Mandalay Resources January 2017 Investor Presentation

BUILDING VALUEACROSS THE CYCLE

MANDALAY RESOURCES

JAN 2017TSX // MND

This presentation contains "forward-looking statements" within the meaning of applicable securities laws, including statements relating to life ofmine production plans, exploration plans and the growth and strategy of Mandalay. Actual results and developments may differ materially fromthose contemplated by these statements depending on, among other things: exploration results or production results not meeting management’sexpectations; capital, production and operating cost results not meeting current plans; and changes in commodity prices and general market andeconomic conditions. The factors identified above are not intended to represent a complete list of the factors that could affect Mandalay. Adescription of additional risks that could result in actual results and developments differing from those contemplated by forward lookingstatements in this news release can be found under the heading “Risk Factors” in Mandalay’s annual information form dated March 30, 2016 andin its final prospectus dated July 18, 2016, copies of which are available under Mandalay's profile at www.sedar.com. Although Mandalay hasattempted 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 beno assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from thoseanticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.

Quality Control and AssuranceQuality 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 ofOperational Geology for Mandalay and a “Qualified Person” as defined under National Instrument 43-101. Mr. Gregory regularly visits Costerfieldand 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 MandalayResources, and an Oregon registered Professional Geologist. A “Qualified Person” as defined by NI 43-101, he has reviewed and approved thetechnical 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 andhas supervised the preparation of this presentation.

All currency references in US$ unless otherwise indicated

Forward-looking Statements

2

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

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

Profitable and Dividend-Paying: (3.8% yield)*

*Trailing 12 months dividends divided by current market capitalization (Jan. 12, 2017)

3

Designed for Value: How We are Different

Acquire only when we see possibility of 3-5X value uplift in 3-5 years

Target cash cost of production: 50% of ‘reversion to mean’ metal price

100% ownership of all operations; 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

Lightly levered with low-interest, gold-convertible bonds

Stingy with equity

Disciplined management processes operated with integrity

Compensation systems based on value-add

4

1.7

32

79.9 67.7 64.4 68

-0.8

30.661.2 75.9

52.473.4

20.6

92.2

171.8 166.9184.6

194.5

-50

0

50

100

150

200

250

2010 2011 2012 2013 2014 2015

2009• Costerfield, Australia• Gold & Antimony• Costerfield, Australia• Gold & Antimony

2010

• Cerro Bayo, Chile• Silver & Gold• Cerro Bayo, Chile• Silver & Gold

2014• Challacollo, Chile• Silver & Gold• Challacollo, Chile• Silver & Gold

2014

• Björkdal, Sweden• Gold• Björkdal, Sweden• Gold

Results: Strong Performance Across the Price Cycle

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.

TIMELINE

2016 Quarterly Financial Measures

Revenue,EBITDA(1) & Cash from Operations

RevenueEBITDACash from Operations

Record Revenue

2nd best EBITDA & Cash from Operations

• No acquisition • Optimize operations• Pay down debt• Exchange warrants• Begin dividends

2011‐2013

5

50.454.2

48.5

17.322.1

13.87.3

22.315.5

0

10

20

30

40

50

60

Q1 2016 Q2 2016 Q3 2016

US$

MM

US$

MM

1. Assumes full-year 2016 prices: Au $1,258/oz, Ag $17.00/oz, Sb $6,505/t 6

Based on Matched Production and Reserve Growth

6

With Continuing Low Cash and all-in Production Costs

15,854 63,351

107,941 126,908

154,810 166,679 254,000

520,000 633,000

772,000

1,123,000 1,070,000

0

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1,200,000

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2010 2011 2012 2013 2014 2015 2016 2017E

Oz

Au E

q. Y

ear-

End

Res

erve

s

Oz

Au E

q. A

nnua

l Pr

oduc

tion

145,497 155,000 –175,000(1)

P&L Margin

EBITDA Margin

1 mine restart1 mine restart

1 mine transformation1 mine restart

1 mine transformation2 mines producing

1 mine transformation

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

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2010 2011 2012 2013 2014 2015 2016

$/O

z Au

Eq.

(Cos

t) or

Au

(Pric

e)

Au E

q. O

z/Q

tr

Production Cash Cost (Oz Au Eq) AISC (oz Au Eq) Average Au Price ($US Oz)

Reducing volatility with growing number of operations

0

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2010 2011 2012 2013 2014 2015

US$

/oz

Au

Eq. P

&P

Add

ed

Mandalay cost of acquiring and discovering reserves

Cumulative Cost per oz Au Eq. Acquired or DiscoveredCost Per oz Au Eq. Discovered in yrCost Per oz Au Eq. Acquired in yr

And Adding Reserves Cost-effectively

1. 2016 metal price assumptions: $1,202/oz Au, $16.87/oz Ag and $6,820/t Sb2. Source: BMO

Exploration adds at cumulative average $50/oz Au Eq.

Acquisition + Exploration adds at cumulative average $78/oz Au Eq. (for developed & producing reserves)

Cerro Bayo

Björkdal

Median for all Au sector acquisitions2012 – 2016 = $254/oz Au Eq.(2)

7

50%100%150%200%250%300%350%

Mandalay Cumulative Returns11.5% Annual Compounded Rate of ReturnGoldSilver

(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, Kirkland, Klondex, Newmarket, Perseus, Primero, Richmont. (3) Gold Seniors: Agnico Eagle, AngloGold, Barrick, Goldcorp, Gold Fields, Kinross, Newcrest, Newmont, Polyus, Randgold. (4) End date as at January 6, 2017.

Creating Superior 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

Dividends Paid (USD)**

6% of revenues (dividend contribution)

11.5% Cumulative Total Return (% Value Change)*

*Q3 2010 to Q4 2016, includes all dividends paid. Source: MetalPrices.com for metal spot prices Index: September 30, 2009 = 100. Mandalay share price: $0.80.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

0.0

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

Volu

me

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ons)

Inve

stm

ent V

alue

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: $60,865• Peer Index: $10,957• Gold Seniors: $6,899

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

• Mandalay: $60,865• Peer Index: $10,957• Gold Seniors: $6,899

Record Dividends

Trading Volume, Ownership and Coverage

Major Shareholders(1)

Holders Shares (Million) Shares (Percentage)

GMT Capital 65.0

Sentry Investments 43.5

Ruffer LLP 42.0

Plinian + Management + Directors 31.2

Fidelity Investment Advisors (UK) 16.3

Large Holders (Top-5) 198.0

Other Holders 253.2

TOTAL 451.2

Analyst Coverage

Firm Analyst

BMO Brian Quast

Desjardins Mike Parkin

Haywood Ben Asuncion

Raymond James Chris Thompson

Scotia Craig Johnston

Volume

30-day Average Daily Volume 1,608,354

100-day Average Daily Volume 1,217,989

14.4%

9.6% 9.3%6.9%

3.6%

55.9%

9

Average Daily Volume across all trading platforms (as of Oct. 31, 2016)1. Known ownership positions are estimates - as at January 16, 2017 - Ownerships and percentages rounded to one decimal place.

Strong Balance Sheet

101. Exercise Price: C$0.83 – C$0.91 expiry dates ranging from Mar 9, 2017 – Mar 23, 20212. Market Capitalization converted to US$ using exchange rate of 1 CAD = 0.76 USD (Jan. 12, 2017)3. Cash and Cash Equivalents and Interest-Bearing Debt as at end of Q3-2016 (Sept 30, 2016)

As at Jan. 12, 2017 Millions(Except Share Price Info)

Share price (Jan. 12, 2017 - close) (C$) $0.90/shr

Shares Outstanding 451.2

Stock Options(1) 19.2

Fully Diluted Shares Outstanding 470.4

Market Capitalization (C$) $406.1

Cash and Cash Equivalents (US$)(3) $74.6

Total Interest-Bearing Debt (US$)(3) $59.0

Total Enterprise Value (US$)(2,3) $293.0

Net Cash (US$) $15.6

Costerfield Gold-Antimony Mine: Turnaround CompleteLand package 1,293 hectares

Ownership 100%

Number of Employees(1) 172 direct, 4 contractors: 176 total

Current throughput (Q3-2016) 391 tpd

Plant recoveries (Q3-2016) Au: 90.13%, Sb: 95.69%

1. As at year-end 2015, filed in Company’s Annual Information Form11

12

Costerfield: Continuous Improvement

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Oz Au Eq. Cost/ Au Eq. Oz

Costerfield Operational Improvements:Record High Rate Record Low Cost

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 6 years

Operations continue setting records and new targets being tested

Costerfield Operational Improvements:Record High Rate Record Low Cost

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 6 years

Operations continue setting records and new targets being tested

12

Start-up

Transformation

Cont. Impr.

13

Expansion of existing lodes

Entirely “new” lodes

N-Lode North

Brunswick Lode

Björkdal Gold Mine: Emerging from Intensive Care

Land package 12,949 hectares

Ownership 100%


Current throughput (Q3-2016) 3,581 tpd

Plant recoveries (Q3-2016) Au: 88.1%


15

Björkdal Operating Performance and Improvements

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Au oz Cost/ oz Au

Björkdal 2015 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

2016 Planned Improvements:

Increasing grade of mill feed through more selective underground and open pit mining at an increasing rate (making up for discarding waste) – DONE

Pilot optical ore sorting – DONE

Pilot coarse and ultra-fine gold float – DONE

Björkdal 2015 Operational Improvements:


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

2016 Planned Improvements:

Increasing grade of mill feed through more selective underground and open pit mining at an increasing rate (making up for discarding waste) – DONE

Pilot optical ore sorting – DONE

Pilot coarse and ultra-fine gold float – DONE

15

Transitioning to Proper Longitudinal Grade Control

16

Sampling every round results in discarding 30-40% of materialSampling every round results in discarding 30-40% of material

Ore sorting: Encouraging visual results backed up by preliminary processing results

17

“Ore” – Abundant vein fragments, presumed increased grade

“Waste” – No vein fragments, presumed very low-grade

Bulk TestStart

GradeEnd

GradeTimes

Upgraded Waste

RejectionGold

Retained g/t Au g/t Au (%) (%)

Underground Ore

1.93 2.97 1.54 43.0 87.0

Stockpile Ore

0.80 1.19 1.48 39.0 90.0

Result includes fines (-20mm) that are too fine to sort

Björkdal Processing Improvements

18

Completed: Sampling survey on milling and gravity gold circuits to identify

improvement opportunities

Laboratory flotation recovery study on effect of fineness of grind, % solids, and residence time – key for decision-making on possible future flotation circuit expansion

Pilot on-site testing of coarse and ultra fine gold flotation

Flotation circuit and ancillary equipment expansion study to determine OPEX and CAPEX for a planned flotation circuit expansion. Goal: improve flotation recovery and concentrate grade

2016 Planned Improvements: Milling/Flotation material flow stability survey to identify areas

where automation can be implemented to improve recovery

Introduction of high chrome grinding media for increased wear resistance, grinding media cost saving and improved pulp chemistry for improved flotation recovery

19

Björkdal 2016 Reserves and Resources Increase

Björkdal Reserves Ore (t) Au Grade (g/t) Au (cont. oz)

Proven - - -Probable 10,778,000 1.69 586,000

Total 10,778,000 1.69 586,000

Björkdal Resources Ore (t) Au Grade (g/t) Au (cont. oz)

Measured - - -Indicated 11,829,000 2.39 911,000Total M&I 11,829,000 2.39 911,000Inferred 3,564,000 1.71 196,000

Björkdal Resources Ore (t) Au Grade (g/t) Au (cont. oz)

Measured - - -Indicated 7,524,000 2.47 598,000Total M&I 7,524,000 2.47 598,000Inferred 1,552,000 1.86 93,000

Björkdal Reserves Ore (t) Au Grade (g/t) Au (cont. oz)

Proven - - -Probable 7,012,000 1.85 418,000

Total 7,012,000 1.85 418,000

As at December 31, 2015 As at September 30, 2016

Source: Björkdal – Roscoe Postle Associates, Effective September 30, 2016, please refer to Mandalay Resources’ press release dated December 15, 2016

Cerro Bayo Silver-Gold MineLand package 23,106 hectares

Ownership 100%


Current throughput (Q3-2016) 920 tpd

Plant recoveries (Q3-2016) Ag: 82.32%, Au: 82.93%


BRANCAKASIA

RAMONA ETC.

Emerging Vein

Cerro Bayo Operating Performance and Improvements

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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 5 years at 1,400 tpd while mining continuously for 4 years

Ongoing improvements to increase pace of development mining

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 5 years at 1,400 tpd while mining continuously for 4 years

Ongoing improvements to increase pace of development mining

21


Challacollo Silver-Gold Project 2016

Land package 20,378 hectares

Ownership 100%

Location 130 km SE of Iquique, Chile

Mineralization Epithermal, oxidized Ag-Au

Number of Employees(1) 6 direct: 6 total

Elevation Approx. 1,500 ASL


Water exploration and water rights transfer Exploration and optimization

Large self-potential anomalies north and south of Lolon vein

Lolon vein

Invest with us: How we will deploy your capital1. Acquire new assets counter-cyclically – only at deep discount to value• Deliver base case returns at least 2x the investment• Upside case 3-5x over 3-5 years based on specific testable hypotheses• 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

23

BUILDING VALUEACROSS THE CYCLE

MANDALAY RESOURCES

For more information, please contact:

Greg DiTomasoDirector, Investor RelationsTel: 647.260.1566Email: [email protected] Website: www.mandalayresources.comTwitter: @MandalayAuAg

For more information, please contact:

Greg DiTomasoDirector, Investor RelationsTel: 647.260.1566Email: [email protected] Website: www.mandalayresources.comTwitter: @MandalayAuAg

25

APPENDICES

Management and Board of DirectorsSenior ManagementSenior Management

Board of DirectorsBoard of Directors

Sanjay Swarup, CFOFormer Lonmin plc, over 20 years of industry experience

Belinda Labatte, Head of Stakeholder Engagement & Corporate AffairsOver 15 years of industry experience

Braam Jonker, Independent Director

Peter R. Jones,Independent Director

Robert Doyle,Independent Director

Dominic Duffy, COOMining Engineer with extensive technical and operational management experience

Mark Sander, President and CEO29 years of experience in exploration, strategy and operating improvements

26

Mark Sander,Director

Brad Mills, Executive Chairman

Amy Freedman,Independent Director

Numbers may differ slightly from source documents due to rounding

Mandalay ReservesCerro Bayo Reserves(1) Ore (t) Ag Grade (g/t) Ag (cont. oz) Au Grade (g/t) Au (cont. oz)

Proven Reserves 133,000 195 835,000 1.98 9,000Probable Reserves 1,903,000 230 14,041,000 2.18 133,000P&P Reserves 2,036,000 227 14,876,000 2.16 142,000

Costerfield Reserves (2) Ore (t) Sb Grade (%) Sb (cont. t) Au Grade (g/t) Au (cont. oz)

Proven Reserves 125,000 4.4 5,500 12.0 48,000Probable Reserves 366,000 3.7 13,400 8.2 97,000P&P Reserves 491,000 3.9 18,900 9.2 145,000

1 Source: Cerro Bayo - Roscoe Postle Associates, Effective December 31, 2015, documented in an independent NI 43-101 Technical Report filed March 30, 20162 Source: Costerfield - SRK Consulting (Australia), Effective December 31, 2015, documented in an independent NI 43-101 Technical Report to filed March 30, 20163 Source: Björkdal – Roscoe Postle Associates, Effective September 30, 2016, please refer to Mandalay Resources’ press release dated Dec. 15, 2016

TOTAL RESERVES31-December-2015 Ag (cont. oz) Au (cont. oz) Sb (cont. t)

Mandalay Proven Reserves 835,000 57,000 5.5Mandalay Probable Reserves 14,041,000 816,000 13.4Total Mandalay P&P Reserves 14,876,000 873,000 18.9

Björkdal Reserves (3) Ore (t) Au Grade (g/t) Au (cont. oz)

Proven - - -Probable 10,778,000 1.69 586,000

Total 10,778,000 1.69 586,000

27

Mandalay ResourcesCerro Bayo Resources (1) Resource (t) Ag Grade (g/t) Ag (cont. oz) Au Grade (g/t) Au (cont. oz)Measured Resources 132,000 250 1,065,000 2.46 10,000Indicated Resources 1,699,000 315 17,211,000 3.16 173,000M&I Resources 1,832,000 310 18,276,000 3.11 183,000Inferred Resources 511,000 181 2,984,000 2.32 38,000

Costerfield Resources (2) Resource (t) Sb Grade (%) Sb (cont. t) Au Grade (g/t) Au (cont. oz)Measured Resources 247,000 4.6 11,000 12.1 96,000Indicated Resources 798,000 3.4 27,000 7.6 194,000M&I Resources 1,045,000 3.7 38,500 8.6 290,000Inferred Resources 491,000 2.0 9,700 4.3 68,000

TOTAL RESOURCES Ag (cont. oz) Au (cont. oz) Sb (cont. t)Measured Resources 1,065,000 106,000 11,000Indicated Resources 47,411,000 1,278,000 27,000Total M&I Resources 48,476,000 1,384,000 38,000Total Inferred Resources 9,884,000 318,000 9,700

1 Source: Cerro Bayo - Roscoe Postle Associates, Effective December 31, 2015, documented in an independent NI 43-101 Technical Report filed March 30, 20162 Source: Costerfield - SRK Consulting (Australia), Effective December 31, 2015, documented in an independent NI 43-101 Technical Report Filed March 30, 2016

Challacollo Resources (3) Resource (t) Au Grade (g/t) Ag Grade (g/t) Au (cont. oz) Ag (cont. oz)Measured Resources - - - - -Indicated Resources 4,700,000 0.32 200 48,000 30,200,000 M&I Resources 4,700,000 0.32 200 48,000 30,200,000 Inferred Resources 1,600,000 0.31 134 16,000 6,900,000

3 Source: Challacollo – Mining Plus, Effective December 31, 2015, documented in an independent NI 43-101 Technical Report filed Mar. 31, 20154 Source: Björkdal – Roscoe Postle Associates, Effective September 30, 2016, please refer to Mandalay Resources’ press release dated December 15, 2016

Björkdal Resources (4) Resource (t) Au Grade (g/t) Au (cont. oz)Measured Resources - - - Indicated Resources 11,829,000 2.39 911,000M&I Resources 11,829,000 2.39 911,000Inferred Resources 3,564,000 1.71 196,000

28