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Mandalay Acquires 100% Interest in Challacollo Silver-Gold Project from Silver Standard

Mandalay Resources Corporation is pleased to announce that it has completed the purchase of Silver Standard Resources Inc.'s 100% interest in the Challacollo silver-gold project in Region I, Northern Chile.

Terms of the purchase were as disclosed in the press release announcing the transaction on December 20, 2013 and as below. The value of the closing consideration was approximately US$16.7 million using the Canadian/US Dollar exchange rate and the Mandalay share price on the day of closing.

Mandalay has filed an Independent Technical Report prepared by Roscoe Postle Associates Inc. ("RPA") substantiating the Mineral Resource estimate announced in the December 20, 2013 press release. The resource contains 8.0 million ounces of silver in the Indicated Resource category and 24.3 million ounces of silver in the Inferred Resource category.

Brad Mills, CEO of Mandalay commented, "The acquisition of the Challacollo silver-gold project has been completed as contemplated by the Share Purchase Agreement announced on December 20, 2013."

Mr. Mills continued, "With the close of the transaction and the publishing of the Mineral Resource Estimate, we now have a solid foundation on which to commence our feasibility study. The study work is expected to consist of 8,000 to 10,000 metres of diamond core drilling and associated assays which are designed to infill and upgrade the current RPA resource estimate. 10% of the drill metres will also be used to test resource extensions. Mine design and costing will be completed once the resource estimate has been updated. Metallurgical testing will be conducted on both drill core and underground samples from the developed portion of the deposit. The metallurgical information will be used to complete detailed plant design and costing. Engineering studies will be completed on the required infrastructure requirements such as access roads, power, and water. Finally, environmental and community baseline studies necessary for mine permitting will be commenced.

The goal of the program is to complete and publish a full feasibility study and file for all permits required for construction and operations within 12 months. We expect the cost of the program to be approximately $5-7 million dollars, funded from current corporate cash resources.

We are very pleased with the acquisition of the Project as it meets our acquisition criteria of low cost, near-term production with significant exploration potential."

Source: http://www.mandalayresources.com/

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