Vision:

To create exceptional shareholder value through the acquisition of undervalued assets that can rapidly become cash generative, self fund exploration, establish and maintain high operating margins and return cash to shareholders within a planned period of time. Mandalay is committed to operating safely and in an environmentally responsible manner, while developing a high level of community and employee engagement. 

Strategy:

Entry Strategy:

• Acquire high-quality assets at a low cost relative to ultimate value
• Apply management’s extensive operational and exploration expertise to turn around, grow and/or develop the assets
• Focus on cash returns to shareholders and prudent use of leverage

Operationally, Mandalay is focused on:

• High-margin projects where we can achieve rapid production ramp-ups from restarts, turn around situations or late-stage development
• Early cash flow to fund exploration, growth and operational improvements
• Building critical mass through acquisition

Capital strategy: Reduce dilution and return cash to shareholders

• NCIB: Repurchasing up to 5% of the Company from operational cash flow over 1 year
• Substantial Issuer Bid: Exchange offer to reduce dilution from warrants

We are focused on operating in countries that have a long-standing tradition of mining, with clear legal frameworks for tenure and tax. Today, these jurisdictions include Australia and Chile.

AUSTRALIA

THE COSTERFIELD GOLD-ANTIMONY MINE

Summary

Mandalay, through the subsidiary AGD, owns 100% and operates the Costerfield gold-antimony mine in Victoria, Australia, having purchased it on December 1, 2009, from Western Coal. The Company restarted capital development and mining immediately, ramping through year-end 2010 to the planned production rate of >5000 tonnes per month (“t/m”). In 2010 and again in 2011, the Company generated new reserves deeper on the Augusta E and W lodes currently being mined to approximately replace depleted reserves. In 2011, the Cuffley lode was discovered and by the end of the year, an initial high-grade inferred resource was established (click here for Costerfield Technical Report) that forms the basis for a Preliminary Economic Analysis slated for completion in mid-2013.

Costerfield offers current gold and antimony production, the potential for significant near-term production expansion and mine life extension in the Cuffley lode, and exposure to discovery potential for new veins in the district.

Location, Property, and Permitting

The Costerfield Project is centred on the small settlement of Costerfield in Central Victoria, Australia, located approximately 10 kilometres (“km”) northeast of Heathcote, 50 km east of the city of Bendigo and 100 km north of Melbourne, Victoria.

The Costerfield tenements currently total 7,540.78 hectares (“Ha”), of which 1,219.30 Ha are held as the main mining license and the balance in two exploration licenses. The mine is fully permitted and operates year round.

History

The Costerfield veins were discovered in the 1860s and have been mined for both gold and antimony, most extensively during two periods: 1860 – 1883 and 1904 – 1925. Ongoing exploration and intermittent small scale production continued during the period 1934 – 1980.

Post – 1983, the Costerfield deposits underwent more extensive exploration, resulting in the construction of a processing plant in 1995 to re-treat tailings and the oxide portion of the Brunswick deposit which was mined by open pit methods. In the period 1975 – 1981 the Augusta deposit was discovered with continued exploration and resource definition drilling resulting in the completion of a successful feasibility study and development of the Augusta underground mine in 2006.

For more information please click here

CHILE

CERRO BAYO SILVER-GOLD MINE

Summary

Compañia Minera Cerro Bayo (“Cerro Bayo” or “CMCB”) owns and operates multiple underground silver (“Ag”)-gold (“Au”) mines in the Cerro Bayo district, Region XI, Chile. The mines feed a single conventional flotation plant. Ag-Au concentrate from the plant is sold to smelters in Asia and North America. Cerro Bayo offers Mandalay shareholders exposure to current, low-cost Ag and Au production with the possibility of a near-term 30% expansion (presently under study) and exciting exploration potential in one of the best mining jurisdictions in the world.

Mandalay Resources Corp. purchased 100% of CMCB, which was on care and maintenance at the time, in August, 2010. CMCB restarted mining in September, 2010, recommenced processing in January, 2011, and shipped its first gold-silver concentrate in February, 2011. The mine reopened with about three years of mine life but, by the end of 2011, exploration had doubled reserves to support a six-year mine life. Ramp-up to the currently planned 1,200 tonnes per day (“tpd”) ore processing rate was completed by the fourth quarter of 2012. The Company produced 2,911,595 ounces of silver and 17,089 ounces of gold in 2012. In 2013, the Company will expand throughput to reach approximately 1,400 tpd by the first quarter of 2014.

Location, Property, and Permitting

The Cerro Bayo district is located in southern Chile, just inside the border with Argentina approximately 130 kilometres (“km”) south of Coyhaique, the capital of Region XI. This district is part of an emerging precious metals province containing the Cerro Bayo and El Toqui mines in Chile and several mines and exploration projects extending eastward into Argentina.

The CMBC property, comprising 23,106 hectares (“ha”) of exploiation concessions and 4,700 ha of exploration concessions, lies east of the Andes mountain range at elevations ranging from 300 to 1,000 metres (“m”). The mine and plant, located 12 km west of the town of Chile Chico, are serviced by an all-weather road and operate year-round. The operations are fully permitted and CMCB either owns or has access agreements for surface rights where it operates.

(Location Map of the Cerro Bayo Project click here)

History

Freeport Chilean Exploration Company (‘‘FCEC’’) identified epithermal gold and silver mineralization in the Cerro Bayo district in 1984 and explored the district until 1989, when it sold all its Chilean interests to Coeur d’Alene Mines Corporation (“Coeur”).

Coeur continued exploration, commissioned the plant in 1995, and mined from 1995 to 2000 and again from 2002 to 2008; initially from open pit operations in the Laguna Verde area and then from underground operations in the Cerro Bayo area (see figure below) Coeur continued exploration after the 2008 shutdown, discovering the large Delia vein in the Laguna Verde area late that year. Delia, together with the nearby, partially developed Dagny and Fabiola veins, contained most of the reserves upon which the 2010 Mandalay transaction and restart plan was based.

LA QUEBRADA COPPER-SILVER PROPERTY

(La Quebrada Project Map - click to enlarge)

Location

The 100% owned La Quebrada project is located in Region IV of Chile, approximately 415 km north of Santiago and 40 km northeast of the coastal city of La Serena. The approximate centre of the property is located at UTM coordinates 303000 E / 6702500 N (Provisional South American Datum 1956, UTM Zone 19 South).

Permitting

Mandalay has received SEA (Servicio de Evaluación Ambiental) approval for its second phase of core drilling and has an access agreement with the surface rights owner, the Comunidad Agricola Hoya de Caldera de Elqui.

(La Quebrada District Geology - click to enlarge)

Geology and Mineralization

The principal host for copper-silver mantos at La Quebrada is arkosic limestone beds within the upper Cretaceous Arqueros Formation and the overlying basal Cretaceous Quebrada Marquesa Formation. These carbonate units, up to 50 metres thick, occur in restricted, sediment-starved sub-basins of which several have been identified to-date on the property. Most contain disseminated, stratiform bornite-chalcocite-chalcopyrite mineralization. Mantos also occur along permeable andesite flow tops in at least five horizons within the lower Arqueros Formation.

Historical drilling has demonstrated stratiform mineralization over an area of 1.5 by 1 km at the Casa de Piedra target and 1 by 2 km at the Dalmatas target. Mapping also revealed new manto targets at Leoncita. In addition, several other manto occurrences have been identified throughout the La Quebrada property (20,100 hectares) that have yet to be explored. Immediately adjacent to our Casa de Piedra target, Tugal Mining is currently extracting the same Cu-Ag manto (1.13% Cu, 11 g/t Ag) from a 540,000 t/a open pit mine and a few km away, in the Talcuna district, two companies are mining similar material underground from the Quebrada Marquesa Formation.

Exploration History

Over the past 40 years, the property has been explored sporadically by various mining companies including the United Nations – ENAMI joint venture, Placer Dome, Noranda and Teck.

For more information on the Chile operations please click here

Board of Directors

Braam Jonker, Interim Chairman, Director

Mr. Jonker is a Chartered Accountant (South Africa and England and Wales) and holds a Masters degree in South African and International Tax from the Rand Afrikaans University. He has over 17 years of extensive accounting and corporate finance experience, mostly in the mining industry. He has worked as a consultant to the mining sector in Africa, spent time with Mwana Africa Plc, and with the corporate finance departments at Anglo American Corporation and PricewaterhouseCoopers. Mr. Jonker was the Chief Financial Officer of Cambrian Mining Plc. and was formerly the Chief Financial Officer at Western Coal Corp.

Bradford A. Mills, Chief Executive Officer, Director

Mr. Mills currently holds a directorship with Norilsk Nickel, the world's largest nickel producer and is a founder and the managing director of Plinian Capital. He brings over 30 years of experience in the resource industry to Mandalay, formerly holding the position of CEO of Lonmin plc, the world's number three platinum and PGM producer, and prior to that, served as president of the BHP Billiton's copper group.

Sanjay Swarup, Director

Mr. Swarup holds a Masters of Business Administration from Cranfield School of Management (Bedfordshire, UK) and is a Chartered Accountant from India with over 20 years experience in accounting and business consulting, with 10 of those years in the resource industry. Mr. Swarup has worked with a range of businesses that include small and medium enterprises and multinationals such as BP plc and Lonmin plc.

Rob Doyle, Director

Mr. Doyle has over 30 years of experience in all facets of international resource exploration, development and production. Mr. Doyle is a director of Golden Star Resources Ltd. and NXA Inc. He was Chief Executive Officer of Medoro Resources Limited, a public company that consolidates and develops gold in Colombia, from 2008 to 2009 and remains currently on its Board of Directors. From 2005 to 2007, Mr. Doyle was the Executive Vice President of Pacific Stratus Energy, the largest independent oil and gas producer in Colombia. He was also Chief Financial Officer and founding partner of Bolivar Gold Corp. from 2003 to 2006.

Peter R. Jones, P. Eng.

Mr. Jones is a retired mining executive and Professional Engineer with 40 years of experience in senior operational and project positions at coal, gold, base metal and potash mines. He has also consulted in many countries. Previously he was CEO of Hudson Bay Mining and Smelting Co., Limited (HBMS) for Anglo American, President and CEO of HudBay Minerals and Chairman and CEO of Adanac Molybdenum. He is a past Chairman of the Mining Association of Canada and in 2006 was named prairie region, Entrepreneur of the Year, by Ernst and Young. Mr. Jones is an advocate of corporate governance and graduated from the Camborne School of Mines, UK. in 1969 and the Banff School of Advanced Management in 1984.

Tony Griffin

Mr. Griffin is a Partner with West Face Capital Inc., a Toronto based investment manager. Prior to joining West Face, Mr. Griffin was a Managing Director of Amaranth Advisors Canada (ULC). Mr. Griffin holds a Bachelor of Commerce from the University of British Columbia.

For share information please click here.