drill samples. The procedure collects all coarse heterogenous coarse gold by screening at 75μm after crushing and pulverisation, and subsequently fire assays the resultant mass to extinction. A mass weighted average of gold grade of the sample is subsequently calculated from the +75μm and -75μm fractions of the sample. Site geological and metallurgical personnel have implemented a QA/QC procedure that includes systematic submission of standard reference materials and blanks within batches of drill and face samples submitted for assay. Costerfield specific reference materials produced from Costerfield ore have been prepared and certified by Geostats Pty Ltd., a specialist laboratory quality control consultancy. See Technical Report entitled "Costerfield Operation, Victoria, Australia NI 43-101 Report" dated March 28, 2024, available on SEDAR (www.sedar.com) for 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.

About Mandalay Resources Corporation

Mandalay Resources is a Canadian-based resource company with producing assets in Australia (Costerfield gold-antimony mine) and Sweden (Bj?rkdal gold mine). 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 Bj?rkdal 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 Bj?rkdal, 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.

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 Youle, Shepherd, Cuffley and Kendall deposits (Costerfield). 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 28, 2024, 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. Drilling Composites

Table 2. Drill Hole Collar Details

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SOURCE Mandalay Resources Corporation