OREANDA-NEWS. Mandalay Resources Corporation ("Mandalay" or the "Company") (TSX:MND) is pleased to provide exploration updates for the first half of 2016 at all four of its properties: the three producing properties Costerfield (Australia), Bjorkdal (Sweden), and Cerro Bayo (Chile).

Dr. Mark Sander, President and CEO of Mandalay, commented, “In the first half of 2016, exploration across the Company demonstrated the potential for significant near-term Mineral Reserve additions at all our operating mines and potential for significant new mineral discoveries at Bj?rkdal and Challacollo. We intend to accelerate exploration at all of our projects in the second half of the year to confirm or convert as much of this potential as possible into Mineral Resources and Reserves by year-end.

“At Costerfield, new mineralized intercepts suggest that at least three branches of the Cuffley lode occur below the King Cobra fault; all three intercepts contain high gold and/or antimony grades typical of what we have found in intercepts of orebodies we are currently mining. We have further demonstrated that N-lode mineralization extends more than 200 metres (“m”) north of its previously documented limits. A new discovery in the nearby New lode also contains a coherent mineralized zone. We are optimistic that further drilling planned for the balance of the year will enlarge and infill all of these emerging lodes so that we can convert these initial drill intercepts into additional Indicated Resources and potential mine life-extending Mineral Reserves at the year-end estimate. All of these mineralized zones are located quite close to our existing infrastructure in N-lode and Cuffley lode and we expect they will require only a minimal amount of additional capital development to access and mine.  

“We are further evaluating the potential to mine the Brunswick lode in light of steadily decreasing mining and processing costs at Costerfield. Two recent deep drill holes have demonstrated the potential for significant depth extension to the Brunswick lode. Infill and extensional drilling around the current Indicated and Inferred Resources at Brunswick is being undertaken now and will continue for the balance of the year to improve our confidence in the size and grade of the lode; the geotechnical characteristics of the lode and its impact on projected mining costs; and the metallurgical characteristics of mineralization contained in the lode.”

Dr. Sander continued, “At Bjorkdal, new drilling has pushed the limits of mineralization in the underground mine some 200 m to the north and up to 100 m to the east and northeast of the previous limits of drilling. We expect this work will translate into a significant increase in underground Mineral Resources and Reserves in the updated Technical Report for Bj?rkdal we expect to release in the fourth quarter of this year. As well, positive drilling results were generated in and around the southeast part of the open pit, extending towards the Nylunds deposit where good infill drilling results were announced previously (see Mandalay press release issued on January 19, 2016).  These results demonstrate the potential to expand open pit Mineral Reserves significantly to the southeast. Finally, our only new target testing drill hole in the first half of 2016 intersected a well-mineralized vein approximately one kilometre to the southeast of the Nylunds deposit in the Morbacken area. This new intercept lies within a five kilometre (“km”) long zone extending from the present open pit southeast past Nylunds and Morbacken all the way to the Ronnberget prospect. This zone is highlighted by anomalously high grades of gold in top-of-bedrock samples.  We intend to sustain the pace of drilling for the rest of the year in order to convert as much new Mineral Reserve as possible and to test further this southeast-trending zone for significant mineralization.

Dr. Sander continued, “At Cerro Bayo, drilling under Laguna Verde continued to extend the Coyita SE vein to depth toward the southeast.  We now know that the vein is mineralized virtually all the way to the Ca?ad?n Verde fault, which is the major graben-bounding structure along the southeast margin of the Laguna Verde sector.  Also, during the first half of the year, the Company began infill drilling the Branca vein, a ladder-type structure that extends from its intersection with Coyita vein northwest toward the Kasia vein. New intercepts on Branca reported here have confirmed the continuity and tenor of the high-grade intercepts reported in our previous exploration update for the fourth quarter of 2015 (see Mandalay press release of January 19, 2016). Branca lies close to Coyita SE, and the capital development currently underway to develop Coyita SE will also serve to access Branca at low incremental cost. Scout drilling under Laguna Verde Norte and in the Brillantes sector have generated several gold and silver bearing intercepts which we will be following up in the second half of the year.”

Dr. Sander concluded, “Finally, at Challacollo we have completed a geophysical survey using the “self-potential” technique which measures voltages generated by oxidizing sulfides at depth. Anomalies detected in this survey suggest that the major Lolon vein, along which all Mineral Resources currently defined in the district occur, extends significant distances under colluvium and sand dunes to the north and south of the main outcrop area. The survey also detected significant anomalies further north and south of the Lolon vein that are interpreted to represent large volumes of sulfide-bearing material. We plan to drill-test all of these anomalies for the presence of silver, gold, and base metals by the end of the year.”