Mandalay Resources Corporation Announces Financial Results for Q1, 2010

TORONTO, May 31 /CNW/ - Mandalay Resources Corporation ("Mandalay" or the "Company") (TSX-V: MND) announced today its financial results for the three months ended March 31, 2010. The Company's consolidated financial statements for the three months ended March 31, 2010, together with its Management's Discussion and Analysis of these results, are available for review on the Company's website and at www.sedar.com.

The Company posted a net loss for the three months ended March 31, 2010 of $2.1 million ($0.02 per share) on revenues of $3.1 million derived from the sale of 1,361 ounces of gold and 195 tonnes of antimony. This loss was primarily due to costs associated with the restart and ramp-up of the Costerfield gold-antimony mine, which the Company purchased in December 2009, and business development expenses associated with the Company's proposed acquisition of Cerro Bayo. Total assets at March 31, 2010 were $43.0 million, up from $7.0 million as at March 31, 2009, and cash resources at March 31, 2010 stood at $3.4 million. The Company's total indebtedness as at March 31, 2010 was $2.9 million. Shares outstanding at the time of filing are 99,392,850.

Production at Costerfield is currently reaching design specifications and should reach its full production design by the end of June. Once in full production, Costerfield is expected to produce approximately 5,000 tonnes of ore per month containing 1,000 - 1,500 ounces of saleable gold and 150 - 200 tonnes of saleable antimony per month (annualized production of approximately 18,000 ounces of gold and 2,000 tonnes of antimony once the narrow mechanized drill fleet is in operation from Q4 forward). Please refer to Mandalay's press release dated April 24, 2010 for first quarter operational results from Costerfield.

Brad Mills, CEO of Mandalay said, "These first quarter results represent the first full quarter of Mandalay ownership of the Costerfield mine. The Costerfield mine is on track to reach full production and profitability in the coming months. We anticipate this increased rate of production will provide positive cash flow and will allow Costerfield to become a self-funding, cash-generative asset, which puts us in an excellent position to grow the Company."

About Mandalay:

Mandalay is a Canadian-based natural resource company with assets in production. The Company is focused on executing a roll-up strategy which involves aggregation of gold, copper, silver and antimony projects, creating critical mass through the acquisition of near-term or in-production assets in Australia and the Americas.

Forward-looking statements:

This news release contains "forward-looking statements" within the meaning of applicable securities laws. 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, Mandalay's ability to secure additional financing, 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. 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.

THE TSX VENTURE EXCHANGE HAS NOT YET REVIEWED AND DOES NOT TAKE RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THE CONTENT OF THIS NEWS RELEASE.

For further information: Bradford Mills, Chief Executive Officer, Greg DiTomaso, Investor Relations, Contact: [phone], Email: [email protected], Company Website: www.mandalayresources.com