Mandalay Resources Discovers High-Grade Skarn and Provides Update on Near Mine Exploration at Björkdal

TORONTO, July 14, 2025 (GLOBE NEWSWIRE) -- Mandalay Resources Corporation ("Mandalay" or the "Company") (TSX: MND, OTCQB: MNDJF) reports continued exploration success at its Björkdal mine in Sweden, including the exciting discovery of a new underground high-grade skarn zone near existing mine development which could bring higher grades to the mill in the near-term. Additionally, ongoing infill and extension drilling to grow resources at the Main (Eastern Extension) and North Zones are delivering above expectation.

New Drilling Highlights:

• New Discovery - Lake Zone Skarn:
  • Near-mine, high grade domain offers short-term production potential
  • 34.2 g/t gold over 9.20 m (ETW 3.15 m) in MU24-034;
  • 16.2 g/t gold over 19.00 m (ETW 4.92 m) and;
  • 53.5 g/t gold over 2.00 m (ETW 0.85 m) in MU24-033;
    
    
• Main Zone (Eastern Extension) Infill Drilling:
  
  • Consistent mineralization confirmed down to 870 m
  • 10.8 g/t gold over 9.60 m (ETW 5.51 m) and;
  • 15.2 g/t gold over 3.10 m (ETW 1.78 m) in MU25-008 and;
  • 4.3 g/t gold over 5.25 m (ETW 4.55 m) in MU24-034;
    
    
• North Zone Below Marble Infill Drilling:
  
  • Mineralization open to the north and west; new drill platform to improve access in H2 2025
  • 157.0 g/t gold over 0.60 m (ETW 0.42 m) in MU25-004;
  • 40.1 g/t gold over 0.70 m (ETW 0.49 m) in MU25-002 and;
  • 37.7 g/t gold over 0.60 m (ETW 0.46 m) in MU25-003.

Note: ETW refers to the Estimated True Width of the intercept. Further intercept details can be found in the Appendix to this document. North Zone Below Marble was the new underground gold domain discovered H2 2024 which exhibits consistent, high-grade veining approximately 200 metres north of the current underground mine.

Chris Davis, VP of Exploration and Operational Geology, commented: “The discovery of a high-grade skarn lens near mining infrastructure in Lake Zone has the potential to deliver higher-grade feed to the mill in the near term. Contiguous and near mine exploration momentum from 2024 has continued throughout 2025, with infill and extension drilling at the North and Main Zones yielding exceptional results. With additional drilling and model refinement underway across all three zones, we are well-positioned to grow our robust mining inventory at Björkdal as well as targeting higher grade margins within the deposit for near term plant processing.

“In the second half of 2025, our focus will be definition drilling at this newly discovered Lake Zone Skarn; ongoing programs at the Main Zone of Eastern Extension; further expansion of North Zone below marble; and an 8,000 metres drill campaign at Storheden to expand and upgrade this promising resource, located just 700 meters from existing underground development, back in 2023.”

2025 Björkdal Near Mine Focus

During the first half of 2025, near mine exploration at Björkdal was focused on the infill and extension of the newly discovered depth extension of North Zone, and the eastern extension of Main Zone. These programs were predominantly oriented to infill and building confidence on Inferred Resources, however, the drilling did intercept strong mineralization at a depth of 870 m which is the deepest found so far in Main Zone.

Also tested was the eastern extension of Lake Zone and whilst intercepts further from the mining front were poorly mineralised an area close to the mine was significantly endowed showing some of the best intercepts returned in 2025. Below are the locations of this drilling.

Figure 1. Perspective view of the Björkdal Mine looking towards the SW highlighting the interaction of the veining (Red), marble (Blue) and Björkdal fault (Yellow). Drilling from the 2025 near mine programs are displayed.

New Discovery: Lake Zone Skarn

In early 2025, Mandalay initiated a depth-testing program at Lake Zone, aimed at evaluating the eastward plunge of veining below the marble unit. Three drill holes were completed, however, results indicated limited veining and sparse mineralization in the targeted area. As a result, the program was temporarily paused to allow for a redesign of the geological model, and resources were redirected toward testing the extension of the Main Zone.

Encouragingly, subsequent drilling intercepted a highly mineralized and skarnified body, now interpreted as a continuation of the previously defined Lake Zone Skarn. Similar bodies have been successfully mined in the past and have contributed significantly to site production. Notably, this newly identified mineralization lies just 20 m from existing development, meaning that, with sufficient drilling and modelling, it could be accessed and brought into production within a relatively short timeframe.

Additional to the highlighted intercepts above drilling in Lake Zone Skarn also produced 10.8 g/t gold over a length of 7.00 m (ETW 2.96 m) in MU24-033 and 4.4 g/t gold over a length of 6.50 m (ETW 4.18 m) in MU25-007.

Figure 2. Plan section of Lake Zone Extension area showing 2025 drilling and newly located veining. 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.

At Björkdal, skarn lenses predominantly occur within and immediately beneath the marble unit, where metal-rich hydrothermal fluids have reacted with carbonate rocks, resulting in the replacement of the original lithology by a suite of calc-silicate minerals. In addition to these, hydrothermal alteration has introduced minerals such as albite and sericite, commonly associated with fluid-rock interaction in metasomatic systems. The marble acts as both a structural trap and a chemically reactive host, facilitating the destabilization of gold-bearing fluids. Gold is subsequently precipitated, primarily along quartz grain boundaries and at the margins of calc-silicate minerals, forming highly enriched mineralized lenses. Below is an example from MU24-034.

Figure 3. Photograph of core from MU24-034 (34.2 g/t gold over 9.2 m (ETW 3.15 m).

Main Zone

On the conclusion of the Lake Zone program, exploration of the eastern extension area moved to target Main Zone with a drilling program designed to both extend mineralization to the east and build confidence in the current Inferred Resources of the area. Five holes have been drilled into the area largely confirming the orientation and endowment of the mineralization. Excitingly, MU25-008 and MH25-009 exhibit veining consistently down hole indicating that the system is still strong a further 400 m down plunge from current development.

Assay highlights additional to those stated above are; 12.6 g/t gold over a length of 2.45 m (ETW 1.41 m) in MU25-009, 16.7 g/t gold over a length of 0.75 m (ETW 0.19 m) in MU25-010, 2.5 g/t gold over a length of 7.30 m (ETW 6.32 m) in MU25-010.

Figure 4. Section looking west of the Main Zone infill 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.

Veining in the area continues to exhibit relatively high-grades with the presence of Tsumoite and gold grades within quartz. The orientation of veining largely follows the north-eastward trend typical of Björkdal however in some areas of complexity, where faulting interacts with veining, it is not uncommon to see irregular veining. These zone, whilst needing further mapping and grade control drilling to define sufficiently, often signify highly productive ore within the mine. In the below figure we see two orientations of veining within Main Zone, both gold bearing.

Figure 5. Photograph of core from MU25-008 (15.2 g/t gold over 3.10 m (ETW 1.78m)

North Zone Below Marble

Exploration activities in the North Zone recommenced in February 2025, with four drill holes targeting the depth extension. The primary objective of this program is to increase geological confidence and support the conversion of Inferred Resources. Drilling has largely confirmed the presence and continuity of veining, consistent with geological models and expectations.

Notably, MU25-003 was pushed to its limit and intercepted veining at the end of the hole grading 15.7g/t gold over 1.10m (ETW 0.90 m) approximately 700 m from existing development, highlighting the strong potential of the zone. Additionally, Hole MU25-004 was testing the upper extent of the system and traversed the Marble horizon which typically bounds the economic sections of veining. No significant mineralisation was intercepted above this unit within this hole (Figure 6).

Importantly, drilling has yet to fully traverse the target domain, which remains open to the north and west. A new drilling platform, scheduled to become operational in the second half of the year, will enhance access to the western extension and support continued delineation of the mineralized system.

Figure 6. Plan section of North Zone below marble showing 2024 drilling and newly located veining. 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.

The veining observed is consistent in orientation across the study area, making it straightforward to correlate between sections. Mineralogically and texturally, the veins closely resemble those found within the Main Zone, exhibiting similar characteristics. They commonly comprise quartz, scheelite, tsumoite, and native gold, indicating a comparable hydrothermal origin and mineralizing event.

Figure 7. Photograph of core from MU25 004 (157.0 g/t gold over 0.60 m (ETW 0.42 m) with insert showing grains of gold and tsumoite within a quartz vein.

Next Steps

Drilling will continue in H2 2025 on both the North Zone and Main Zone extension projects, with a primary focus on expanding the mining inventory. Given its proximity to existing infrastructure and its potential to significantly impact near-term production, the Lake Zone Skarn discovery has already been transitioned to the operational geology team. They are now conducting grade control drilling to further define the mineralized extents and refine grade estimates ahead of mining.

Meanwhile, the summer drilling campaign at Storheden commenced in May, targeting the depth extension of the shallow resource reported earlier this year. As a reminder, the Storheden deposit is located approximately 700 m northeast of the current underground workings and has been delineated over a strike length of approximately 2 km. A total of 8,000 m of drilling is planned during the summer months, with a market update expected later in the year.

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, 2023, 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

Frazer Bourchier
Director, President and Chief Executive Officer

Edison Nguyen
Director, Business Valuations and Investor Relations

Contact:
+1 647.258.9722

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). The Company is focused on growing its production and reducing costs to generate cashflow. Mandalay is committed to operating safely and in an environmentally responsible manner, while developing a high level of community and employee engagement.

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 28, 2025, 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. Significant Intercepts from the Lake Zone drilling program.

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. Significant Intercepts from the Main Zone infill drilling program.

Notes:
1. Where true widths are greater than 1 m, 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 3. Significant Intercepts from the North Zone drilling program.

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

Table 4. Drill Hole Collar Details

Notes:
1. Coordinate System: SWEREF 99