Notes to Reserves and Resources

Click the links below for notes to the Mineral Reserves and Mineral Resources estimates for the following properties.

Cerro Bayo | CosterfieldBjörkdal | La Quebrada | Challacollo

Notes to Total Company Reserves:

Sources:
(1) Cerro Bayo: Best estimates are based on the year-end 2016 estimates completed by Roscoe Postle Associates, Effective December 31, 2016, documented in an independent NI 43-101 report filed March 31, 2017, and depleted for production in 2017 and for sterilization of the small volume of Mineral Resources and Reserves in the Delia NW mine, which was the only mine directly impacted by the June 9, 2017 inundation;
(2) Costerfield: SRK Consulting (Australia), Effective December 31, 2017, documented in an independent NI 43-101 report filed March 29, 2018; and
(3) Björkdal: Roscoe Postle Associates, Effective December 31, 2017, documented in an independent NI 43-101 report filed March 29, 2018.

Notes:

1. Reserves are contained at Costerfield, Cerro Bayo and Björkdal properties only.
2. Totals may appear different from the sum of their components due to rounding.

Notes to Total Company Resources:

Sources:
(1) Cerro Bayo: Roscoe Postle Associates, Effective December 31, 2016, documented in an independent NI 43-101 report to be filed within 45 days of February 23, 2017.
(2) Costerfield: SRK Consulting (Australia), Effective December 31, 2017, documented in an independent NI 43-101 report filed March 29, 2018;
(3) La Quebrada Independent Technical Report filed Aug 16, 2012; and
(4) Challacollo: Roscoe Postle Associates, Effective December 31, 2014, documented in an independent NI 43-101 report filed March 31, 2015; and
(5) Björkdal: Roscoe Postle Associates, Effective December 31, 2017, documented in an independent NI 43-101 report filed March 29, 2018.

Notes:

1. Mineral Reserves have not yet been estimated for Challacollo or La Quebrada.
2. Totals may appear different from the sum of their components due to rounding.

Notes to Cerro Bayo Reserves:

Notes:

  1. Mineral Reserves estimated as of December 31, 2016, and depleted for production through to December 31, 2017.
  2. Mineral Reserves stated according to CIM (2014) definitions.
  3. Tonnes and contained Au and Ag are rounded to the nearest thousand.
  4. Totals may appear different from the sum of their components due to rounding.
  5. Veins have been diluted to a minimum mining width of 2.4 m for stoping and 3.0 m for ore development.
  6. A 219 g/t Ag Eq. cut-off grade was applied, using the formula: Ag Eq. = Ag g/t + (66.44 x Au g/t).
  7. Mineral Reserves are estimated using an average long-term Ag price of $18/oz and Au price of $1,200/oz.
  8. The Independent Qualified Person for the Cerro Bayo Mineral Reserve estimate is Normand Lecuyer, P.Eng., RPA, who is a Qualified Person as defined by NI 43-101.

Notes to Cerro Bayo Resources:

Notes:

  1. Mineral Resources estimated as of December 31, 2016 and depleted for production through December 31, 2017.
  2. Mineral Resources stated according to CIM definitions (2014) and include Mineral Reserves.
  3. Tonnes, contained Ag, and contained Au are rounded to the nearest thousand.
  4. Totals may be different from the sum of their components due to rounding.
  5. A 162 g/t Ag Eq. cut-off grade over a minimum mining width of 1.2 m is applied where Ag Eq. is calculated at an Ag price of US$24/oz and Au price of US$1,400/oz. The Ag Eq. value is calculated using the formula: Ag Eq.=Ag g/t + (58.25 x Au g/t).
  6. The Independent Qualified Person for the Cerro Bayo Mineral Resource estimate is Rosmery Julia Cardenas Barzola, P.Eng., RPA, who is a Qualified Person as defined by NI 43-101.
  7. A bulk density of 2.63 t/m³ was used.

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Notes to Costerfield Reserves:

Notes:

  1. Mineral Reserves estimated as of December 31, 2017, and depleted for production through to December 31, 2017.
  2. Tonnes and contained Au (oz) are rounded to the nearest thousand; contained Sb (t) rounded to nearest hundred.
  3. Totals are subject to rounding error.
  4. Lodes have been diluted to a minimum mining width of 1.2 m for stoping and 1.8 m for ore development.
  5. A cut-off grade of 4.0 g/t Au Eq. is applied.
  6. Commodity prices applied are; Au price of $1,200/oz, Sb price of $8,500/t and exchange rate USD:AUD of 0.75.
  7. The Au Eq. value is calculated using the formula: Au Eq. = Au g/t + 1.7 * Sb %.
  8. The Mineral Reserve is a subset, a Measured and Indicated only schedule, of a Life of Mine Plan that includes mining of Measured, Indicated and Inferred Resources.
  9. The Mineral Reserve estimate was prepared by Chloe Cavill, MAusIMM, and Steve Taylor who are full-time employees of Mandalay Resources and was independently verified by Peter Fairfield, FAusIMM, CP (Mining) who is a full-time employee of SRK Consulting who is a Qualified Person as defined by NI 43-101.

Notes to Costerfield Resources:

Notes:

  1. Mineral Resources estimated as of December 31, 2017, and depleted for production through December 31, 2017.
  2. Mineral Resources stated according to CIM (2014) guidelines and include Mineral Reserves.
  3. Tonnes are rounded to the nearest thousand; contained gold (oz) Rounded top the nearest thousand and contained antimony (t) rounded to nearest hundred.
  4. Totals may appear different from the sum of their components due to rounding.
  5. A 3.5 g/t Au Equivalent (AuEq) cut-off grade over a minimum mining width of 1.2 m is applied where AuEq is calculated at a gold price of USD1,400/oz, antimony price of USD10,000/t.
  6. The Au Equivalent value (AuEq) is calculated using the formula: AuEq = Au g/t + 1.75 * Sb %
  7. Geological modelling and sample compositing was performed by Cael Gniel, who is a full-time employee of Mandalay Resources, and Chris Davis, MAusIMM, who is a full-time employee of Mandalay Resources. The models were independently verified by Danny Kentwell FAusIMM, full time employee of SRK Consulting.
  8. The Mineral Resource estimation was performed by Cael Gniel, who is a full-time employee of Mandalay Resources, and Chris Davis, MAusIMM, who is a full-time employee of Mandalay Resources. The resource models were verified by Danny Kentwell FAusIMM full time employee of SRK Consulting. Danny Kentwell is the qualified person under NI 43-101, and is the Competent Person for the Resource.

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Notes to Björkdal Reserves:

Notes:

  1. Mineral Reserves are estimated using drill hole and sample data as of September 30th, 2017, and depleted for production through December 31st, 2017.
  2. CIM (2014) definitions were followed for Mineral Reserves.
  3. Open Pit Mineral Reserves for Björkdal are based on mine designs carried out on an updated resource model, applying a block dilution of 100% at 0.1 g/t Au for blocks above 1.0 g/t and 100% at 0.6 g/t Au for blocks between 0.4 g/t and 1.0 g/t. The application of these block dilution factors is based on historical reconciliation data.  A cut-off grade of 0.4 g/t Au was applied. Open Pit Mineral Reserves for Norrberget are based on 15% dilution at zero grade and 100% extraction.
  4. Underground Mineral Reserves for Björkdal are based on mine designs carried out on an updated resource model. Minimum mining widths of 3.5 m for stopes (after dilution) and 3.8 m for development were used. Dilution was applied by adding 0.5 m on each side of stopes as well as an additional 10% over break dilution.  Further dilution, ranging from 10% to 100%, was added on a stope by stope basis depending on their proximity with other stopes. An overall dilution factor of 14.5% was added to development.   Mining extraction was assessed at 95% for contained ounces within stopes and 100% for development.  A cut-off grade of 1.00 g/t Au was applied. An incremental cut-off grade of 0.4 g/t Au was used for development material.
  5. Stockpile Mineral Resources are estimated at a cut-off grade of 0.40 g/t Au and are based upon surveyed volumes supplemented by production data.
  6. Mineral Reserves are estimated using an average long-term gold price of US$1,200/oz, and an exchange rate of 8.4 SEK/US$.
  7. Tonnes and contained gold are rounded to the nearest thousand.
  8. Totals may appear different from the sum of their components due to rounding.
  9. The Independent Qualified Persons for the Björkdal Mineral Reserve estimate are Ian Weir, P.Eng., (for open pit reserves) and David Robson, P.Eng., (for underground reserves), who are both full-time employees of RPA and Qualified Persons as defined by NI 43-101.
  10. The Independent Qualified Person for the Norrberget Mineral Reserve estimate was also Ian Weir, P.Eng., a full-time employee of RPA, and Qualified Person as defined by NI 43-101.

Notes to Björkdal Resources:

Notes:

  1. Mineral Resources are estimated using drill hole and sample data as of September 30th, 2017, and depleted for production through December 31st, 2017.
  2. CIM (2014) definitions were followed for Mineral Resources.
  3. Mineral Resources are inclusive of Mineral Reserves.
  4. Mineral Resources are estimated using an average Au price of $1,400/oz. and an exchange rate of 8.4 SEK/US$.
  5. Bulk density is 2.74 t/m3.
  6. High gold assays were capped to 30 g/t Au for the open pit mine.
  7. High gold assays for the underground mine were capped at 60 g/t Au for the first search pass and 40 g/t Au for subsequent passes.
  8. High gold assays at Norrberget were capped at 24 g/t Au.
  9. Interpolation was by inverse distance cubed utilizing diamond drill, reverse circulation and chip channel samples.
  10. Open pit Mineral Resources are estimated at a cut-off grade of 0.35 g/t Au and constrained by the resource pit design.
  11. Underground Mineral Resources are estimated at a cut-off grade of 0.95 g/t Au.
  12. For Björkdal, a nominal two metres minimum mining width was used to interpret veins using diamond drill, reverse circulation, and underground chip sampling.
  13. Reported Mineral Resources are exclusive of previously mined underground development and stopes.
  14. Stockpile Mineral Resources are estimated at a cut-off grade of 0.40 g/t Au and are based upon surveyed volumes supplemented by production data.
  15. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
  16. Numbers may not add due to rounding.
  17. The Independent Qualified Person for the Björkdal Mineral Resource estimate is Reno Pressacco, P.Geo., RPA, who is a Qualified Person as defined by NI 43-101. The Independent Qualified Person for the Norrberget Mineral Resource estimate is Jack Lunnon, CGeol, RPA, who is a Qualified Person as defined by NI 43-101.

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Notes to La Quebrada Resources:

Source: (1) La Quebrada Independent Technical Report filed Aug 16, 2012.

Notes:
1. CIM definitions were followed for Mineral Resources.
2. The La Quebrada Mineral Resource estimate was prepared under the supervision of Ronald Luethe, an Idaho registered Professional Geologist and an AIPG Certified Professional Geologist and a Qualified Person under Canadian NI 43-101; it was reviewed and verified by Michael Easdon, an Oregon Registered Professional Geologist (No. 243), an AIPG Member (CPG-07646), and an Independent Qualified Person under Canadian NI 43-101.
3. Mineral Resources are estimated using Inverse Distance Cubed interpolation into 25m*25m*manto thickness blocks, with grade estimates for each manto based only on composites from the same manto.
4. Inferred resource is defined by a minimum of one drill hole within a search radius of 300 m in the same manto.
5. Indicated resource is defined be at least two drill holes within a search radius of 300 m in the same manto.
6. Mineral Resources are reported at a cut-off grade and thickness of 0.3% Cu over 3 metres (“m”).
7. A bulk density of 2.71 t/m3 was used.
8. Numbers may not add due to rounding.

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Notes to Challacollo Resources:

Source: (1) Challacollo Technical Report, Roscoe Postle Associates, Dec 2014, documented in an independent NI 43-101 report filed March 31, 2015.

Notes:

1. Mineral Resources estimated as of 31 December, 2014.
2. Mineral Resources stated according to CIM guidelines.
3. Totals may appear different from the sum of their components due to rounding.
4. Mineral Resources are estimated at a cut-off grade of 60 g/t Ag as interpreted and modeled using GEOVIA Surpac software.
5. A density 2.45 g/cm3 is used as a base density with adjustments according to the variation of the estimated barium, lead and zinc grades.
6. No capping of Ag grades has been applied due to low grade variability. Au grades have been capped at 3 g/t for two sample composites 4.57 g/t Au and 4.11 g/t Au respectively.
7. Numbers may not add due to rounding.
8. The Mineral Resource estimate was supervised by Michael Collins, P.Geo., who is a full-time employee of Mining Plus and a Qualified Person under NI 43-101.