Mandalay Resources Producing Ore from Second Vein at Cerro Bayo and Provides
Cerro Bayo Operational Update

TORONTO, Nov. 3 /CNW/ - Mandalay Resources Corporation ("Mandalay" or the "Company") (TSX: MND, MND.WT), is pleased to announce that it has started stockpiling silver-gold ore from the Dagny vein at its Cerro Bayo mine in Chile.  The Dagny vein is being developed from a separate decline to that of the Fabiola vein. The Fabiola vein started producing ore from development drives in mid-September 2010 (see Mandalay press release dated September 16, 2010).  All mining operations at Cerro Bayo are on or ahead of schedule. 

The Company also commenced drilling on the Yasna vein as of November 3, with the goal of adding significantly to the 69,000 tonnes of inferred ore already existing there (see Mandalay's Cerro Bayo NI-43-101 report filed under the Company's profile on www.sedar.com), as well as to demonstrate the feasibility of incremental mining as an adjunct to existing operations on the nearby Fabiola vein.

A third vein (Delia NW) is currently being permitted for production with initial development scheduled for the second quarter of 2011 and production by the end of 2011.

The Cerro Bayo mining and concentrator complex, acquired on care and maintenance from Coeur d'Alene Mines in August 2010 (see press release dated August 10, 2010) is undergoing restart by Mandalay with plans to ramp up to an annual design production rate of 24,000 ounces of gold and 3 million ounces of silver by the end of 2011.

By the end of October 2010, the Company had stockpiled a total of 3,300 tonnes of development ore averaging 250 g/t silver and 0.8 g/t gold.  Both tonnes and grade stockpiled to date are well ahead of the mine plan design.

The concentrator is currently scheduled to commence operation in first quarter 2011, when sufficient development is expected to have occurred on the Dagny and Fabiola veins to sustain planned production.  The concentrator is expected to begin processing at a rate of 400 tonnes of ore per day, rising to 700 tonnes per day by the end of 2011, and further to 1,000 tonnes per day in 2012 as the Delia mine enters full production.

Brad Mills, Chief Executive Officer of Mandalay, commented: "Our successful mine ramp up at Cerro Bayo means that we are on track to achieve our 2011 corporate production goal of 60,000 gold equivalent ounces and 1,500 tonnes of antimony."

The Company will report further updates on the Costerfield "Augusta Deeps" exploration program in the coming month.

Qualified Person:

Ronald Luethe, General Manager of Mandalay Chile Ltda., is an Idaho registered professional geologist and a member of the American Institute of Professional Geologists and is a Qualified Person as defined by NI 43-101. He has reviewed and approved the technical and scientific information pertaining to the Cerro Bayo mine contained in this release.

About Mandalay Resources Corporation

Mandalay Resources is a Canadian-based natural resource company with producing and exploration projects in Australia and 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 successfully develop its Cerro Bayo mine in accordance with management's current plans, 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