Mandalay Resources Announces Results of Ongoing Exploration at its Cerro Bayo Silver-Gold Mine, Chile

TORONTO, September 30, 2013 /PRNewswire/ --

Mandalay Resources Corporation ("Mandalay" or the "Company") (TSX: MND) is pleased to provide an update on drilling results generated by the ongoing exploration program at its 100%-owned Cerro Bayo silver-gold mine in Aysen, Chile. Results presented here were acquired from January 1, 2013 to August 30, 2013. Highlights of these results include:

• Resource Extension and Infill Drilling
  • Drilling along Coyita, Marcela Sur, and Delia NW veins has delineated extensions to mineralization which are expected to contribute to the Company's year-end resource update.
  • Drill results reported previously for the Trinidad vein are expected to contribute to the Company's year-end resource update.
• New Target Testing Drilling
  • Drilling on one target (the Carola vein) has generated potentially economic grades and widths which are being investigated further.
  • Drilling on three other targets (Esperanza, Antimonio, and Condor III) intersected veins which have mineralization of typical minable grades but with sub-economic widths. These results suggest specific vectors toward potentially economic grades and widths that are being pursued by additional drilling.
  • Drilling on 11 other targets did not generate intersects of sufficient interest to warrant additional follow up drilling at this time.

Brad Mills, CEO of Mandalay, commented, "Infill and extention drilling at Cerro Bayo continues to delineate additional mineralization along the veins we are currently mining or plan to mine in the near future.  We expect this work to at least replace the Company's resource depletion for 2013 with additions in Coyita, Marcela Sur, Delia NW and Trinidad (adjacent to Delia NW) veins.  In addition, we have begun drilling wide spaced long horizontal holes from underground platforms to test the strike lengths (500 metres each) of Fabiola, Yasna, and Coyita veins under Laguna Verde.  Should these holes prove successful, we anticipate infill drilling and/or underground development to extend Mineral Resources on these veins during 2014."

Mr. Mills continued, "Our new target drill testing has confirmed one target, the Carola vein, with potentially economic grades and widths.  At the Antimonio and Esperanza targets, while initial drilling failed to generate intersections of both mineable grade and width, we have identified possible vectors toward potentially more prospective parts of the systems. We continue to look for the faulted offset portion of the Raul/Cindy vein. Basic stratigraphic, structural, and geochemical work continues on the property to generate new quality targets on the property which we will test by future exploration drilling."

Cerro Bayo drilling and assaying

During the reporting period, Mandalay drilled 22,777 metres ("m") of diamond core in 99 holes for a cost of approximately $3.0 million. Diamond core was logged and sampled by Mandalay geologists. Core samples, including blanks, standards, and duplicates, were assayed on-site at the Compañia Minera Cerro Bayo laboratory. The Cerro Bayo laboratory, which was audited in 2011 by SGS Lakefield Research Ltd., routinely sends check samples to ALS Laboratory (an ISO 9001:2008 and ISO/IEC 17025:2005 certified laboratory) in La Serena, Chile, following QA/QC practices established by Mandalay. See the Company's previously filed technical report entitled "Technical Report on the Cerro Bayo Project, Region XI (Aisen), Chile", dated March 20, 2013, for a full description of the drilling, logging, assaying, and estimation processes, including data verification measures.

Locations of the veins discussed in this Press Release appear in Figure 1.

Cerro Bayo drilling results

Resource extension and infill targets

Mandalay defines resource extension and infill drilling as drilling designed to extend and infill mineralization on veins that already contain estimated Mineral Resources. Results from this drilling will establish the support for the next resource estimate, in this case planned for the end of 2013.

• Coyita vein - The Coyita vein, drilled with 15 holes (3,244 m) in 2013, is thought to extend approximately 500 m further southeast beneath Laguna Verde but, because of its location, has proven difficult to test by surface drilling. Three recent holes have confirmed that the vein extends approximately 80 m beneath the lake with intercepts of potentially economic grade and width (see Table 1 below for Coyita Assay Table and click here for Figure 2: Coyita Long Section). Testing further under the lake, planned for later in 2013, will require horizontal drilling underground from the Yasna vein with the newly-acquired, high-capacity, LM-90 underground drill.
• Marcela Sur vein - Continued drilling on the Marcela Sur vein has demonstrated that mineable thicknesses of potentially economic grade continue 100 m along strike to the northwest as well as in previously untested areas as much as 100 m beneath the current mine workings (see Table 2 below for Marcela Sur Assay Table and click here for Figure 3: Marcela Sur Long Section).  Mineralization has not been closed off at depth.
• Delia NW vein - Ten step-out holes at Delia NW (click here for Figure 1: Cerro Bayo District Targets) intersected potentially economic grades over mineable thicknesses that have potential to incrementally increase resources below the current mine plan (see Table 3 below for Delia NW Assay Table and click here for Figure 4: Delia NW Long Section).  Additionally, a new ladder vein, Orienta, with potentially economic widths and grades was intersected between the Delia NW vein and the Dagny vein. This vein will be infill drilled in future months.

New Target Testing

Mandalay defines new target drill testing as drilling designed to generate first intersections of potentially economic mineralization along veins on which the Company currently has no estimated Mineral Resource.  Results of this drilling are used to prioritize targets for follow-up drilling.

• Carola - This vein, located northeast of the Dagny vein (click here for Figure 1: Cerro Bayo District Targets) was tested by five Mandalay holes (1,485 m). Two holes plus an earlier hole drilled by the previous owner have intersected high gold grades over mineable widths (see Table 4 below for Carola Assay Table and click here for Figure 5: Carola Long Section). Additional drilling and geologic interpretation are required to further understand this highly prospective target.
• Esperanza - Six holes tested this blue-sky target over a strike length of 350 m, intersecting significant mineralization over narrow widths in two holes (see Table 5 below for Esperanza Assay Table and click here for Figure 6: Esperanza Long Section). The vein is narrow where it cuts water-lain tuff and widens to the north where it cuts a rhyolite flow-dome. Follow up drilling is planned to extend the strike length through the rhyolite to the north.
• Antimonio - A set of quartz veins bearing strong antimony geochemical anomalies, but no silver, at surface occurs at Antimonio. Three holes (totalling 659 m) drilled beneath these outcrops have intersected significant silver grades in narrow veins at depth, but no potentially economic grades over mineable widths.  Further drilling to intersect the veins deeper than 200 m is contemplated to test the hypothesis that silver grades may increase further at depth (see Table 6 below for Antimonio Assay Table and click here for Figure 7: Antimonio Cross Section).
• Raul/Cindy (Five holes, 1,164 m) - Four holes drilled to evaluate down dip projections of the vein, previously mined by open pit, returned sub-economic mineralization (see Table 7 below for Raul/Cindy Assay Table and click here for Figure 8: Raul/Cindy Long Section). A fifth hole designed to locate the vein south of a truncating fault failed to locate the vein.  Reinterpretation of the fault offset is in progress.
• The remaining eleven targets - Condor I and III (twelve holes, 1,942 m), Chinita (seven holes, 1,315 m), Chatito (three holes, 518 m), Raul Oeste (three holes, 578 m), Pascuerito (one hole, 496 m), Veta Larga (three holes, 1,263 m), Mallines Oeste (four holes, 1,040 m), Cerro Amarillo (two holes, 535 m), Jermy (one hole, 270 m), Aguila (one hole, 57 m) and Graciela (two holes, 431 m) - returned generally negative or sub-economic results. However, a single deep hole on Condor III intersected 0.91 m at 63.35 g/t Au and 184 g/t Ag, which opens the possibility for deeper, high-grade mineralization which will be followed up with further drilling.

Table 1: 2013 drill intercepts from Coyita

Hole Intercept Intercept True Gold Silver Depth Intercept Intercept Elev From To Length Width Grade Grade Hole_ID (m) UTM_E UTM_N (m) (m) (m) (m) (m) (g/t) (g/t) Mandalay 2013 DCOY029 284.3 271844.3 4841278.9 135.6 171.9 173.8 1.9 1.2 0.40 66 DLV13-006 264.2 271393.8 4841826.7 138.1 212.0 213.1 1.1 0.6 4.16 26 DLV13-010 249.9 271313.6 4841894.9 199.2 171.9 172.5 0.6 0.4 0.10 9 DLV13-014 180.6 271857.3 4841235.8 171.8 142.9 146.3 3.4 1.9 2.54 257 DLV13-015 230.6 271820.1 4841327.9 110.1 169.0 177.2 8.2 4.0 1.50 111 DLV13-018 224.5 271876.3 4841256.3 131.4 163.6 167.1 3.5 1.5 6.46 279 DLV13-020 70.1 271690.0 4841497.5 237.2 54.0 54.5 0.5 0.3 4.39 1186 DLV13-021 209.1 271842.7 4841303.2 123.9 145.8 146.4 0.6 0.2 0.83 110 DLV13-023 242.1 271870.4 4841281.0 87.9 190.1 192.3 2.2 0.8 0.72 58 DLV13-027 284.5 271782.2 4841413.4 117.3 150.4 151.9 1.5 0.5 0.68 73 DLV13-028 152.0 271836.7 4841267.0 173.6 118.0 119.8 1.9 1.2 6.20 1144 DLV13-029 196.5 271844.3 4841278.9 135.6 144.3 145.0 0.7 0.3 0.43 60 DLV13-031 274.6 NO VEIN INTERCEPT DLV13-033 210.0 NO VEIN INTERCEPT DLV13-037 171.4 271734.1 4841441.3 157.3 149.4 152.1 2.7 1.2 2.35 154

Table 2: 2012-13 drill intercepts from Marcela Sur

Hole Intercept Intercept True Gold Silver Depth Intercept Intercept Elev From To Length Width Grade Grade Hole_ID (m) UTM_E UTM_N (m) (m) (m) (m) (m) (g/t) (g/t) Mandalay 2012 DMA001 320.1 279873.1 4841583.7 209.7 222.0 222.3 0.3 0.3 1.76 211 DMA002 204.4 279920.1 4841347.8 236.7 190.7 191.4 0.7 0.6 3.33 608 DMA003 305.9 279856.8 4841509.8 184.8 273.5 276.3 2.8 2.6 0.29 37 DMA004 265.3 280046.5 4840950.3 197.1 233.5 237.2 3.7 3.2 0.16 15 DMA005 175.6 279940.8 4841487.7 288.2 144.0 145.4 1.4 1.4 6.56 495 DMA006 329.2 280027.2 4840955.5 134.6 283.2 284.2 1.0 0.8 0.10 2 DMA007 301.7 279924.1 4841498.6 264.4 156.1 157.9 1.8 1.6 0.97 156 DMA008 302.2 280026.4 4840989.8 141.9 290.5 291.7 1.2 1.0 0.10 2 DMA009 226.6 279912.5 4841584.6 245.8 212.9 216.0 3.1 3.0 1.27 185 DMA010 249.2 279905.9 4841570.3 237.3 209.0 215.4 6.4 6.2 1.02 148 DMA011 430.1 279833.1 4841585.2 178.3 279.4 281.1 1.7 1.6 0.29 37 DMA012 342.4 279890.0 4841484.3 218.8 221.8 222.8 1.0 0.9 1.83 457 DMA013 472.8 279725.4 4841753.9 240.8 226.0 226.6 0.7 0.7 0.51 40 DMA014 400.8 279810.7 4841694.2 252.1 213.3 215.0 1.7 1.6 0.10 3 DMA015 400.8 279685.8 4841766.3 190.7 239.9 240.3 0.4 0.4 0.46 31 DMA016 325.1 279743.5 4841890.4 359.9 46.8 47.1 0.3 0.3 0.63 9 DMA017 415.1 279882.8 4841428.0 171.1 317.4 320.1 2.7 2.7 0.47 106 DMA020 290.8 279883.4 4841280.0 145.4 289.1 290.8 1.7 1.5 1.95 226 DMA021 368.1 279977.0 4841075.3 120.6 318.1 318.6 0.6 0.5 0.40 17 DMA022 400.0 279732.6 4841719.5 197.0 248.5 250.1 1.7 1.6 0.10 2 DMA024 335.2 279689.8 4841742.7 149.7 268.7 269.0 0.3 0.3 0.73 71 DMA020A 395.0 279905.6 4841276.9 123.1 319.4 319.8 0.4 0.4 0.10 2 Mandalay 2013 DCB13-011 308.9 279908.3 4841367.4 170.4 279.3 285.8 6.5 6.1 0.13 13 DCB13-012 340.7 280029.2 4841281.2 135.2 311.9 312.9 1.0 0.8 0.20 28 DCB13-014 320.8 279774.0 4841168.0 96.7 302.2 304.5 2.3 1.2 0.05 1 DCB13-016 323.3 279937.7 4841179.7 148.7 300.1 300.5 0.4 0.4 0.33 298

 Table 3: 2013 drill intercepts from Delia NW

Hole Intercept Intercept True Gold Silver Depth Intercept Intercept Elev From To Length Width Grade Grade Hole_ID (m) UTM_E UTM_N (m) (m) (m) (m) (m) (g/t) (g/t) Mandalay 2013 DLV13-013 249.0 271416.5 4840490.5 87.4 220.0 222.0 2.1 1.6 1.81 105 DLV13-016 260.7 NO VEIN INTERCEPT DLV13-032 290.5 271168.2 4840623.7 14.1 275.0 276.5 1.5 1.2 3.22 121 DLV13-026 272.5 271266.1 4840558.9 -10.4 249.9 251.5 1.6 1.5 9.29 88 DLV13-042 249.2 271171.3 4840650.4 -35.3 211.5 212.6 1.1 1.0 0.27 9 DLV13-043 224.4 271112.5 4840653.7 9.9 210.9 212.1 1.3 1.2 0.52 44 DLV13-047 228.3 271097.1 4840675.0 -10.4 217.2 217.8 0.7 0.6 0.1 2 DLV13-050 272.9 271276.4 4840572.1 -29.3 244.8 246.0 1.2 1.0 0.93 18 DLV13-052 251.7 271473.4 4840457.2 94.2 207.9 212.0 4.1 2.9 2.46 36 DLV13-053 288.3 271530.6 4840426.9 39.9 268.0 268.6 0.6 0.3 0.1 2

Table 4: Drill intercepts from Carola

Hole Intercept Intercept True Gold Silver Depth Intercept Intercept Elev From To Length Width Grade Grade Hole_ID (m) UTM_E UTM_N (m) (m) (m) (m) (m) (g/t) (g/t) Coeur 2012 BPR260 100.0 270288.8 4841768.6 324.8 58.0 60.0 2.0 0.7 4.41 112 BPR241 100.0 270270.9 4841840.5 297.5 77.0 81.0 4.0 2.5 1.2 41 BPR244 100.0 270296.9 4841783.5 286.7 86.0 90.0 4.0 2.5 3.9 113 Mandalay 2012 DCO010 233.7 270296.1 4841626.4 307.7 130.9 132.0 1.1 0.6 21.04 265 Mandalay 2013 DLV13-041 313.3 270304.3 4841627.1 236.9 247.0 248.8 1.8 1.4 0.1 2 DLV13-045 268.3 270276.0 4841740.9 172.8 226.4 228.2 1.9 1.8 2.48 38 DLV13-049 170.3 270272.9 4841814.4 277.1 155.8 160.9 5.1 4.9 5.7 33 DLV13-051 317.1 270246.9 4841654.1 239.9 280.9 282.5 1.6 1.4 0.1 9

Table 5: 2013 drill intercepts from Esperanza

Hole Intercept Intercept True Gold Silver Depth Intercept Intercept Elev From To Length Width Grade Grade Hole_ID (m) UTM_E UTM_N (m) (m) (m) (m) (m) (g/t) (g/t) Mandalay 2013 DCV13-004 137.8 275108.0 4843906.0 274.1 69.0 69.3 0.3 0.2 0.10 2 DCV13-005 200.4 274983.3 4844100.7 276.4 184.7 185.0 0.4 0.3 1.00 419 DCV13-006 134.8 275071.6 4843995.0 272.2 81.7 82.0 0.3 0.2 7.26 72 DCV13-007 247.1 275037.8 4844025.0 211.2 144.2 144.5 0.3 0.1 0.10 2 DCV13-008 205.6 274994.0 4844051.6 335.1 132.5 138.9 6.4 5.5 0.10 2 DCV13-009 225.8 274916.1 4844167.8 326.9 170.1 177.8 7.7 5.6 0.10 3

Table 6: 2013 drill intercepts from Antimonio

Hole Intercept Intercept True Gold Silver Depth Intercept Intercept Elev From To Length Width Grade Grade Hole_ID (m) UTM_E UTM_N (m) (m) (m) (m) (m) (g/t) (g/t) Mandalay 2013 DCV13-001 236.95 275519.6 4843111.0 216.9 224.5 224.8 0.30 0.1 0.10 243 DCV13-002 255.0 275483.9 4843114.0 330.1 63.0 64.0 1.00 0.5 0.23 69 DCV13-003 167.3 275624.5 4843090.0 312.5 87.9 88.7 0.85 0.8 0.33 169

Table 7: 2013 drill intercepts from Raul/Cindy

Hole Intercept Intercept True Gold Silver Depth Intercept Intercept Elev From To Length Width Grade Grade Hole_ID (m) UTM_E UTM_N (m) (m) (m) (m) (m) (g/t) (g/t) Mandalay 2013 DCB13-001 161.8 280355.1 4839608.9 410.3 125.7 128.7 3.0 2.1 0.14 8 DCB13-002 209.7 280330.8 4839533.3 386.9 152.4 152.8 0.4 0.2 0.10 6 DCB13-003 230.6 280322.1 4839672.9 381.8 178.9 179.9 1.0 0.9 0.10 2 DCB13-004 218.9 280292.1 4839713.7 379.5 166.0 166.6 0.6 0.5 0.10 2 NO VEIN DCB13-008 343.3 INTERCEPT

Qualified Person

Ronald Luethe, General Manager of Mandalay Chile Ltda., is an Idaho registered Professional Geologist and an AIPG Certified Professional Geologist. As a Qualified Person defined by NI 43-101, he has reviewed and approved the technical and scientific information on Cerro Bayo contained in this release.

About Mandalay Resources Corporation:

Mandalay Resources is a Canadian-based natural resource company with producing assets in Australia and producing and exploration projects in Chile. The Company is focused on executing a roll-up strategy, creating critical mass by aggregating advanced or in-production gold, copper, silver and antimony projects in Australia and the Americas to generate near-term cash flow and shareholder value.

Forward-Looking Statements:

This news release contains "forward-looking statements" within the meaning of applicable securities laws, including statements regarding the Company's Mineral Resources, Mineral Reserves, ongoing exploration plans and goals. 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 27, 2013, a copy of which is available under Mandalay's profile at  http://www.sedar.com. In addition, there can be no assurance that any current or future 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.

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SOURCE: Mandalay Resources Corporation

For further information:
Bradford Mills
Chief Executive Officer
Greg DiTomaso
Investor Relations
Contact:
+1-647-260-1566