Mandalay Resources May 2017 Investor Presentation

Text Here

This presentation contains "forward-looking statements" within the meaning of applicable securities laws, including statements relating to life of

mine production plans, exploration plans and the growth and strategy of Mandalay. Actual results and developments may differ materially from

those contemplated by these statements depending on, among other things: exploration results or production results not meeting management’s

expectations; capital, production and operating cost results not meeting current plans; and 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 31, 2017 and

in its final prospectus dated July 18, 2016, copies of which are available under Mandalay's profile at www.sedar.com. 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.

Quality Control and Assurance

Quality 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 of

Operational Geology for Mandalay and a “Qualified Person” as defined under National Instrument 43-101. Mr. Gregory regularly visits Costerfield

and 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 Mandalay

Resources, and an Oregon registered Professional Geologist. A “Qualified Person” as defined by NI 43-101, he has reviewed and approved the

technical 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 and

has supervised the preparation of this presentation.

All currency references in US$ unless otherwise indicated.

Forward-looking Statements

2

3

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

Dividend-Paying: (6.1% yield)*

*Trailing 12 months dividends divided by current market capitalization (May 10, 2017)

Designed for Value: How We are Different

4

Acquire only when we see possibility of an immediately 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

Dividend-paying: 6% of trailing quarterly revenue

No hedging of metal prices

Stingy with equity

Lightly levered

5

1.7

32

79.967.7 64.4 68

50.9

-0.8

30.6

61.275.9

52.4

73.4

53.7

20.6

92.2

171.8

166.9

184.6194.5

185.51,224

1,570

1,670

1,411

1,2651,160 1,248

0

200

400

600

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

2010

• Cerro Bayo, Chile

• Silver & Gold

2014

• Challacollo, Chile

• Silver & Gold

2014

• 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$

MM

Go

ld P

ric

e (

US

$)

6

Based on Matched Production and Reserves

With Continuing Capital and Overhead Spending Discipline

15,854 63,351

107,941 126,908

154,810 166,679

254,000

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

250,000

300,000

2010 2011 2012 2013 2014 2015 2016 2017E

Oz A

u E

q. Y

ear-

En

d R

eserv

es

Oz A

u E

q. A

nn

ual

Pro

du

cti

on

145,497 138,000 –

163,000(1)

12.8

24.9

35.9 34.4

40.3 39.5

29.5

810

392333

271 260237 203

-

100

200

300

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

CapexspendingperozAuEq.$/oz

Capexspending($m)

Mandalaycapitalspendingatoperatingmines(excludingexploration)

3.6 3.4

5.3 5.1

6.7

4.44.8

224

54 49 40 4426 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

OverheadspendingperAuEq.$/oz

Overheadspending($m)

Mandalaycorporateoverheadspending

Acquisition

1. Assumes full-year 2017 prices: Au $1,185/oz, Ag $16.72/oz, Sb $7,701/t

7

0

50

100

150

200

250

300

2010 2011 2012 2013 2014 2015 2016

US

$/o

z A

u E

q.

P&

P A

dd

ed

Mandalay cost of acquiring and discovering reserves

Cumulative Cost per oz Au Eq. Acquired or Discovered

Cost Per oz Au Eq. Discovered in yr

Cost Per oz Au Eq. Acquired in yr

And Adding Reserves Cost-effectively

2016 metal price assumptions: $1,202/oz Au, $16.87/oz Ag and $6,820/t Sb

1. Source: BMO

Acquisition + Exploration

adds at cumulative average

$79/oz Au Eq. (for

developed & producing

reserves)

Cerro BayoBjörkdal

Median for all Au sector acquisitions

2012 – 2016 = $254/oz Au Eq.(1)

(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, Klondex, Perseus, Primero, and Richmont. (3) Gold Seniors: Agnico Eagle,

AngloGold, Barrick, Goldcorp, Gold Fields, Kinross, Newcrest, Newmont, Polyus, and Randgold. (4) End date as at April 5, 2017.

*Q3 2010 to May 9, 2017 includes all dividends paid. Source: MetalPrices.com for metal spot prices Index: September 30, 2009 = 100. Mandalay share price: $0.55.

Graph updated quarterly, prices as at the last trading day of each respective quarter.

**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

88

50%

100%

150%

200%

250%

300%

350%

Mandalay Cumulative Returns

6.8% Annual Compounded Rate of Return

Gold

Silver

Creating and Delivering Value for Shareholders

$0

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

2010 2011 2012 2013 2014 2015 2016 2017

Dividends Paid (USD)**

6% of revenues (dividend contribution)

6.8% Cumulative Total Return (% Value Change)*

0.0

5.0

10.0

15.0

20.0

25.0

$0

$20,000

$40,000

$60,000

$80,000

$100,000

Sep-09 Sep-10 Sep-11 Sep-12 Sep-13 Sep-14 Sep-15 Sep-16

Volu

me (

mill

ions)

Invest

ment

Valu

e

Mandalay(1) Peer Index(2) Gold Senior(3)

Total Return vs. Peers and Seniors

A $10,000 investment on September 24, 2009 would be worth today(4):

• Mandalay: $40,668• Peer Index: $10,873• Gold Seniors: $7,309

Record

Dividends

9

Approximately Replaced Depletion in 2016

RESERVES 2016 2015

Au

(koz)

Contained

Ag

(koz)

Contained

Sb

(kt)

Contained

Au

(koz)

Contained

Ag

(koz)

Contained

Sb

(kt)

Contained

Proven 55 931 6.4 57 835 5.5

Probable 720 7,932 11.1 648 14,041 13.4

Proven + Probable 774 8,864 17.5 705 14,876 18.9

RESOURCES 2016 2015

Au

(koz)

Contained

Ag

(koz)

Contained

Sb

(kt)

Contained

Au

(koz)

Contained

Ag

(koz)

Contained

Sb

(kt)

Contained

Measured 96 1,189 11.4 106 1,065 11.0

Indicated 1,190 40,466 20.6 1,013 47,411 27.0

Measured +

Indicated

1,286 41,655 32.0 1,119 48,476 38.0

Inferred 407 10,492 9.2 215 9,884 9.7

1 Source: Cerro Bayo - Roscoe Postle Associates, Effective December 31, 2016, documented in an independent NI 43-101 Technical Report filed Mar. 31, 2017

2 Source: Costerfield - SRK Consulting (Australia), Effective December 31, 2016, documented in an independent NI 43-101 Technical Report filed Mar. 31, 2017

3 Source: Challacollo – Mining Plus, Effective December 31, 2015, documented in an independent NI 43-101 Technical Report filed Mar. 31, 2015

4 Source: Björkdal – Roscoe Postle Associates, Effective September 30, 2016, documented in an independent NI 43-101 Technical Report filed Jan. 27, 2017

10

Mandalay 2017 Production GuidanceTotal Cerro Bayo Costerfield Björkdal Challacollo

Saleable Au Produced oz (‘000) 94-111 12-16 30-37 52-58

Saleable Ag Produced oz (MM) 1.7-2.0 1.7-2.0

Saleable Sb Produced t (‘000) 3.2-3.7 3.2-3.7

Total Saleable Au Eq. Produced* oz (‘000) 138-163

Total Cash Cost per Au Eq. oz* $/oz 860-950 920-1,120 690-780 820-910

Capital Expenditure USD MM 48-61 18-22 9-13 20-25 1

Exploration USD MM 7 2 3 2

*Assumes full-year 2017 prices: Au $1,185/oz, Ag $16.72/oz, Sb $7,701/t

Björkdal• Capital devel. & stripping

$12.1 million

• Flotation circuit upgrade

$2.6 million

• Pump station – 340 level

$600,000

• Tailings lift – $1.1 million

• Fibrecrete station

$0.4 million

Costerfield

• Capital development

$1.9 million

• Water storage & evap.

$3.0 million

• Power equipment

$1.3 million

• Tailings facility

$1.0 million

Cerro Bayo

• Capital development

$15.2 million

• Tailings Dam

$2.5 million

Major capital items support 2017-2018 production

Major Shareholders(1)

Holders Shares (Million) Shares (Percentage)

GMT Capital 65.7

CI Investments 43.4

Ruffer LLP 42.0

Plinian + Management + Directors 30.7

Sentry Investments, Inc. 30.5

Large Holders (Top-5) 212.3

Other Holders 238.9

TOTAL 451.2

14.6%

9.6% 9.3%

6.8%

6.8%

52.9%

11

Broader Ownership and Higher Liquidity Over Time

Analyst Coverage

Firm Analyst

BMO Brian Quast

Desjardins Mike Parkin

Raymond James Chris Thompson

Scotia Craig Johnston

Volume

30-day Average Daily Volume 1,439,093

100-day Average Daily Volume 1,395,712

Average Daily Volume across all trading platforms (as of April 25, 2017)

1. Known ownership positions are estimates - as at April 25, 2017 - Ownerships and percentages rounded to one decimal place.

1. Exercise Price: C$0.60 – C$1.13 expiry dates ranging from Mar 18, 2018 – Jun 30, 2024

2. Market Capitalization converted to US$ using exchange rate of 1 CAD = 0.73 USD (May 10, 2017)

3. Cash and Cash Equivalents and Interest-Bearing Debt as at end of Q1-2016 (Mar 31, 2017)

12

Strong Balance Sheet

As at May 9, 2017 Millions

(Except Share Price Info)

Share price (May 9, 2017 - close) (C$) $0.55/shr

Shares Outstanding 451.2

Stock Options(1) 20.9

Fully Diluted Shares Outstanding 472.1

Market Capitalization (C$) $248.2

Cash and Cash Equivalents (US$)(3) $58.9

Total Interest-Bearing Debt (US$)(3) $59.1

Total Enterprise Value (US$)(2,3) $181.2

13

Björkdal Gold Mine: Investment Thesis DemonstratedLand package 12,949 hectares

Ownership 100%

P&P Reserves(1) 10,600,000 t @ 1.68 g/t Au

2016 Production 48,143 oz Au

Key for 2017:

Grade control working properly – now debottlenecking mine operations

to increase rate of delivery of high-grade ore

Phase 1 (crushing and screening) of low-grade ore sorting program

implemented with 50% grade upgrade

Construction of the flotation expansion project to be

commissioned later this year

Continued exploration success

(1) Source: Roscoe Postle Associates, Effective September 30, 2016, documented in an independent NI 43-101 Technical Report filed Jan. 27, 2017

14

Björkdal Operating Performance and Improvements

$0$5$10$15$20$25$30$35

0

100,000

200,000

300,000

400,000

Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17

$/

Ton

ne

Ton

ne

s P

er

Qu

arte

r

Mining Rate and Unit Cost

t Mined Cost/ t Mined

$0

$2

$4

$6

$8

$10

0

100,000

200,000

300,000

400,000

Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17

$/

Ton

ne

Ton

ne

s P

er

Qu

arte

r

Processing Rate and Unit Cost

t Processed Cost/ t Processed

Björkdal Operational Improvements:

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

Establishing a local assay lab for faster grade

control turnaround

Increasing grade of mill feed through more

selective underground and open pit mining at an

increasing rate (making up for discarding waste)

Pilot optical ore sorting

Implemented crushing and screening of low-

grade ore for 50% grade improvement

Committed flotation expansion in construction$0

$500

$1,000

$1,500

0

5,000

10,000

15,000

Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17

$/

oz

Au

Ou

nce

s G

old

Pe

r Q

uar

ter

Saleable Gold Produced and Unit Cost

Au oz Cost/ oz Au

15

Björkdal Grade Improvements – Now Do it Faster

Onsite assay lab for 24-hour turnaround for improved grade

control

Highest grade open pit A ore since 2006

Highest grade underground A ore since 2010

Low-grade ore screening implemented for

50% grade improvement

16

Björkdal: Just Getting Started on Resource Expansion

Source: Roscoe Postle Associates, Effective September 30, 2016, documented in an independent NI 43-101 Technical Report filed Jan. 27, 2017

2014 2015 2016

17

Drilled Since Cutoff Date for Sept. 30 Reserves“In the box” and ready for next update

NorrbergetNylunds and E Pit

Underground

18

Costerfield Gold-Antimony Mine:Turnaround Complete; Dependable Performance

Land 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

Key for 2017:

Completing in May the capital development to access near-mine shoots and support

next few years of production

Tailings lift construction for current LOM tailings

Potential reserve increases at Brunswick and further exploration upside

(1) Source: SRK Consulting (Australia), Effective December 31, 2016, documented in an independent NI 43-101 Technical Report filed March 31, 2017

19

Costerfield Operational Improvements:


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)

Introduced contract capital development

for faster and lower cost results

Increased sub-level spacing from 5–10 m

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 – Cuffley and N-lode

Costerfield: Continuous Improvement

$0

$100

$200

$300

$400

0

20,000

40,000

60,000

Q4-09(Dec. only)

Q4-10 Q4-11 Q4-12 Q4-13 Q4-14 Q4-15 Q4-16

USD

/ To

nn

e

Ton

ne

s P

er

Qu

arte

r



$0

$50

$100

$150

0

20,000

40,000

60,000

Q4-09(Dec.only)

Q4-10 Q4-11 Q4-12 Q4-13 Q4-14 Q4-15 Q4-16

USD

/ To

nn

e

Ton

ne

s P

er

Qu

arte

r



$0

$1,000

$2,000

$3,000

0

5,000

10,000

15,000

20,000

Q4-09(Dec. only)

Q4-10 Q4-11 Q4-12 Q4-13 Q4-14 Q4-15 Q4-16

USD

/ O

z A

u E

q.

Ou

nce

s P

er

Qu

arte

r

Au Equivalent Production and Unit Cost

Oz Au Eq. Cost/ Au Eq. Oz

20

Costerfield Exploration Outcomes “0” reserves at purchase;

Mined continuously for 7 years;

4 years P&P remaining, plus further upside

Source: SRK Consulting (Australia), Effective December 31, 2016, documented in an independent NI 43-101 Technical Report filed on March 31, 2017

21

Brunswick Lode is Current Target to Convert to Reserves

Penguin-Moa panel infilled to indicated

Penguin-Kiwi panel infilled to inferred

Kiwi-Adder panel mineralized, not filled in

Penguin-Moa panel of Indicated not quite

sufficient size for financially attractive

development

Infilling Penguin-Kiwi panel to Indicated may

create acceptable base case project

Confirming and infilling Kiwi-Adder panel

provides upside

22

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

Key for 2017:

Matched 950-1,000 tpd mining/processing rate – on track for restated

guidance

Accelerated development rate at Coyita to reach high-grade ore

Beginning drilling under the middle of Laguna Verde in late 2017 for potential

reserve increases in Coyita, Branca vein, and Yasna Inflection zone

(1) Source: Roscoe Postle Associates, Effective December 31, 2016, documented in an independent NI 43-101 Technical Report filed March 31, 2017

BRANCA

Emerging Vein

Target

MARCELA VEIN

(10 KM BEHIND VIEWPOINT)

23

Cerro Bayo Operational Improvements:

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 at

1,200 tpd to 4 years at 1,400 tpd while

mining continuously for 6 years

Ongoing improvements to increase pace

of development mining


Cerro Bayo Operating Performance and Improvements

$0

$50

$100

0

50,000

100,000

150,000

Q4-10 Q2-11 Q4-11 Q2-12 Q4-12 Q2-13 Q4-13 Q2-14 Q4-14 Q2-15 Q4-15 Q2-16 Q4-16

$/

Ton

ne

Ton

ne

s P

er

Qu

arte

r



$0

$50

0

50,000

100,000

150,000

Q4-10 Q2-11 Q4-11 Q2-12 Q4-12 Q2-13 Q4-13 Q2-14 Q4-14 Q2-15 Q4-15 Q2-16 Q4-16

$/

Ton

ne

Ton

ne

s P

er

Qu

arte

r



$0

$5

$10

$15

$20

0

500,000

1,000,000

1,500,000

Q4-10 Q2-11 Q4-11 Q2-12 Q4-12 Q2-13 Q4-13 Q2-14 Q4-14 Q2-15 Q4-15 Q2-16 Q4-16

$/

oz

Ag

Ne

t B

ypro

du

ct

Oz

Ag/

Qu

arte

r

Saleable Silver Produced & Unit Cost

Ag oz Cost/ oz Ag net Au

24

Cerro Bayo 3 years of reserves at purchase (for 2X worst case value add)

Have mined continuously for 6 years

4 years remaining, plus some upside

Source: Roscoe Postle Associates, Effective December 31, 2016, documented in an independent NI 43-101 Technical Report filed March 31, 2017

25

Challacollo Silver-Gold Project 2017

Key for 2017:

Water exploration in May-June

Capital optimization if water exploration is successful

Land package 20,378 hectares

Ownership 100%

Location 130 km SE of Iquique, Chile

Mineralization Epithermal, oxidized Ag-Au

Elevation Approx. 1,500 ASL

26

Invest With Us: How We Will Deploy Your Capital

1. Acquire new assets counter-cyclically – only at deep discount to value

• Acquire only when we see possibility of an immediately 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

• Exploration – project portfolio targeted on discovery of near-term reserves

• Mining – projects focused on safer, more mechanised 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

• Return cash to shareholders: dividend = 6% trailing qtr. revenues

4. Engage all stakeholders in a values-based and value-focused organization

27

For more information, please contact:

Greg DiTomaso

Director, Investor Relations

Tel: 647.260.1566

Email: [email protected]

Company Website: www.mandalayresources.com

Twitter: @MandalayAuAg