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TSX:MNDNOV 2017
A VALUE-FOCUSED PRODUCERWITH A PROVEN STRATEGY FOR SUCCESS
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This presentation contains "forward-looking statements" within the meaning of applicable securities laws, including statements relating to life ofmine production plans, exploration plans and the growth and strategy of Mandalay. Actual results and developments may differ materially fromthose contemplated by these statements depending on, among other things: exploration results or production results not meeting management’sexpectations; capital, production and operating cost results not meeting current plans; and changes in commodity prices and general market andeconomic conditions. The factors identified above are not intended to represent a complete list of the factors that could affect Mandalay. Adescription of additional risks that could result in actual results and developments differing from those contemplated by forward lookingstatements in this news release can be found under the heading “Risk Factors” in Mandalay’s annual information form dated March 31, 2017 andin its final prospectus dated July 18, 2016, copies of which are available under Mandalay's profile at www.sedar.com. Although Mandalay hasattempted 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 beno assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from thoseanticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.
Quality Control and AssuranceQuality control and assurance programs are implemented in line with the standards of National Instrument 43-101.
The exploration programs at Costerfield and Björkdal are supervised by Chris Gregory (Member, Australian Institute of Geoscientists, VP ofOperational Geology for Mandalay and a “Qualified Person” as defined under National Instrument 43-101. Mr. Gregory regularly visits Costerfieldand Björkdal, and supervises the collection and interpretation of scientific and technical information contained in this presentation.
The exploration programs at the Cerro Bayo and Challacollo projects are supervised by Scott Manske, Chief Cordilleran Geologist of MandalayResources, and an Oregon registered Professional Geologist. A “Qualified Person” as defined by NI 43-101, he has reviewed and approved thetechnical and scientific information on these projects contained in the presentation.
Dr. Mark Sander (Member: AusIMM), President and CEO of Mandalay, has visited the Costerfield, Cerro Bayo, Challacollo, and Björkdal andhas supervised the preparation of this presentation.
All currency references in US$ unless otherwise indicated.
Forward-looking Statements
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A Values-Based and Value-Focused Company
WE ARE SUCCESSFUL WHEN:Our employees live and work safely and experience the personal satisfaction that comes with high performance and recognition
The communities in which we operate value our presence
Our environmental impact is minimized and causes no permanent harm
We have a large, diversified set of customers who are delighted with and compete for our products
Our shareholders realize a superior total return on their investment and support our corporate values
Our values are visibly demonstrated by strong local management, at the point of impact with our stakeholders, and coordinated across the Company for maximum effect
Designed for Value: A Proven Strategy
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1. Acquire producing or near-term, cash-flowing mines at a discount to value we will create• Remedy history of underinvestment in sustaining capital that limits current performance
(e.g. underground development, stripping, maintenance)• Introduce major improvements in mining methods• Modernize plant and operating practices to increase throughput & recovery• Institute operating cost reductions and productivity improvements• Leverage commercial savvy and direct smelter relationships to improve treatment costs• Identify and develop unrecognized or underinvested exploration potential to support
expanded production and/or mine life extension2. Reinvest near-term, growing cash flow to fund turnaround plan3. Return cash to shareholders wherever possible4. Repeat5. Divest mature, optimized mines to parties who can create more value than we see
Mandalay acquires undervalued mines in accretive transactions; turns them around to crystallize increased value in the market; returns cash to shareholders
Mandalay has acquired three mines at discount and turned around all three inseven years; looking for more
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Organized to Deliver Maximum Shareholder ValueAcquire only when we see possibility of an accretive transaction with strong value uplift in 3-5 years
Target cash cost of production: 50% of ‘reversion to mean’ metal price
100% ownership; no private royalties, no streams
Flat, virtual, low-cost organizational structure; local GM accountability
Direct relationships and sales contracts with customers
Return cash to shareholders when possible
No hedging of metal prices
Stingy with equity
Reasonably levered
The Mandalay Portfolio
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Targeting Company-wide production of 114-128koz AuEq in 2017
• Björkdal targeting long‐term production of 70koz with a mine life of 15 years @ $750/oz cash costs
• Costerfield steadily replacing P&P Reserves and extending mine life
Björkdal: An Emerging Anchor Asset• 2017E production: 52-58koz gold• 2017E cash costs: $860-$910/oz• Current mine life: 10 years• Reserve replacement ratio: 12.9
(PRODUCTION SUSPENDED)
Costerfield: Dependable Performance• 2017E production (AuEq): 46-54koz• 2017E cash costs: $710-$780/oz• Current mine life: 4 years• Reserve replacement ratio (3-yr Avg): 1.39
Chilean Properties• Cerro Bayo (production suspended)
• Mine life upon restart: 3-4 yrs• Challacollo
• Feasibility-stage project• Targeting production of approx.
4 Moz Ag for a 10-year mine life
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1.7
32
79.967.7 64.4 68
50.9
-0.8
30.6
61.275.9
52.473.4
53.7
20.6
92.2
171.8
166.9
184.6194.5
185.51,224
1,5701,670
1,411
1,2651,160 1,248
0
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800
1,000
1,200
1,400
1,600
1,800
-50
0
50
100
150
200
250
2010 2011 2012 2013 2014 2015 2016
1. The Company defines EBITDA as earnings before interest, taxes and non cash charges/ (income). EBITDA should not be considered by an investor as an alternative to net income or cash flow as determined in accordance with IFRS – EBITDA figures reflect adjusted EBITDA, please see the Company’s Management’s Discussion and Analysis.
Mandalay Acquisition Timeline
2009• Costerfield, Australia• Gold & Antimony• Costerfield, Australia• Gold & Antimony
2010• Cerro Bayo, Chile• Silver & Gold• Cerro Bayo, Chile• Silver & Gold
2014• Challacollo, Chile• Silver & Gold• Challacollo, Chile• Silver & Gold
2014• Björkdal, Sweden• Gold• Björkdal, Sweden• Gold
• No acquisition • Optimize operations• Pay down debt• Exchange warrants• Begin dividends
2011-2013
Revenue EBITDA Cash from Operations Gold Price
Mandalay Financial Performance 2010-2016
Results: Consistent Performance Across the Price CycleU
S$ M
M
Gol
d Pr
ice
(US$
)
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Mandalay’s Strategy in Action: Matched Production and Reserves Growth
With Continuing Capital and Overhead Spending Discipline
15,854 63,351
107,941 126,908
154,810 166,679
114,000-128,000254,000
520,000 633,000
772,000
1,123,000 1,054,000 1,024,000
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
0
50,000
100,000
150,000
200,000
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300,000
2010 2011 2012 2013 2014 2015 2016 2017E
Oz
Au E
q. Y
ear-
End
Res
erve
s
Oz
Au E
q. A
nnua
l Pr
oduc
tion
145,497
12.8
24.9
35.9 34.4
40.3 39.5
29.5
810
392 333
271 260 237 203
-
100
200
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400
500
600
700
800
900
2010 2011 2012 2013 2014 2015 2016-
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
Cape
x sp
ending
per
oz A
u Eq
. $/o
z
Cape
x sp
ending
($ m
)
Mandalay capital spending at operating mines (excluding exploration)
3.6 3.4
5.3 5.1
6.7
4.4 4.8
224
54 49 40 44 26 33
-
50
100
150
200
250
2010 2011 2012 2013 2014 2015 2016-
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
Ove
rhea
d sp
ending
per
Au Eq
. $/o
z
Ove
rhea
d sp
ending
($ m
)
Mandalay corporate overhead spending
Acquisition
9
0
50
100
150
200
250
300
2010 2011 2012 2013 2014 2015 2016
US$
/oz
Au
Eq. P
&P
Add
ed
Mandalay cost of acquiring and discovering reserves
Cumulative Cost per oz Au Eq. Acquired or DiscoveredCost Per oz Au Eq. Discovered in yrCost Per oz Au Eq. Acquired in yr
Adding Reserves Cost-effectively
2016 metal price assumptions: $1,202/oz Au, $16.87/oz Ag and $6,820/t Sb1. Source: BMO
Acquisition + Exploration adds at cumulative average $79/oz Au Eq. (for developed & producing reserves)
Cerro BayoBjörkdal
Median for all Au sector acquisitions2012 – 2017 = $226/oz Au Eq.(1)
1. Exercise Price: C$0.60 – C$1.13 expiry dates ranging from Mar 18, 2018 – Jun 30, 20242. Market Capitalization converted to US$ using exchange rate of 1 CAD = 0.79 USD (Nov. 8, 2017)3. Cash and Cash Equivalents and Interest-Bearing Debt as at end of Q3-2017 (Sept 30, 2017)
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Strong Balance Sheet as of Sept 30, 2017
Millions(Except Share Price Info)
Share price (Nov. 8, 2017 - close) (C$) $0.315/shr
Shares Outstanding 451.3
Stock Options(1) 21.1
RSUs 0.7
Fully Diluted Shares Outstanding 473.1
Market Capitalization (C$) $142.2
Cash and Cash Equivalents (US$)(3) $24.8
Total Interest-Bearing Debt (US$)(3) $39.6
Total Enterprise Value (US$)(2,3) $127.1
Mandalay secured US$40 million revolving credit facility July 25, 2017US$25 million undrawn as of September 30, 2017
Mandalay secured US$40 million revolving credit facility July 25, 2017US$25 million undrawn as of September 30, 2017
Mandalay is well-capitalized to fund its capital plans and growth
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Major Shareholders(1)
Holders Shares (Million) Shares (Percentage)
GMT Capital 72.6
Ruffer LLP 56.5
CI Investments 46.1
AzValor 31.8
Plinian + Management + Directors 30.5
Large Holders (Top-5) 237.5
Other Holders 213.8
TOTAL 451.3
16.1%
12.5%10.2%
7.0%
6.8%
47.4%
Broader Ownership and Higher Liquidity Over Time
Analyst Coverage
Firm Analyst
BMO Brian Quast
Raymond James Chris Thompson
Scotia Trevor Turnbull
Volume
30-day Average Daily Volume 859,264
100-day Average Daily Volume 1,076,243
Average Daily Volume across all trading platforms (as of September 19, 2017)1. Known ownership positions are estimates - as at Nov. 8, 2017 - Ownerships and percentages rounded to one decimal place.
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Creating & Delivering Superior Value for Shareholders
A $10,000 investment on Sept. 24, 2009 would be worth on Nov. 9, 2017(1-4):
• Mandalay: $20,582
• Peer Index: $11,756
• Gold Seniors: $7,462
A $10,000 investment on Sept. 24, 2009 would be worth on Nov. 9, 2017(1-4):
• Mandalay: $20,582
• Peer Index: $11,756
• Gold Seniors: $7,462
Since 2009, Mandalay has returned cash to shareholders via:
• Warrant redemptions
• Share buybacks
• Dividends*
Since 2009, Mandalay has returned cash to shareholders via:
• Warrant redemptions
• Share buybacks
• Dividends*
(1) Adjusted for reinvested dividends. Assumes investment in Mandalay made as part of private placement announced on 24-Sep-09 to fund acquisition of Costerfield and accounts for warrant exchange offer of 0.47 shares per warrant. (2) Peer Index: Alacer, Argonaut, Dundee PM, Kirkland Lake, Klondex, Perseus, Primero, Richmont. (3) Gold Seniors: Agnico Eagle, AngloGold, Barrick, Goldcorp, Gold Fields, Kinross, Newcrest, Newmont, Polyus, Randgold. (4) End date as at Nov 9, 2017.
*Annual cash dividend paid quarterly, based on 6% of the Company’s trailing quarter’s gross revenue and the future cash requirements of the Company
0.0
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10.0
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$40,000
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$80,000
$100,000
Volu
me
(milli
ons)
Inve
stm
ent V
alue
Mandalay(1) Peer Index(2) Gold Senior(3)
Total Return vs. Peers and Seniors through Nov. 9, 2017
Despite 2017 share price decline due to Cerro Bayo issues, Mandalay has delivered almost 2X value of Peers & almost 3X value of Gold Seniors since founding
Despite 2017 share price decline due to Cerro Bayo issues, Mandalay has delivered almost 2X value of Peers & almost 3X value of Gold Seniors since founding
Looking Ahead: Value Drivers
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2017 2018
Björkdal:Reserves growth & mine life extension
expected in EOY 2017 update (due in Jan)
Costerfield: Commitment to develop &
mine Brunswick
Potential Cerro Bayo restart is permit driven; estimated end-2018 – 2019
Björkdal: Flotation
expansion successful
Björkdal: Commission ore sorting
Costerfield: Brunswick capital
development complete (Oct)
Costerfield: 2017 Reserves update
including Brunswick (due in Feb)
Costerfield: First ore from
Brunswick (March)
Björkdal: Q4 3rd straight strong production quarter –commit to ore sorting program (due in Jan)
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Björkdal: Emerging Anchor AssetLand package 12,949 hectares
Ownership 100%
P&P Reserves(1) 10,600,000 t @ 1.68 g/t Au for 574,000 oz
2016 Production 48,143 oz Au
2017E Production 52,000 – 58,000 oz Au
Key accomplishments in 2017:
Grade control working properly and debottlenecking mine operations has increased rate of delivery of high-grade ore
Producing at rate of approximately 60koz/yr in Q2 and Q3, continuing into Q4
(1) Source: Roscoe Postle Associates, Effective September 30, 2016, documented in an independent NI 43-101 Technical Report filed Jan. 27, 2017
Phase 1 of low-grade ore sorting program (crushing and screening) implemented in January with 50% grade upgrade; design and detailed engineering for Phase 2 complete
Flotation expansion project completed on time and on budget, performing as planned (1.7% recovery increase)
Continued exploration success and mine life extension
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Björkdal: Turnaround evident since Q1, 2017
$0$5$10$15$20$25$30$35
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Björkdal keys to turnaround:
Record High Rate Record Low Cost
Introduced best practice mapping, drilling, sampling, and modelling of high nugget-effect gold deposits
Produced a more refined resource model to support more selective underground & open pit mining techniques
Established a local assay lab for faster grade control turnaround
Increased grade of mill feed through more selective underground and open pit mining at an increasing rate (making up for discarding waste)
Implemented crushing and screening of low-grade ore for 50% grade improvement
Flotation expansion completed on time and on budget
Pilot test and detailed engineering for optical ore sorting
Björkdal keys to turnaround:
Record High Rate Record Low Cost
Introduced best practice mapping, drilling, sampling, and modelling of high nugget-effect gold deposits
Produced a more refined resource model to support more selective underground & open pit mining techniques
Established a local assay lab for faster grade control turnaround
Increased grade of mill feed through more selective underground and open pit mining at an increasing rate (making up for discarding waste)
Implemented crushing and screening of low-grade ore for 50% grade improvement
Flotation expansion completed on time and on budget
Pilot test and detailed engineering for optical ore sorting$0
$500
$1,000
$1,500
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Q4‐14 Q2‐15 Q4‐15 Q2‐16 Q4‐16 Q2‐17 $/ oz A
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Consistent tonnes processed each week
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Björkdal Debottlenecking: Lifted Mill OutputConsistently-delivered higher-grade ore results in demonstrated higher production
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Throughput - Saleable ounces Throughput - Recovery
Flotation expansion commissioned in early July – now delivering +1.7% recovery improvement
Output - Saleable ounces Au
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Björkdal: Recent Open Pit & Underground Intercepts Extending Open Pit
Mineralization to NorthExtending Underground Mineralization to North East
Infilling Underground Mineralization to East
Infilling Underground Mineralization to North
Together with H2 2016 results, Mandalay expects significant addition of Mineral Resources and Reserves in 2017 update
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Emerging High-Grade Skarn Intercepts at Björkdal Multiple continuous
bodies of skarn Smaller shoots of
high-grade within skarn bodies
A few ‘000 tonnes of high-grade skarn mined & processed in Q2 with high reconciled grades
Metallurgical testing of different skarn bodies yields specific processing regimens for each
Re-logging and assaying 1,200 m of skarn intercepts drilled and ignored by previous owners
Located in storageRe‐logged and sampledAssays received
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Costerfield: Dependable Performance and Extended LifeLand package 1,293 hectares
Ownership 100%
P&P Reserves(1) 619,000 t @ 6.5 g/t Au; 2.8% Sb
2016 Production 41,310 oz Au, 3,598 t Sb
2017E Production 30,000 – 35,000 oz Au, 3,200 – 3,700 t Sb
Key achievements in 2017: May 2017: Completed capital development to access near-mine shoots July 2017: Completed tailings lift construction for current LOM tailings September 2017: Positive initial results of low-cost aquifer injection test (reduced water handling costs) November 2017: Approved Brunswick development and mine life extension EOY 2017: Expected end of year 2017 Mineral Resource and Reserves update reflecting new Brunswick reserves
(expected release Feb. 2018) Drill intercepts in Costerfield Deeps & Kendall lodes reveal potential next high-grade shoots to be converted
(1) Source: SRK Consulting (Australia), Effective December 31, 2016, documented in an independent NI 43-101 Technical Report filed March 31, 2017
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Costerfield keys to turnaround:Record High Rate Record Low Cost
Improved mine output/mill throughput from 170 tpd to 450 tpd (capped by grid power and site grinding capacity)
Changed mining method from cut-and-fill to blast-hole stoping with cemented rock fill (greater production, lower unit costs)
Increased sub-level spacing from 5 to 10 m
Introduced contract capital development for faster and lower cost results
Replaced mechanized mining fleet
Introduced mobile crusher to decrease particle size of mill feed (better recoveries, higher throughput)
Grew mine life from zero reserves to roughly 4 years while mining continuously for 7 years – discovered Cuffley and N-lode
Costerfield keys to turnaround:Record High Rate Record Low Cost
Improved mine output/mill throughput from 170 tpd to 450 tpd (capped by grid power and site grinding capacity)
Changed mining method from cut-and-fill to blast-hole stoping with cemented rock fill (greater production, lower unit costs)
Increased sub-level spacing from 5 to 10 m
Introduced contract capital development for faster and lower cost results
Replaced mechanized mining fleet
Introduced mobile crusher to decrease particle size of mill feed (better recoveries, higher throughput)
Grew mine life from zero reserves to roughly 4 years while mining continuously for 7 years – discovered Cuffley and N-lode
Costerfield: Turnaround and Continuous Improvement
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Milestone Expected Completion
Mobilize capital development contractor Completed November 2017
Begin on-vein development March 2018
Begin stoping June 2018
Complete capital development October 2018
End of currently approved life July 2020
Brunswick Development and Mining Timeline
Brunswick Development and Mine Life Extension
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Emerging Next Lodes: Costerfield Deeps & Kendall Around and beneath largest historical gold mine in district Structurally exactly analogous to Cuffley discovery beneath Allison lode across flat fault Very high gold and antimony grades Possible 400-500 m by 300-400 m shoot(s) Only 500 m from Brunswick underground infrastructure by this time next year
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Cerro Bayo Silver-Gold Mine: Optimizing the FutureLand package 23,106 hectares
Ownership 100%
P&P Reserves(1) 979,000 t @ 282 g/t Ag; 2.29 g/t Au
2016 Production 13,792 oz Au, 1,731,031 oz Ag
Project Status: Inundation at Delia NW mine on June 9, 2017 Production suspended pending risk assessment for restart Independent root cause investigation report ongoing Risk assessment on restart of Laguna Verde mines due Dec ‘17
No significant loss of Reserves or LOM production in long-term Restart timing depends on receipt of multiple permits required for
the LOM, some of which have been in progress for many months
(1) Source: Roscoe Postle Associates, Effective December 31, 2016, documented in an independent NI 43-101 Technical Report filed March 31, 2017
BRANCA
Target
MARCELA & RAUL VEINS (10 KM BEHIND VIEWPOINT)
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Cerro Bayo keys to turnaround:
Shifted the mining method from shrinkage stoping to completely mechanized blast hole open stoping;
Ramped up throughput from 0 tpd –1,400 tpd from three mines
Installed flotation automation system to maximize silver and gold recoveries
Extended mine life from 3 years 4 years while mining continuously for 6 years
Production suspended pending risk assessment (2-4 mo.) and subsequent permitting for restart
Cerro Bayo keys to turnaround:
Shifted the mining method from shrinkage stoping to completely mechanized blast hole open stoping;
Ramped up throughput from 0 tpd –1,400 tpd from three mines
Installed flotation automation system to maximize silver and gold recoveries
Extended mine life from 3 years 4 years while mining continuously for 6 years
Production suspended pending risk assessment (2-4 mo.) and subsequent permitting for restart
Record High Rate Record Low Cost
Cerro Bayo: Restart, Turnaround, Strong CF, then Flood
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Cerro Bayo: Existing Reserves and New Targets
25
Focus on exploration to add value to restart scenarios
Most of existing reserves under Laguna Verde
Marcela and Raul veins in the old Cerro Bayo sector
New interest in Mesetaand “Sinter” Hill areas due to positive drill results announced by Equus to south of National Park
Cerro Bayo: Prospective Targets at Meseta-Sinter Hill
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“Sinter” Hill -- silicified and brecciated volcanics with abundant, coarse barite
• Possible zone of significant fluid upflow–“steam heated”
• Potential for Au mineralization below
Meseta veins– typical CB-style qtz-adularia-Ag-Au>Base Metal veins
Equus reports Ag-Base metal veins with intermediate argillic alteration some 5 km south
27
Challacollo Silver-Gold Project 2017
Key for 2017: May 2017: Water sufficient to support eventual operation discovered Permitting for production well and further exploration drilling in process Option to optimize project for lower CAPEX
Land package 20,378 hectares
Ownership 100%
Location 130 km SE of Iquique, Chile
Indicated Resource 4.7 MM t @ 200 g/t Ag for 30 MM oz Ag
Elevation Approx. 1,500 ASL
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Invest With Us: How We Will Deploy Your Capital1. Acquire new assets counter-cyclically – at discount to value• Acquire only when we see possibility of an accretive transaction with strong value uplift in 3-5 years• Keep portfolio evergreen – exit assets that do not fit
2. Execute focused operational improvement projects at each site
3. Apply relentless, disciplined financial management
• Maintain good Björkdal performance; further upside includes optical ore sorting, extended mine life with exploration, possibility of significant higher-grade skarn
• Extend Costerfield life with Brunswick lode development and beyond with further exploration• Restart Cerro Bayo with optimized, risk-assessed plan• Optimize Challacollo feasibility with lower capital and operating costs• Mining – projects focused on safer, more mechanized mining with higher extraction, lower dilution
and reduced cost• Metallurgical – projects focused on higher recovery, higher availability, higher quality products with
higher payables and reduced costs• Commercial – more diverse customers paying better terms
• Low cash cost and overheads for high EBITDA margins• Low DD&A for high P&L margins – low acquisition cost, focused CAPEX & exploration • Prudent, low-cost leverage to fund growth when needed• Minimize shareholder dilution• Compare all potential uses of cash to the benefits of returning cash to shareholders
4. Engage all stakeholders in a values-based and value-focused organization
TSX:MND
For more information, please contact:
Greg DiTomasoDirector, Investor RelationsTel: 647.260.1566Email: [email protected] Website: www.mandalayresources.comTwitter: @MandalayAuAg
For more information, please contact:
Greg DiTomasoDirector, Investor RelationsTel: 647.260.1566Email: [email protected] Website: www.mandalayresources.comTwitter: @MandalayAuAg
