Björkdal Mine

The Björkdal operation is located within the Boliden mining district, approximately 28 km northwest of the municipality of Skellefteå and approximately 750 km north of Stockholm. Acquired in 2014, the mine produced gold from both an open pit and underground mine. In 2019, Mandalay Resources completed the transition and suspended the open pit operation and now solely operates the underground mine. The target was to eliminate the associated open pit costs and take advantage of processing higher margin underground Aurora zone and stockpiled ore. Mandalay Resources expects to increase the processing rate to 1.45 million tonnes of ore in 2024.

The Björkdal operation has been operational since 1983. Currently, the Björkdal mine produces ore from the Aurora zone underground mine, as well as from a stockpile of low-grade material accumulated over the course of its life of mine. Approximately 80% of the mill feed is attributed to the underground operation and the remining 20% from the stockpiled material.

Underground mining is accomplished by long-hole stoping using a combination of contractors and owner-operated mobile fleet. Access is via dual ramps from the open pit. The processing plant includes: multiple crushers, a ball mill and rod mill, a gravity circuit, and a flotation circuit. Four separate gravity and flotation gold concentrates are produced and sold to smelters in Sweden and Germany.

The Skellefteå region consists of Paleoproterozoic-aged rocks that host several world-class volcanogenic massive sulphide copper, zinc, and lead deposits that have been worked on for nearly a century. The Skellefteå district lies within a large and ancient cratonic block named the Fennoscandian shield. The Fennoscandian shield spans much of Finland and northwestern Russia, extending further westward throughout Sweden and Norway.

Mineralization in the Skellefteå region is focused within and around a regionally extensive, west- to northwest-trending structural feature named the Skellefteå belt. The Skellefteå belt is 120 km long and 30 km wide and consists of deformed and metamorphosed volcanic, sedimentary, and igneous rocks that are all Paleoproterozoic in age.  Deformation and metamorphism is attributed to the Paleoproterozoic-aged Svecokarelian orogeny that occurred around 1.88-1.8 Ga. Metamorphism associated with the Svecokarelian orogeny and ranges in intensity from greenschist to amphibolite facies.

The rocks of the Skellefteå belt are observed to have undergone two major shortening events and metamorphism during the Svecokarelian orogeny. The first of the major shortening events resulted in folding and shearing: folding consisting of vertical to upright isoclinal folds with east- to northeast-striking axial planes, while shear zones are oriented sub-parallel to the axial planes of the folds. The later shortening event produced structures mainly dominated by shearing, with only minor folding coaxially overprinting the earlier generation of folding. These late-stage shears appear to play a crucial role in the formation of the deposit.

The Björkdal gold deposit is a lode-style, sheeted vein deposit that is hosted within the upper-portions of the Skellefteå Group lithologies as they are found at Björkdal (as described above). Gold is found within quartz-veins that range in thickness from less than a few centimetres in width, to over several decimetres in width. These veins are usually observed as vertical to sub-vertical dipping veins that strike between 000° and 090°, with the majority of veins occurring with a strike between 030° and 060°. The veining is locally structurally complex, with many cross-cutting features as well as thin quartz veinlets which introduce mineralization into the wall rocks proximal to the main quartz veins.

Gold-rich quartz veins are most often associated with the presence of minor quantities of sulphide minerals such as pyrite, pyrrhotite, marcasite, and chalcopyrite alongside more common non-sulphide minerals such as actinolite, tourmaline and biotite. Scheelite and bismuth-telluride compounds (i.e., tellurobismuthite and tsumoite) are also commonly found within the gold-rich quartz veins and are both excellent indicators of gold mineralization.

Gold occurs dominantly as free gold, however, gold mineralization is also associated with Bi-telluride, electrum and pyroxenes. Silver is seen as a minor by-product of the Björkdal processing plant, however, very little is known about its deportment within the deposit, although it is assumed to be associated with electrum.

The Mineral Reserves have increased in ore tonnes by 95,000t as a result of the new scheduling methodology undertaken. The Proven and Probable gold ounces have decreased by a total of 80,000 which includes 2023 mining depletion of approximately 50,000 gold ounces. The remainder, approximately 34,000 gold ounces, is due to capping losses in developed areas of the underground mine, and losses due to removal of development and stopes containing a high proportion of Inferred gold ounces.

Björkdal have conducted further exploration drilling since September 30, 2022, and detailed mapping and sampling of on-vein development was routinely carried out during 2023 in accordance with grade control protocols. An updated Long-Term Block Model, that will include drilling up to the end of September 2024, is currently in the process of being developed in preparation for the filing of an updated Mineral Resource estimate and NI 43-101 Technical Report in March 2025.

Bjorkdal Interim Mineral Reserves as of Dec 31, 2023

Bjorkdal Mineral Resources Inclusive of Mineral Reserves Dec 31, 2022