Mandalay Resources Corporation Closes Non-Brokered Private Placement for
Gross Proceeds of C$3.2 Million

TORONTO, Dec. 14 /CNW/ - Mandalay Resources Corporation ("Mandalay" or the "Company") (TSX: MND, MND.WT) announced today that it has closed its previously announced non-brokered private placement with Sprott Asset Management L.P., for and on behalf of certain funds managed by it, of 10 million shares of the Company priced at C$0.32 per share. Total gross proceeds of the placement are C$3.2 million.

The private placement is the first tranche of the C$13.2 million equity and debt financing that the Company announced on December 3, 2010. Mandalay is also continuing to work towards closing its previously announced C$10 million debt facility with Sprott Lending Resource Partnership and expects to complete that transaction before the end of December 2010.

Brad Mills, CEO of Mandalay Resources commented, "We are pleased to have Sprott as a major investor in Mandalay.  The proceeds from this financing and our pending debt financing will be used to accelerate development at the Cerro Bayo Silver-Gold Mine in Chile and for working capital which will see the Cerro Bayo project through to profitability. In 2011, we expect to produce approximately 2.3 million ounces of silver from 2011 production at Cerro Bayo and take advantage of the ongoing climate of high silver prices."

About Mandalay Resources Corporation:

Mandalay Resources is a Canadian-based natural resource company with producing assets in Australia and exploration projects in Chile. The Company is focused on executing a roll-up strategy, creating critical mass by aggregating advanced or in-production gold, copper, silver and antimony projects in Australia and the Americas to generate near-term cash flow and shareholder value.

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 complete the transactions described herein on the terms outlined, 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. In addition, there can be no assurance that any inferred resources that are discovered as a result of additional drilling will ever be upgraded to proven or probable reserves. 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.

For further information:

Bradford Mills
Chief Executive Officer

Greg DiTomaso
Investor Relations
Contact: 647.260.1566
Email: [email protected]  

Company website: www.mandalayresources.com