Highlights of the Argyle Deposit Include:

• Probable Mineral Reserve of 535,592 tonnes at an average diluted grade of 2.06 grams per tonne (“g/t”) gold containing 35,477 ounces, using a base case gold price of $1,900 (US$1,425);
• Gold production of 30,865 ounces over a 22-month Life of Mine (“LOM”) based on an 87% overall mill recovery;
• Low upfront capital requirements of $2.98M and LOM sustaining capital $2.69M;
• Operating cash costs per ounce sold and all-in sustaining cash costs (“AISC”) per ounce sold of $1,219 (US$915) and $1,306 (US$980), respectively;
• Pre-tax net present value at a 5% discount rate (“NPV 5%”) of $13.1M and an Internal Rate of Return (“IRR”) of 262%, and an after-tax NPV 5% of $11.4M with an IRR of 245%, all based on a $1,900 gold price;
• At a gold price of $2,600 per ounce (US$1,950), Argyle produces a pre-tax NPV 5% of $32.7M and an IRR of 1,336% and an after-tax NPV 5% of $24.5M and an IRR of 1,273%;
• Indicated Mineral Resource of 488,000 tonnes at an average grade of 3.14 g/t gold containing 49,300 ounces (open-pit constrained), using a base case gold price of $1,900 (US$1,425);

“Building on continuous mining at Point Rousse for over ten years, we are pleased to again extend the mine life of the Point Rousse Project with the declaration of Mineral Reserves at Argyle. The discovery of the Argyle Deposit and now moving forward with its development into a producing mine validates our strategy of continued exploration at the Point Rousse Project to leverage our existing mill and tailings infrastructure and dedicated staff, contractors and stakeholders. Argyle generates after-tax cumulative free cash flow of over $12.5 million at a Canadian dollar gold price of $1,900, however at current spot gold prices Argyle could generate over $26 million in after-tax free cash flow over the next 22 months. With the recently announced drill discovery at Stog’er Tight on July 7, 2020 and $5.51M strategic financing, the Company is in an excellent position to execute on its growth strategy and provide strong potential for increased shareholder value,” commented Kevin Bullock, president and chief executive officer, Anaconda Mining.

Argyle Mineral Reserve

Total Probable Mineral Reserve at Argyle is 535,592 tonnes at an average diluted gold grade of 2.06 g/t and contains 35,477 gold ounces at a strip ratio of 8.1 to 1 (Table 1). “Open Pit” Indicated Category Mineral Resources reported below are inclusive of Mineral Reserves.

The Mineral Reserve was derived from an ultimate pit shell design based on parameters from the pit shell used to constrain the Mineral Resource. The ultimate pit shell design was created using Surpac 6.8 mining software and running a reserve report between this shell and the most recently surveyed topographic surface. Probable Mineral Reserves were estimated at a cut-off grade of 0.56 g/t gold and gold price of CAD$1,900/oz (US$1,425/oz) and are based only on Indicated Mineral Resource blocks. Proven Reserves were not defined, as the block model used for reserve reporting did not contain Measured Mineral Resource blocks.

The cut-off grade of 0.56 g/t gold was derived from Anaconda’s mining, processing, and general administration costs and process recovery at Point Rousse. This cut-off grade is the minimum ore grade required to process the ore economically. Table 3 below shows some of the key assumptions and costs used in the ultimate pit optimization process and definition of Mineral Reserves. The costs and the selling price estimates are equal to the budgeted costs and revenues for the current (2020) fiscal year, which are in line with actual costs and revenues achieved year to date.

Project Economics and Production Decision

Total gold ounces mined over the 22-month life of mine is expected to be 35,477 ounces at an average grade of 2.06 g/t gold from 535,592 tonnes of ore mined (see Table 2). It is expected that Argyle ore will be mined using conventional open pit mining methods with waste rock being stored locally at site and ore being transported by truck to the Pine Cove Mill. Total mined waste tonnes are 4,346,119 tonnes at an average strip ratio of 8.1 waste tonnes to ore tonnes. Inferred Mineral Resource within and adjacent to the current pit design will be assessed for conversion to Indicated Mineral Resource as mining progresses.

It is expected that Argyle ore will be batch-processed at approximately 1,200 tonnes per day with additional material from Pine Cove stockpiles supplementing the mill capacity of 1,300 tonnes per day. This will be accomplished with stockpile management techniques and circuit inventory methods in the mill to account for different mill feeds.

Argyle has robust economics with a pre-tax discounted NPV 5% of $13.05M with an IRR of 262%, and an after-tax NPV 5% of $11.4M with an IRR of 245%. Total initial capital requirements of $2.98M are required, mainly for pre-stripping of waste and site preparation.

Production from Argyle is slated to commence in August 2020. To date, the Argyle Deposit has been released from the Environmental Assessment Process, has received the required Mining and Surface leases, and is currently awaiting the final review of the Development, Rehabilitation and Closure Plan. These permits, in addition to an amendment to the existing Certificate of Approval for the Point Rousse Project, are expected in mid-August and development will commence soon after, as the Company transitions from mining at Pine Cove to Argyle during the third quarter of 2020.

Gold Price Sensitivity

An analysis of the Argyle economics was completed at a variety of gold selling prices, and on the base case CAD$1,900 optimized pit and Probable Reserves as outlined in Table 3. The analysis demonstrates robust economics for Argyle at CAD$1,900, with strong leverage to rising gold prices which have exceeded CAD$2,600 per ounce at times. At a gold price of CAD$2,600 per ounce (US$1,950), which approximates current spot prices, Argyle produces a pre-tax NPV 5% of $32.7M and an IRR of 1,336% and an after-tax NPV 5% of $24.5M and an IRR of 1,273%.

Argyle Mineral Resource

The total Open Pit Indicated Mineral Resource of 488,000 tonnes at an average grade of 3.14 g/t gold contains 49,300 gold ounces and the total Open Pit Inferred Mineral Resource of 9,000 tonnes at an average grade of 3.80 g/t gold contains 1,100 gold ounces at the 0.5 g/t gold cut-off (Table 4).

The Argyle Mineral Resource update was carried out by Mercator Geological Services Limited (“Mercator”) of Dartmouth, Nova Scotia. Mercator also prepared the maiden Mineral Resource Estimate for the Argyle Deposit in 2017. The Mineral Resource is defined at a 0.50 g/t gold cut-off and is based on 1 metre assay composites capped at 20 g/t gold (Table 4). The Mineral Resource is undiluted and reflects partial percentage block modelling using Geovia-Surpac Ver. 2020 software. The Mineral Resource is constrained by a base case pit shell defined using a gold price of CAD$1,900, $4.00/tonne mining cost and $29.00/tonne cost for combined processing and G&A. Geovia Whittle Ver. 4.7.3 software was used by Dassault Systemes Canada Inc. for pit optimization purposes. Mining, G&A, and processing costs plus gold price assumptions used in the optimization are based on the Company’s 2020 budget.

A Technical Report prepared in accordance with NI43-101 for the Point Rousse Project will be filed on SEDAR within 45 days of this news release. For readers to fully understand the information in this news release, they should read the Technical Report in its entirety, including all qualifications, assumptions and exclusions that relate to the Mineral Reserves. The Technical Report is intended to be read as a whole, and sections should not be read or relied upon out of context.

Qualified Persons

This news release has been reviewed and approved by Kevin Bullock, P.Eng., President and CEO and Paul McNeill, P. Geo., VP Exploration with Anaconda Mining Inc., “Qualified Persons” and Michael Cullen, P.Geo., and Matthew Harrington, P.Geo. of Mercator Geological Services Limited., “Independent Qualified Persons”, under National Instrument 43-101 Standard for Disclosure for Mineral Projects.

Mr. Cullen, P.Geo. and Mr. Harrington, P.Geo. are responsible for disclosure regarding the Argyle Mineral Resource Estimate and Mr. Bullock, P.Eng. is responsible for disclosure regarding the Argyle Mineral Reserve Statement and related Project Economics.

As the company’s new technical team finalizes regional exploration targets on the property, initial drilling is focused on stepout drilling from current resources at the past-producing Torbrit mine. Company records of historic mining operations at the Torbrit and Dolly Varden mines produced average grades of 500 grams per tonne silver at Torbrit and 1,100 grams per tonne silver at Dolly Varden. Silver mineralization came from native silver, argentiferous galena and ruby silver (pyrargyrite).

“Multiple silver-rich mineralizing systems, deposits and past-producing mines present many target options for exploration at Dolly Varden,” said Shawn Khunkhun, president and chief executive officer of Dolly Varden Silver. “We are ramping up our exploration for the 2020 field season and will keep our shareholders updated regularly on results. Our priority is the discovery of more high-grade silver mineralization, which we expect to accomplish with 80 per cent of drilling at new targets and 20 per cent in high-priority resource expansion areas. It is exciting to have a geological team with so much experience and historic success in this region.”

Torbrit deposit

The main Torbrit deposit hosts strataform exhalative-style silver mineralization and overprinted by epithermal vein mineralization, with associated lead and zinc. The company’s geological team has been on site for several weeks now, working on detailed structural mapping and reinterpretations to guide the drill targeting within the plus-4,500-metre-long silver-bearing alteration belt, extending north from the current mineral resource estimate area. Additional soil sampling on the western portion of the property is continuing to help define new gold targets for late summer drill testing.

“Exploration work is progressing as planned while keeping workers safe and healthy as our top priority. We are currently testing for extensions to the mineral resource, which has been untouched by historic mining, and then will be concentrating on further defining higher-grade pockets of silver mineralization,” explained Rob van Egmond, chief geologist currently on site.

Ohra-Takamine drilling program

The drilling program consists of an initial two drill holes (approximately 950 cumulative metres) along the open-ended, 3.5-kilometre corridor of alteration and epithermal mineralization defined by the Ohra, Takamine and Urushi historic mines, where mining was halted in 1943 by the government-imposed moratorium. Historic production data indicated the presence of high-grade mineralization at the Ohra and Urushi mines, including 21,000 ounces mined at grades greater than 20 g/t gold at Ohra between 1915 and 1925, and the data also reported that the No. 2 vein in the Urushi mine hosted a high-grade shoot that carried grades between 50 g/t to 100 g/t.

Work programs completed earlier this year within the project show historically mined quartz vein mineralization coincides with gold and pathfinder element in soil anomalies, linear vertically extensive CSAMT (controlled source audio-frequency magnetotelluric) resistivity anomalies, and northeast and northwest structural intersections inferred from processed gravity data. Planned drill holes will target down-dip extensions of high-grade mineralization mined in shallowly developed workings at Urushi and Ohra coincident with the geochemical and geophysical anomalies.

For more information on geochemical and geophysical anomalies generated within the project, refer to the company’s news release dated June 11, 2020.

The company is currently unable to utilize its own drilling teams due to continuing international border closures and consequently has contracted the Ando Chisitsu Drilling Co., which has experience drilling in the local conditions including the epithermal vein deposits at the nearby Kushikino gold mine. Diamond core drilling will be carried out from surface to depths of up to 600 m.

“We are pleased to commence the first of our 2020 drilling programs in the richly gold-endowed Southern Kyushu epithermal gold province. We have been very fortunate to identify and secure a Japanese drilling contractor with the capabilities to carry out our drilling program in the midst of the global pandemic,” John Proust, chairman and chief executive officer, commented.

Qualified person

The technical information in this news release has been reviewed and approved by Japan Gold’s vice-president of exploration and country manager, Andrew Rowe, BAppSc, FAusIMM, FSEG, who is a qualified person as defined by National Instrument 43-101.

Electromagnetic (resistivity and conductivity), magnetic, and radiometric data will be collected for the entire Hercules property, with approximately 2,200 line kilometers planned. Previous work indicated a potential correlation between resistivity and gold mineralization on the property. The survey is being conducted by Geotech Ltd of Aurora, ON.

The goal of the geophysical survey is to assess property-wide exploration potential at Hercules and generate a prioritized list of targets for further drilling programs. The Company has created an 85-square-kilometer district-scale land package, through claims and ownership consolidation, that is known to host a low-sulphidation epithermal gold-silver system of undefined size.

Recent drilling by the Company highlighted the strength and continuity of the mineralized system at Hercules, intersecting broad intervals of near-surface oxide gold-silver mineralization in all target areas tested to date, some greater than 50 meters (See June 10, 2020 news release).

Results from a recent ground IP survey identified a new ‘Hercules Structural Zone’, a potential feeder structure, that extends more than 2,000 meters along strike, and remains open for expansion (See July 21, 2020 press release).

“Work to date by the Company has been systematically exploring the Hercules Gold Project,” stated Michael Allen, President and CEO of Eclipse Gold, “We have now established that Hercules hosts a large scale, epithermal gold system whose value is only now beginning to be unlocked. Our next phase of work is to assess the full scale of the system and vector in on potentially higher-grade zones.”

The Company expect results of the airborne geophysical survey in mid-August and will add to our growing understanding of the project as we plan our next round of drilling.

Treasury Metals is in the process of closing a definitive share purchase agreement with First Mining and Tamaka Gold Corp. to acquire Goldlund, after which First Mining will hold a large equity position in Treasury. Goldlund is located adjacent to Treasury’s Goliath Gold Project, which is advancing towards a construction decision in northwestern Ontario. Treasury’s acquisition of Tamaka Gold Corporation, which includes Goldlund, is expected to close by mid-August 2020, which will allow for numerous potential co-development opportunities for Treasury’s Goliath Gold Project and Goldlund (see press release dated June 3, 2020 in connection with the Transaction).

Latest highlights from holes drilled at the Main Zone include:

• Hole GL-20-033 intersected 173.80 g/t Au over 1.0 m;
• Hole GL-20-034 intersected 5.10 g/t Au over 1.0 m.

The five holes highlighted in this news release are all located in the northeast portion of the Goldlund deposit, with drilling in this area targeting definition of the northeast extension of Zone 2 and Zone 3. Gold mineralization was encountered in all five holes and included the highest grade intercept of the program (173.8 g/t gold over 1.0 metre in hole GL-20-033). As seen throughout this latest drill program, the mineralization encountered in the last five holes occurs within locally silicified, sheared and variolitic andesites, as well as gabbros and altered porphyries. This counters the conventional theory, from previous exploration work, that the mineralization at Goldlund is primarily associated with granodiorite (tonalite) which is the main host for the Zone 1 and 7 gold mineralization.

As part of the 2019-2020 drill program at the Main Zone, First Mining completed a total of 48 holes (8,958 metres). This news release incorporates results from the final five holes completed, following on from the Company’s March 2, 2020 , May 6, 2020 and July 7, 2020 news releases which announced the results of prior holes. Drilling has been completed on approximate 50 metre spacing, with the overall goal of the drill program to define and extend mineralization in the eastern and western portions of the Main Zone area. The 2019-2020 drill program at the Main Zone has been successful both in identifying other host lithologies for the gold mineralization, and in demonstrating that additional mineralization also occurs between the currently-defined mineralized zones. Drill results from the northeast area have confirmed the continuity of higher-grade mineralization over approximately 600 metres of strike length, with mineralization remaining open in both directions along strike. Mineralization also remains open to the southwest of the current resource area.

Select assay results from these five holes from the Main Zone drill program are reported below.

Drill Result Details

A plan map showing the drill hole locations and assay status at the Main Zone can be viewed at the First Mining website.

A complete list of the 2019 and 2020 drill results to date, including hole details, can be viewed at the First Mining website.

Treasury Metals has not independently verified the data in the press release issued August 4, 2020, by First Mining. As per the First Mining press release and at the request of IIROC, below is the QA/QC as stated by First Mining on these drill results and the First Mining drill program.

QA/QC Procedures

“The QA/QC program for the 2019-2020 drilling program at Goldlund consisted of the submission of duplicate samples and the insertion of Certified Reference Materials and blanks at regular intervals. These were inserted at a rate of one standard for every 20 samples (5% of total) and one blank for every 30 samples (3% of total). The standards used in the 2019-2020 Goldlund drilling program range in grade from 0.5 g/t Au to 9.0 g/t Au, and were sourced from CDN Resource Laboratories in Langley, BC. Blanks have been sourced locally from barren granitic material.

Field duplicates from quartered core, as well as ‘coarse’ or ‘pulp’ duplicates taken from coarse reject material or pulverized splits, were also submitted at regular intervals with an insertion rate of 4% for field duplicates and 4% for coarse or pulp duplicates. Additional selected duplicates are being submitted to an umpire lab for check assaying. SGS also undertakes its own internal coarse and pulp duplicate analysis to ensure proper sample preparation and equipment calibration.

Qualified Person

Hazel Mullin, PGeo, Director, Data Management and Technical Services of First Mining, is a “Qualified Person” for the purposes of National Instrument 43-101 — Standards of Disclosure for Mineral Projects, and she has reviewed and approved the scientific and technical disclosure contained in this news release.”

Debt restructuring

Pursuant to the terms of the definitive agreements, the company, Hudson Greenland and the lenders amended the existing loan facilities between the parties to, among other things:

• Convert approximately $13.7-million (U.S.) of the existing debt of $42-million (U.S.) owed to the lenders pursuant to the loan facilities, into preferred shares of Hudson Greenland, thereby reducing the company’s interest payments substantially;
• Extend the maturity of the loan facilities from July 15, 2025, to Jan. 15, 2028, and push out the first principal payment payable under the loan facilities from Jan. 15, 2021, to Jan. 15, 2023;
• Cancel all intercompany debt owed by Hudson Greenland to the company;
• Reduce the interest rate of the $10-million (U.S.) backstop facility (announced on Dec. 18, 2019) from 20 per cent to 9.5 per cent over the London interbank offered rate (LIBOR);
• Amend the interest payments terms of the loan facilities to enable the company to pay interest to the lenders on the consolidated and reduced principal amount every six months in arrears;
• Give Hudson Resources the option to buy back its interest from the lenders for 200 per cent of the subscription price.

The conversion of existing debt into preferred shares of Hudson Greenland pursuant to the definitive agreements will result in the lenders holding approximately 69 per cent of Hudson Greenland. Additionally, the lenders will have the right to each nominate one director to the Hudson Greenland board, which will comprise four members, including one member from Greenland Ventures, a government investment fund that holds eight million shares of Hudson Resources.

Convertible debenture financing

In connection with the debt restructuring, Hudson Greenland has agreed to issue a convertible debenture in the amount of $10-million (U.S.) to the lenders, to provide financing directly into Hudson Greenland. The debenture has a maturity date of five years from the date of issuance and will be convertible into preferred shares in the capital of Hudson Greenland. The debenture will not bear interest and will not confer voting rights on the lenders until conversion of the debenture, in accordance with its terms.

The debenture ranks pari passu with Hudson Greenland’s other unsecured and unsubordinated debt. In the event the debenture is converted in full, the lenders’ ownership interest in Hudson Greenland would increase to approximately 79 per cent.

Hudson Greenland will use the proceeds of the debenture for working capital and general corporate purposes, as approved by Hudson Greenland’s board of directors.

This debt restructuring and new capital injection do not dilute the company’s shareholders. These transactions demonstrate the lenders’ commitment to Hudson, the government of Greenland and Hudson’s shareholders, which will benefit from this new agreement. As a result of these transactions, the lenders will become partners going forward which will help the company realize the true value of this unique anorthosite mine and its many green applications.

Jim Cambon, president, commented: “I am very pleased that we have concluded an agreement with our lenders that provides a solid path forward for the White Mountain mine, including the injection of $10-million (U.S.) in working capital without dilution to the Hudson Resources share structure. Our lenders are now our partners and our interests are aligned in growing the mine into a successful business producing green products in numerous revenue streams. Importantly, we have retained the right to regain full ownership of Hudson Greenland in the future. We look forward to getting the mine back up and running in short order.”

This debt restructuring and new capital injection are subject to (i) approval of the TSX Venture Exchange and the satisfaction of any conditions to final approval that may be imposed by the TSX Venture Exchange, (ii) receipt of the consent of the Minister of Mineral Resources of Greenland in respect of the change of control of Hudson Greenland, and (iii) other conditions which are customary for transactions of this type.

Aside from its ownership in the White Mountain anorthosite mine through Hudson Greenland, the company also holds 100 per cent of the Sarfartoq rare earth element (REE) and niobium/tantalum exploration licence in Greenland. The company expects to commence activities on the Sarfartoq licence in the coming weeks with an initial focus on the high-grade niobium project.

Hudson has commenced activities to take the White Mountain mine from care and maintenance to full operations. Hudson Resources will continue to provide operational, sales and marketing expertise to Hudson Greenland. There are still some travel restrictions due to the global pandemic, but Hudson has been given permission from the Greenlandic government to mobilize the team back to the site and commence operations. Blasting has already recommenced and the plant is expected to start up in the next two weeks.

Q2 2020 HIGHLIGHTS

Oyu Tolgoi Underground Development Update {&#A A ; –} Mongolia

The Oyu Tolgoi project in Mongolia includes two separate land holdings: the Oyu Tolgoi mining licence, which is held by Entree’s joint venture partner Oyu Tolgoi LLC (“OTLLC”) and the Entree/Oyu Tolgoi JV Property, which is a partnership between Entree and OTLLC. On July 2 and July 28, 2020, OTLLC’s 66% shareholder Turquoise Hill Resources Ltd. (“Turquoise Hill”) provided updates on underground development:

The unprecedented circumstances of the COVID-19 (coronavirus) pandemic impacted some aspects of underground construction in the second quarter 2020 due to continued restrictions on mine site access for teams from OTLLC, Rio Tinto International Holdings Ltd. (“Rio Tinto”) and their construction partners.

Despite the challenges presented by COVID-19, underground development on the Oyu Tolgoi mining licence continued, achieving strong productivity in underground advancement during the second quarter 2020 (1,830 equivalent metres in June with an average monthly rate of 1,831 equivalent metres for the quarter).

Shafts 3 and 4 continued on care and maintenance and this is expected to continue until expert service providers can return to site to complete technical commissioning of specialized equipment and commence sinking activities. Work also slowed on some essential underground material handling infrastructure, in particular the construction of primary crusher one, which has now returned to 24-hour shifts following a period of day shift only. Personnel numbers on site have been limited in order to manage the risks around COVID-19.

Routine Shaft 2 rope shortening was successfully completed utilizing remote presence technology. Payload and speeds are back to planned levels and people and materials movement via the service hoist continue to operate normally.

On July 2, 2020, Turquoise Hill announced the completion of an updated Oyu Tolgoi Feasibility Study (“OTFS20”) that incorporates the new mine design for the first lift (“Lift 1”) of Hugo North Panel 0 announced by Turquoise Hill on May 13, 2020. OTLLC is in the process of submitting OTFS20 with the Government of Mongolia in order to comply with local regulatory requirements. OTFS20 does not reflect the impacts of the COVID-19 pandemic, which are ongoing and continue to be assessed.

Turquoise Hill also announced on July 2, 2020 its updated mineral resources and mineral reserves prepared in accordance with the requirements of National Instrument 43-101 {&#A A ; –} Standards of Disclosure for Mineral Projects (“NI 43-101”), and CIM definition standards for mineral resources and mineral reserves (2014). The new mine design for Panel 0 reduces the mineral reserve estimate for the overall Hugo North Lift 1 underground mine due to the inclusion of two structural pillars planned to be located on the Oyu Tolgoi mining licence. However, the ore tonnes and contained copper, gold and silver for the Probable mineral reserve that Turquoise Hill reported for Hugo North Extension Lift 1 on the Entree/Oyu Tolgoi JV Property have all increased.

The block cave design incorporated in OTFS20 provides for 120 metre structural pillars included to the north and south of Panel 0, protecting ore handling infrastructure (which will be moved into the structural pillars) and increasing the optionality of sequencing Panel 1 and Panel 2. The Hugo North Extension deposit on the Entree/Oyu Tolgoi JV Property is located at the northern portion of Panel 1 and is not affected by the pillars.

Turquoise Hill believes the existing feasibility study designs for Panel 1 and Panel 2 remain executable based on the current orebody understanding. However, with the introduction of structural pillars, Panels 1 and 2 become independent, allowing for much greater operational flexibility.

Panel 1 and Panel 2 design optimization studies have been initiated by OTLLC and Rio Tinto. The studies are not expected to delay the ramp up of Panel 1 or Panel 2. Drilling work is underway and the resulting updates to geotechnical modelling and mine design review are expected by Turquoise Hill to continue into 2021.

OTFS20 incorporates an update to the first sustainable production schedule and capital cost estimates for the underground mine development based on the new block cave mine design for Panel 0. The new design anticipates a base case development capital cost of $6.8 billion, with a range of $6.6 billion to $7.1 billion, and a target to first sustainable production from the Oyu Tolgoi mining licence of February 2023, with a target range between October 2022 and June 2023, inclusive of an allowance for schedule contingency. The mine design for Panel 0 will now undergo further detailed design, engineering and optimization to support the definitive estimate review (the “Definitive Estimate”), expected to be completed by OTLLC, Rio Tinto and Turquoise Hill before the end of the year, subject to any delays due to the impacts of the COVID-19 pandemic.

Entree/Oyu Tolgoi JV Property

Entree’s 2018 Technical Report completed on its interest in the Entree/Oyu Tolgoi JV Property discusses two development scenarios, a reserve case (the “2018 Reserve Case”) and a Life-of-Mine Preliminary Economic Assessment (the “2018 PEA”). The 2018 Reserve Case is based only on mineral reserves attributable to the Entree/Oyu Tolgoi joint venture (the “Entree/Oyu Tolgoi JV”) from Lift 1 of the Hugo North Extension underground block cave. Both the 2018 Reserve Case and the 2018 PEA are based on information reported within the 2016 Oyu Tolgoi Feasibility Study.

The Company has not yet been provided with OTFS20 or any of the data or assumptions underlying OTFS20, the block cave designs in OTFS20 or Turquoise Hill’s updated mineral resources and reserves and the Company is therefore unable to verify such data or the scientific and technical disclosures made by Turquoise Hill at this time. For information on the Company’s interest in Entree/Oyu Tolgoi JV Property, see the 2018 Technical Report available on SEDAR at http://www.sedar.com.

Once the Definitive Estimate and the Panel 1 optimization studies have been completed and delivered to Entree with OTFS20, the Company will be able to assess the potential impact on Entree/Oyu Tolgoi JV Property resources and reserves as well as production and financial assumptions and outputs from the two alternative cases, the 2018 Reserve Case and the 2018 PEA. Entree will continue to evaluate any information made available to it by Rio Tinto or OTLLC and will update the market accordingly.

Corporate

Q2 2020 operating loss was $0.5 million compared to the operating loss of $0.4 million in Q2 2019. The increase was due to professional and advisory fees related to advancing potential amendments to the Entree/Oyu Tolgoi joint venture agreement (the “Entree/Oyu Tolgoi JVA”).

Q2 2020 operating cash outflow after working capital was $0.4 million compared to a $0.5 million operating cash outflow in Q2 2019.

As at June 30, 2020, the cash balance was $4.5 million and the working capital balance was $4.4 million. The Company holds the majority of its cash in Canadian currency.

The Company recognizes the unprecedented situation surrounding the ongoing COVID-19 pandemic and is closely monitoring the effect of the COVID-19 pandemic on its business and operations and will continue to update the market on the impacts to the Company’s business and operations in relation to these extraordinary circumstances.

OUTLOOK AND STRATEGY

The Company’s primary objective for the 2020 year continues to be to work with other Oyu Tolgoi stakeholders to advance potential amendments to the Entree/Oyu Tolgoi JVA that currently governs the relationship between Entree and OTLLC and upon finalization, transfer the Shivee Tolgoi and Javhlant mining licences to OTLLC as manager of the Entree/Oyu Tolgoi joint venture. The form of Entree/Oyu Tolgoi JVA was agreed between the parties in 2004, prior to the execution of the Oyu Tolgoi Investment Agreement and commencement of underground development. The Company currently is registered in Mongolia as the 100% ultimate holder of the Shivee Tolgoi and Javhlant mining licences.

The Company believes that amendments that align the interests of all stakeholders as they are now understood, would be in the best interests of all stakeholders, provided there is no net erosion of value to Entree. No agreements have been finalized and there are no assurances agreements may be finalized in the future.

The Company continues to expect 2020 full year expenditures, which include Mongolian site management and compliance costs, to be between $1.5 million and $1.7 million.

The Company’s interim financial statements and Management’s Discussion and Analysis (“MD&A”) for the second quarter ended June 30, 2020 are available on the Company’s website at http://www.EntreeResourcesLtd.com, on SEDAR at http://www.sedar.com and on EDGAR at http://www.sec.gov.

QUALIFIED PERSON

Robert Cinits, P.Geo., consultant to Entree and the Company’s former Vice President, Corporate Development, and a Qualified Person as defined by NI 43-101, has approved the technical information in this release. For further information on the Entree/Oyu Tolgoi JV Property, see the Company’s Technical Report (the “2018 Technical Report”), titled “Entree/Oyu Tolgoi Joint Venture Project, Mongolia, NI 43-101 Technical Report”, with an effective date of January 15, 2018, available on SEDAR at http://www.sedar.com.

Mr. Harcus is a chartered professional accountant (CPA, CA) with more than 12 years of financial and accounting experience. He has an extensive background in financial management and reporting, corporate transactions and working with international jurisdictions including Mexico. Prior to joining Prime, he served as Chief Financial Officer and vice-president of finance at Alio Gold Inc., which was recently acquired by Argonaut Gold Inc. He has held public accounting positions with Grant Thornton LLP and Ernst and Young.

Daniel Kunz, chief executive officer and director, stated, “We welcome Ian to the team and look forward to working with him as Prime continues to advance our exciting Los Reyes gold-silver project in Sinaloa, Mexico.”

The Company’s Board of Directors has approved the granting of incentive stock options to management and consultants, to purchase up to an aggregate of 425,000 common shares in the capital stock of the Company at a price of $1.92 per share for a period of 5 years. The options will vest one-third immediately as of the date of grant; one-third six months after the date of the grant; and one-third 12 months after the date of the grant. This stock option grant is subject to acceptance by the TSX Venture Exchange.

“We are thrilled with the investor reception we have had with this private placement in conjunction with the ExploreCo acquisition. We have closed an ‘upsized’ and oversubscribed round of financing that will fund our exploration initiatives on these two highly prospective projects well into 2021. We expect to have crews on the ground in mid-August to commence our Phase 1 programs, that will culminate with drill programs on high priority targets in the late 2020. Recent development and exploration success that companies like Galway Metals (Clarence Stream Project, NB), Marathon Gold (Valentine Lake, NL) and our colleagues at Anaconda (Goldboro, NS, and Point Rousse, NL) are having, along with the successful acquisition of Atlantic Gold (Moose River, NS) by St. Barbara, just to mention a few has catalysed investor interest in the Atlantic Canada. The acquisition of this impressive gold project portfolio with established 43-101 Mineral Resources and multiple drill ready targets will allow us to rapidly generate value for our shareholders as we undertake our goal of becoming the next Atlantic Canada gold exploration success story.”

~ Lew Lawrick, President and CEO, Magna Terra Minerals

“In 2018, Anaconda created a wholly-owned subsidiary to hold our advanced stage, highly-prospective Atlantic Canadian exploration projects, with the aim of exploring strategic alternatives to realize value for shareholders. We have assembled these gold projects in areas with sizeable land packages that provide the platform to build significant district-scale mineral resources in Atlantic Canada in the long term. We are well positioned to realize future value for our shareholders in partnership with the strong team at Magna Terra, while remaining focused on our producing and development assets at the Point Rousse operation, the Goldboro Gold Project, and the exciting Tilt Cove Gold Project.”

~ Kevin Bullock, President and CEO, Anaconda Mining Inc.

Acquisition Details

The Acquisition was subject to numerous conditions, including, (i) the Acquisition being approved by the disinterested shareholders of the Company, (ii) the consolidation of the Company’s issued and outstanding shares on the basis of seven (7) old common shares for one (1) new common share of the Company (the “Consolidation”) and (iii) the completion of a private placement for minimum gross proceeds of $1.5 million (see news release dated October 15, 2019 for more details on the Acquisition). All currencies in this press release are reported in Canadian dollars.

The Consolidation and the Acquisition were approved by the Company’s disinterested shareholders at the annual and special meeting held on February 27, 2020. The Consolidation was effective on July 30, 2020, and immediately prior to the completion of the Acquisition there were 12,493,482 common shares of the Company issued and outstanding on a post Consolidation basis.

Financing Details

Concurrently with the closing of the Acquisition, the Company raised gross proceeds of $4.987 million (the “Offering”) as follows on a post-Consolidation basis: (i) flow-through common shares (the “FT Shares”) at a price of $0.25 per share for gross proceeds of $155,000 (620,000 FT Shares); (ii) common share Units (the “Units”) at a price of $0.20 per Unit for gross proceeds of $2,222,000 (11.11 million units). Each Unit is comprised of one common share and one-half of one share purchase warrant (each whole warrant being a “Unit Warrant”), each Unit Warrant entitling the holder thereof to purchase one additional common share of the Company at a price of $0.30 per share for a period of 24 months; (iii) charity flow-through units (the “Charity FT Units”) at a price of $0.29 per Charity FT Unit for gross proceeds of $2,610,000. Each Charity FT Unit is comprised of one flow-through common share and one-half of one common share purchase warrant (each whole warrant being a “Charity FT Unit Warrant”), each Charity FT Unit Warrant entitling the holder thereof to purchase one additional common share of the Company at a price of $0.30 per share for a period of 24 months.

In connection with the Offering, the Company paid Finder’s fees totalling $87,660, and issued a total of 436,800 non-transferable share purchase warrants (the “Finder Warrants”), each Finder Warrant entitling the holder to purchase one additional common share of the Company at a price of $0.30 per share for a period of 24 months . All securities issued in connection with the Acquisition and the Offering are subject to a regulatory hold period of four (4) months and one day expiring on December 1, 2020.

Related Party Transaction

One insider of the Company, Thorsen-Fordyce Merchant Capital Inc., a company controlled by Lewis Lawrick, Director, President and Chief Executive Officer of the Company, participated in the Offering by acquiring 2,750,000 Units of the Company for total gross proceeds of $550,000. This subscription is considered to be a “related party transaction” for purposes of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The Company did not file a material change report more than 21 days before the expected closing date of the Offering as the participation therein by such “related party” of the Company was not settled until shortly prior to the closing of the Offering. The Company is relying on exemptions from the formal valuation and minority shareholder approval requirements available under MI 61-101. The Company is exempt from the formal valuation requirement in section 5.4 of MI 61-101 in reliance on section 5.5(b) of MI 61-101 (Issuer Not Listed on a Specified Market). Additionally, the Corporation is exempt from minority shareholder approval requirement in section 5.6 of MI 61-101 in reliance on section 5.7(b) of MI 61-101 (Fair Market Value Not More Than $2,500,000).

Furthermore, as the Acquisition constitutes a “Reverse Take Over” under the policies of the TSX Venture Exchange (the “Exchange”), the common shares of the Company issued to Anaconda in connection with the Acquisition and the securities held by the Principals of the Company (as such term is defined on the policies of the Exchange) are subject to an eighteen (18) month escrow agreement with Computershare Investor Services Inc. For more details regarding the securities subject to escrow in connection with the Acquisition, see the Company’s information circular dated January 27, 2020 available on SEDAR under the Company’s profile.

Following completion of the Acquisition and the Offering, Magna Terra has 45,716,964 common shares issued and outstanding, of which the existing shareholders of the Company, prior to the completion of the Acquisition and the Offering, and Anaconda each hold 12,493,482 shares (27.33%), and the subscribers of the Offering hold 20,730,000 shares (45.34%). In connection with the the Acquisition, the Parties have also entered into an investor rights agreement (the “Investor Rights Agreement”) pursuant to which Anaconda will have certain rights, including:- the right to participate in any future equity financings undertaken by Magna Terra in order to allow Anaconda to maintain its then percentage ownership interest in Magna Terra; such participation right will not apply to any issuance of securities (a) pursuant to Magna Terra’s existing stock option plan and other incentive plans as may be approved by its shareholders from time to time, or to management, directors and employees of the Corporation for compensatory purposes; or (b) upon the exercise or conversion of any convertible or exchangeable securities outstanding on the date the Investor Rights Agreement was entered into; or (c) in connection with or pursuant to any merger, business combination, exchange offer, take-over bid, arrangement, asset purchase transaction or other acquisition of assets or shares of a third party, provided, however, that Anaconda will be permitted to exercise its participation right in connection with the issuance of any shares or other securities of Magna Terra that may be delivered pursuant to the terms of any option agreement, earn-in agreement or similar agreement that Magna Terra or any of its subsidiaries may be party to that does not exist as of the date the Investor Rights Agreement was entered into;- the right to appoint two (2) directors on the Board of Directors of Magna Terra as long as Anaconda’s ownership interest is above 20%, and one (1) director if Anaconda’s ownership interest falls below 20%, it being agreed that such designated directors would be Mr. Lew Lawrick and Mr. Michael Byron for as long as such persons remained Directors of Anaconda.

All the above rights shall automatically terminate and be of no further force or effect at the later of (i) December 30, 2021, and (ii) Anaconda ceasing to beneficially own more than 10% of the issued and outstanding common shares of Magna Terra (on an undiluted basis).

The Investor Rights Agreement also provides that Anaconda will be subject, until December 30, 2021, to a standstill obligation pursuant to which, among other things, it will not without the prior authorization of the board of directors of Magna Terra, purchase, offer or agree to purchase or negotiate to purchase any securities or assets of Magna Terra other than in connection with acquisitions carried out by Anaconda or its affiliates where such securities, when added together with the securities held by Anaconda, its affiliates and any other person acting jointly or in concert would cause Anaconda’s ownership percentage to exceed 35%. The Investor Rights Agreement further provides that Anaconda will vote or cause to be voted, all common shares of Magna Terra beneficially held or controlled by Anaconda, at all shareholder meetings of Magna Terra to be held until December 30, 2021, in favour of each matter recommended by the Board of Directors of Magna Terra for approval by its shareholders at each such meeting. A copy of the Investor Rights Agreement will be filed shortly on SEDAR under the Company’s profile.

The Acquisition and Offering remain subject to the final approval from the Exchange. It is expected that trading in the common shares of the Company will resume under the same trading symbol (TSX-V: MTT / CUSIP: 559271200 / ISIN: CA5592712007) two (2) business days following the issuance of the final bulletin of the Exchange.

Atlantic Canada Project Highlights

Encompasses three projects in the established mining jurisdictions of Newfoundland and Labrador and New Brunswick; district scale exploration potential; past production; three known deposits with numerous high-grade gold showings and prospects. Highlights include:Combined 12,375 hectares of highly prospective mineral lands over three projects in Atlantic Canada;Includes total 28 km strike along two, regional scale, gold bearing structures;District scale exploration potential with numerous gold showings, prospects and deposits;Established mining jurisdictions of Newfoundland and Labrador and New Brunswick; andLow cost of exploration with all projects road accessible.

Great Northern and Viking ProjectsIncludes 9,775 hectares of highly prospective geology coincident with 20 kilometres of strike along a regional scale, gold related structure – the Doucer’s Valley Fault;Located adjacent to the Doucer’s Valley Fault, part of the Long Range Fault system – a fertile gold bearing structure, similar to that associated with Marathon Gold’s Valentine Lake project in central Newfoundland, which has been the focus of recent significant resource growth and discovery;Host to several known deposits including Rattling Brook (Great Northern) and Thor (Viking) as well as high-grade prospects including Jackson’s Arm (Great Northern) that present numerous drill ready targets and potential for near term discovery; andMineral Resources – Magna Terra has completed an updated NI 43-101 Technical Report and Mineral Resource Estimate on the Rattling Brook Deposit, details of which are available on SEDAR, and on the Company’s website.

Details of the Great Northern and Viking Projects

The Great Northern and Viking Projects comprise 2 separate claim blocks (9,775 hectares) that are located 3 km north and 15 km south of the community of Jackson’s Arm, NL, respectively (Exhibit A and Exhibit B).

The Great Northern Project is comprised of four mineral exploration licences that collectively encompass 167 mineral claims covering approximately 4,175 hectares.

The Viking Project is comprised of 3 mineral exploration licences totalling 224 claims covering 5,600 hectares.

Geology and Mineralization

The Great Northern and Viking Projects are centered along the Doucer’s Valley Fault, a regional splay of the Long Range Fault. The Doucer’s Valley Fault is a significant geological control on, and host to, several gold deposits, including the Rattling Brook Deposit and the Thor Deposit.

Gold mineralization at Great Northern and Viking occurs either as disseminated gold, hosted in Precambrian or Ordovician granites or in the unconformably, overlying adjacent volcanic and sedimentary rocks. The sedimentary-hosted gold mineralization is typically higher grade. Rocks underlying each claim block show both styles of mineralization with granite-hosted gold mineralization in the Road and Incinerator Trail Zones and sedimentary-rock-hosted Beaver Dam Zone, or as a combination as in the Apsy Zone. The Thor Deposit is hosted in Precambrian granites and the adjacent Kramer Prospect shows mineralization hosted within the overlying Cambrian quartzites.

Alteration consists of mesothermal style quartz plus or minus iron carbonate plus or minus sulfide veins and stockworks with 2- 5% total sulfides consisting of pyrite, galena, chalcopyrite or sphalerite, and locally show trace amounts of visible gold.

The Great Northern Project is host to several untested gold prospects and showings, including the Shrik, Stocker, Boot N’ Hammer, 954 Prospects, and Incinerator Trail Zone. Surface grab samples assaying up to 20.2 grams per tonne (“g/t”) gold and 1,232 g/t silver at the Boot N’ Hammer Prospect; up to 56.7 g/t gold and 2.75 oz/t silver at the Stocker Prospect; up to 7.2 g/t gold at the Shrik Prospect; and 13.6 g/t gold at the 954 Prospect. The Incinerator Trail Zone has been tested by four reconnaissance-style diamond drill holes in the 1980’s and returned assays of 1.78 g/t gold over 4.0 m (hole RB-35) and 2.30 g/t gold over 4.05 m (hole RB-41).

The Shrik, Stocker, Boot N’ Hammer prospects are hosted within a 1.7 km long by 40 to 400 m wide continuous alteration zone, that is controlled by a north-south striking fault. The fault extends immediately to the north along strike with similar repeating fault zones to the east outlining a potential strike extent of an additional 4 km. Initially, exploration in this area will be a primary focus for Magna Terra.

The Viking Project is host to variably tested gold prospects and showings including the Viking, Asgard, Thor’s Cross, Odin’s Triangle and Kramer Prospects. Trenching along the Viking Trend has returned gold grades ranging between 0.10 and 0.40 g/t over continuously sampled intervals of up to 40 m, and high-grade results including a grab sample from a large boulder of altered granite from the northeast end of the Viking Trend which returned 12.0 g/t gold, and a channel sample grading 9.9 g/t gold and 52 g/t silver over 1.4 metres.

Cape Spencer Highlights8 kilometres of highly prospective strike in the hanging wall of a regional scale structure with 10 known gold occurrences including the Emilio Zone (7.86 g/t over 7.4 m; AB-04-06) and drill ready targets;Hosted within similar Proterozoic-aged rocks of the Avalon Zone that host multi-million ounce gold deposits such as Haile, Ridgeway, and Hope Brook gold depositPast production (1985-1989) of 194,224 tonnes producing 4,832 ounces @~50% recovery through heap leach;Two gold deposits open along strike – past drilling demonstrates broad zones of mineralization;Project has been dormant since 2005, with most of the historic work conducted between 1982-1987.Magna Terra has completed an updated NI 43-101 Technical Report and Mineral Resource Estimate on the Cape Spencer Deposit, details of which are available on SEDAR, and on the Company’s website.

Details of the Cape Spencer Project

The Cape Spencer Project is an exploration stage project that has a history of past-production and the potential for near-term resource growth and discovery. Cape Spencer is located 15 kilometers southeast of Saint John, New Brunswick (Exhibit A and Exhibit C), comprising 104 mineral exploration claims covering 2,365 ha of land.

The Cape Spencer Project is centered along the Millican Lake Fault, a regional splay of the Caledonia and Cobequid Fault Zones. The Property is underlain by Precambrian Millican Lake granite, and Coldbrook and Cape Spencer volcanic and sedimentary rocks. The Precambrian stratigraphy is unconformably overlain by and in fault contact with younger Carboniferous sedimentary rocks of the Lancaster Formation.

Gold mineralization at Cape Spencer is hosted within Precambrian Millican Lake granite or bounding Coldbrook and Cape Spencer volcanic and sedimentary rocks, with mineralization and alteration focussed along strongly faulted and sheared contacts between the two lithologies. Alteration consists of pervasive and patchy illite + pyrite + quartz plus or minus iron carbonate plus or minus sulfide veins and stockworks with 2-5% total sulfides consisting of pyrite, galena, chalcopyrite or sphalerite, and locally show trace amounts of visible gold.

There are several gold prospects that warrant additional exploration over an 8-kilometre strike outside of the Pit and Northeast Zones particularly in the eastern half of the property that will initially be a primary focus for Magna Terra.

Highlights from historic exploration work outside of the main deposit areas from 1982 to 2004 include:

Emilio Zone – Prospect at Eastern end of Property 7.86 g/t gold over 7.4 m (AB-04-06; near surface);12.00 g/t gold over 1.4 m (chip) and 2.77 g/t gold over 3.0 m (chip); andSurface grab samples up to 168.00 g/t gold

Birches Zone – 300-metre-long gold-bearing alteration zone south of the Northeast Zone. 17.85 g/t gold over 1.0 metre within a zone grading 5.23 g/t gold over 4.0 metres (MR-150);9.48 g/t gold over 1.0 metre within a zone grading 4.01 g/t gold over 4.0 metres (MR-149);3.60 g/t gold over 5.0 metres (AB-04-08);12.00 g/t gold over 1.4 metres (chip) and 2.77 g/t gold over 3.0 metres (chip); andSurface grab samples up to 168.00 g/t gold

Zone A – *Grab samples up to 53.50 g/t gold.

Zone C – *Grab samples up to 8.92 g/t gold and chip sample of 2.77 g/t gold over 3.0 m.

Zone D – *Five occurrences of visible gold with grab samples up to 7.12 g/t gold.

*Grab samples are selected samples and are not necessarily indicative of mineralization that may be hosted on the property.

Early Warning

In connection with the Acquisition, Anaconda acquired ownership and control of 12,493,482 common shares in the capital of Magna Terra representing approximately 27.32% of the issued and outstanding common shares of Magna Terra as of July 30, 2020. The deemed consideration payable for the common shares was $2,498,696.40, calculated as an aggregate of 12,493,482 common shares at a price of $0.20 per common share. Prior to the completion of the Acquisition, Anaconda did not hold any securities in Magna Terra.

The common shares were acquired pursuant to a share purchase agreement between Magna Terra and Anaconda and did not take place through the facilities of any market for Magna Terra’s securities. This transaction was effected for the sale of ExploreCo, a wholly-owned subsidiary of Anaconda. Anaconda may increase or decrease their investments in Magna Terra at any time, or continue to maintain their current investment position, depending on market conditions or any other relevant factor.

This portion of this new release is issued pursuant to National Instrument 62-103 – The Early Warning System and Related Take-Over Bid and Insider Reporting Issues, which also requires an early warning report to be filed on SEDAR (www.sedar.com) containing additional information with respect to the foregoing matters. A copy of the related early warning report may be obtained on Magna Terra’s SEDAR profile or by contacting Anaconda at 150 York Street, Suite 410, Toronto, Ontario M5H 3S5, Attention: Robert Dufour tel: 416-304-6622.

Qualified Person

This news release has been reviewed and approved by David A. Copeland, P. Geo., Chief Geologist with Anaconda Mining Inc., a “Qualified Person”, under National Instrument 43-101 – Standard for Disclosure for Mineral Projects. Widths from drill core intervals reported in this press release are presented as core lengths only. True widths are unknown. All quoted drill core sample intervals, grades and production statistics have been compiled from historic assessment reports obtained from either the Government of New Brunswick or Newfoundland and Labrador.

Personnel assigned to this phase of the project left the firm for another opportunity. This resulted in a significant reduction in capacity and has affected the project schedule;

Inefficiencies due to a change in their typical workflow and practices amidst the current pandemic.

While the Company is disappointed in this delay it understands the uniqueness of the situation and looks forward to receipt of the new mineral resource estimate.

Brewery Creek Mine: Resources1

The Company anticipates the release of a new Mineral Resource Estimate by August 25th which will fully integrate all drilling to date. This will supersede the 2019 Mineral Resource Estimate:

2019 Brewery Creek Mineral Resource Estimate(1)                           
           Oxide           Tonnes                      g/t                          Gold Oz.         
         Indicated                  21,140,000                 1.13                  765,000         
         Inferred                   14,120,000                 0.97                  440,000         
                                                                                                     
          Sulfide                     Tonnes                    g/t                 Gold Oz.         
         Inferred                   8,570,000                  0.99                  270,000         
2019 drilling results and m aterials on the heap leach pad were not included in the resource update. 

The technical content of this news release has been reviewed and approved by Michael Maslowski, CPG, a Qualified Person as defined by National Instrument 43-101 and is employed by the Company as its Chief Operating Officer.

Shareholders, analysts, investors and media are invited to join the webcast and conference call by logging in here Avino Second Quarter 2020 Webcast and Conference Call or by dialing the following numbers five to ten minutes prior to the start time.

Toll Free Canada & USA:1-800-319-4610

Outside of Canada & USA:1-604-638-5340

No passcode is necessary to participate in the conference call or webcast; participants will have the opportunity to ask questions during the Q&A portion.

The conference call and webcast will be recorded, and the replay will be available on the Company’s web site later that day.

Restricted Share Unit and Option Grant

In addition, Avino announced, that upon the recommendations of its Compensation Committee, it granted an aggregate of 1,700,000 incentive stock options (the “Stock Options”) under its Stock Option Plan, and 1,481,000 Restricted Share Units (“RSUs”) under the Restricted Share Unit Plan to its directors, officers, employees and consultants. Both the Stock Option Plan and Restricted Share Unit Plan have been previously approved by shareholders, and no further approval from shareholders is required for these grants.

The Stock Options are exercisable for up to five years at a price of $1.64 per share and will be vested in stages over a 12-month period with no more than 1/4 of the options vesting in any three-month period from the date of the grant. The RSUs will be vested at the rate of 1/3 annually for a period of three years from the date of grant, until fully vested. The Stock Options and the RSUs are non transferable.

Conference Call and Webcast

Date: Tuesday August 11, 2020 10:00AM ET

Toll-free North America: (888) 231-8191

Local or International: (647) 427-7450

Webcast: https://produceredition.webcasts.com/starthere.jsp?ei=1343215&tp_key=66a388e6c0

Conference Call Replay

Toll-free North America: (855) 859-2056

Local or International: (416) 849-0833

Passcode: 6264678

The conference call replay will be available from 1:00PM ET on August 11, 2020 until 23:59PM ET on August 25, 2020.

The presentation will be available on the Company’s website at http://www.superior-gold.com.

Barry Hildred, president and chief executive officer of Aquila, commented: “The completion of the PEA is a significant milestone for Aquila that showcases Back Forty’s potential as a near-term producer in the United States at a time when advanced and substantially derisked projects are scarce. Back Forty is a well-defined project that also holds tremendous exploration potential. We are excited to commence work on an updated feasibility study that we anticipate will be completed next year as we advance the project through the final stages of preconstruction activities. While doing so, we plan on conducting a drill program at Back Forty to continue to expand the mineral resource at depth where the deposit remains open with numerous targets.”

Aquila will host a webcast to provide a corporate update and review the results of the PEA on Tuesday, Aug. 11, 2020, at 12 p.m. ET/9 a.m. PT. See details below.

PEA summary

The PEA was prepared in accordance with National Instrument 43-101 by P&E Mining Consultants Inc. in collaboration with Golder Associates Ltd. and Lycopodium Minerals Canada Ltd. The team was led by Andrew Boushy, PEng, senior vice-president of capital projects of Aquila, with support from Neil Lincoln, PEng, of Lincoln Metallurgical Inc. The company plans to file the PEA technical report on SEDAR within 45 days of the date of this news release. The PEA is preliminary in nature, includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be classified as mineral reserves, and there is no certainty that the PEA will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability.

                                                PEA SUMMARY METRICS

                                                                                   Base case                   Spot
Area               Item                           Units                           price deck (1)         Price deck (2)

Process production Total process feed             Million tonnes                                 15.9                 
                   Grade                          g/t gold equivalent (AuEq) (4)     4.2 g/t                3.7 g/t
                   Total recovery and payability  % of contained AuEq                  74.3%                  73.4%
                   Payable gold                   koz gold                                        692              
                   Payable gold equivalent        koz gold equivalent                  1,543                  1,323
                   Annual gold equivalent         koz gold equivalent                    128                    110
                   Life of mine                   Years                                      12 years              
                   Throughput                     Tonnes per day (t/d)      Nominal 2,800 t/d sulphides + 350 t/d oxides
Metal price deck   Gold                           $/oz                                $1,485                 $1,998 
                   Zinc                           $/lb                                 $1.08                  $1.04 
                   Copper                         $/lb                                 $3.05                  $2.92 
                   Silver                         $/oz                                $18.20                 $25.00 
                   Lead                           $/lb                                 $0.91                  $0.83 
Revenue and opex   Gross revenue                  $/t process feed                      $132                   $149 
                   NSR                            $/t process feed                      $113                   $130 
                   Total site opex                $/t process feed                                $52               
                   Royalties                      % of NSR                              2.0%                   2.1% 
                   EBITDA (3)                     $/t process feed                       $59                    $75 
                   EBITDA margin                  % of EBITDA/NSR                        52%                    58% 
                   C1 cash costs (co-product) (3) $/oz gold equivalent                  $733                   $854 
                   C1 Cash Costs (by-product) (3) $/oz gold                          $(1,392)               $(1,791)
CAPEX              Initial capital                $M                                           $250.4               
                   Sustaining capital             $M                                           $214.1               
                   AISC (co-product) (3)          $/oz gold equivalent                  $926                 $1,078 
                   AISC (by-product) (3)          $/oz gold                            $(963)               $(1,362)
Unlevered Returns  Pretax NPV 6% discount rate    $M                                  $248.3                 $430.3 
                   Pretax IRR                     %                                    31.6%                  45.4% 
                   Posttax NPV 6% discount rate   $M                                  $176.3                 $316.3 
                   Posttax IRR                    %                                    26.1%                  37.8% 
                   After-tax payback              years                                  2.4                    1.6 

1. The base case macroeconomic forecast assumes flat pricing that has been drawn from the consensus long-term 
   estimates of select banks as of July, 2020.

2. As at Aug. 4, 2020.

3. None of EBITDA (earnings before interest, taxes, depreciation and amortization), C1 cash costs or all-in sustaining
   costs (AISC) have a standardized meaning under IFRS (international financial reporting standards).

4. Gold equivalent ounces were determined by calculating the total value of metals contained or produced and dividing 
   that number by the gold price ($1,485-per-ounce gold base case or $1,998/oz gold spot case). As the denominator is 
   higher in the spot case, the gold equivalent is lower than at base case prices. Gold equivalent grade is calculated
   by dividing the number of gold equivalent ounces by the mineral resource size (tonnes).

5. Project economics reflect the company's gold and silver streaming agreements with Osisko Gold Royalties (see Aquila 
   press release dated June 18, 2020). The PEA financial model includes $30-million of initial payments under the gold 
   stream to be received during the design and construction period. The 2018 feasibility study did not include the 
   impact of the gold streaming agreement.                                           

           SENSITIVITY TO GOLD PRICE (1)

Gold price    After-tax    After-tax       Gold % of
     ($/oz)   NPV6% ($M)         IRR   gross revenue

    $1,200          $83        16.9%             40%          
    $1,400         $149        23.6%             43%          
    $1,600         $213        29.3%             47%          
    $1,800         $277        34.6%             50%          
    $2,000         $341        39.6%             52%          
    $2,200         $401        44.1%             55%          
    $2,400         $460        48.5%             57%          

(1) All other metals as base case metal prices.

Opportunities

The PEA outlined a number of initiatives that may enhance the project, including:

• Increased gold recovery: There is value in further investigating leaching sulphide flotation tailings to economically recover additional gold. Previous scoping metallurgical test work and cost analysis investigated various options, at a high level, to extract gold from flotation tailings and was favourable at gold prices above $1,600/oz.
• Contract mining: The current mine operations plan is based on an owner-operated mine fleet. Contract mining may be an option to offset initial mine capital costs and mitigate any risks associated with training, operational readiness and the availability of experienced mine personnel.
• Contract process plant operations and maintenance: The current process plant operations plan is based on owner operating and maintaining the process plant. An operations and maintenance contract may be an option to mitigate any risks associated with training, operational readiness and the availability of experienced process plant operators and maintenance personnel.
• Resource confirmation and expansion: Complete additional infill drilling with the objective of stepout drilling to potentially expand mineral resources.

Webcast details

Management will host a webcast on Tuesday, Aug. 11, 2020, at 12 p.m. ET /9 a.m. PT to provide a corporate update and discuss the PEA. Register for the webcast on-line. Please send your questions to management at dcarew@aquilaresources.com. A replay of the webcast will be available on the company’s website.

Back Forty project background

The Back Forty project is a polymetallic volcanogenic massive sulphide (VMS) deposit located in Menominee county, Michigan, United States. The Back Forty deposit was originally discovered in 2002 and is currently wholly owned by Aquila. The project is located approximately 55 kilometres south-southeast from Iron Mountain, and approximately 19 km west of Stephenson, Mich.

A feasibility study on the project was completed in August, 2018, that studied open-pit mining and on-site processing plants for treating oxide material to produce gold dore and sulphide material to produce zinc, copper and lead concentrates. The subject of the PEA relates to an expansion of the open-pit mining case (phase 1) by proposing the development of an underground mine (phase 2) associated with the project after the open-pit phase is complete. It should be noted that the company has not yet commenced the permitting process for a potential underground expansion.

While the value proposition and operating context for the PEA are similar to the 2018 feasibility study, the PEA reflects certain enhancements including:

• As a result of the addition of an underground mine expansion, the oxide and sulphide processing plants were resized to a lower nominal throughput to align them with expected underground mine throughput and to optimize the project’s economics. The oxide process plant throughput has been reduced from 800 tonnes per day to 350 t/d and the sulphide process plant throughput has been reduced from a nominal 4,000 t/d to 2,800 t/d. The reduction in process plant throughput contributed to a $54-million decrease in initial capital expenditures versus the 2018 feasibility study.
• The oxide processing flowsheet was updated to include a SART (sulphidization, acidification, recycling and thickening) plant for optimal dore quality, silver recovery, mercury management and cyanide management.
• Process plant feed, stockpile management and sulphide process plant changeovers have been optimized to improve operability.
• Additional metallurgical test work has been incorporated to assess blending options and recovery performance and penalties.
• Updated permit conditions have been incorporated, including a double liner leak detection system under all waste rock storage areas and additional contact water storage volume.

Mineral resource estimate

The mineral resource estimate is set out in the “Mineral resource estimate as at Oct. 14, 2019” table and was prepared by P&E Mining Consultants Inc. The deposit is well defined with 94 per cent of the mineral resource contained in the measured and indicated (M+I) classifications. On a gold equivalent basis, the deposit contains 2.5 million gold equivalent ounces in the M+I classifications at a grade of 4.3 grams per tonne gold equivalent.

                       MINERAL RESOURCE ESTIMATE AS AT OCT. 14, 2019

Classification     Tonnes         Gold         Gold       Silver         Silver     Copper
                    (000s)        (g/t)        (koz)        (g/t)          (koz)        (%)
Open pit
Measured            7,062         1.94        440.1        18.95        4,302.0       0.34
Indicated           4,341         1.75        244.7        29.67        4,140.1       0.14
M+I                11,403         1.87        684.8        23.03        8,442.0       0.27
Inferred              264         3.13         26.6        42.32          359.4       0.06
Underground
Measured            1,382         2.21         98.0        25.37        1,127.7       0.30
Indicated           5,486         1.86        327.7        25.98        4,582.8       0.42
M+I                 6,868         1.93        425.7        25.86        5,710.6       0.40
Inferred              930         3.88        116.0        51.21        1,531.8       0.47
Total
Measured            8,444         1.98        538.1        20.00        5,429.7       0.34
Indicated           9,827         1.81        572.4        27.61        8,722.9       0.30
M+I                18,271         1.89      1,110.4        24.09       14,152.6       0.32
Inferred            1,194         3.71        142.5        49.24        1,891.2       0.38

                                MINERAL RESOURCE ESTIMATE AS AT OCT. 14, 2019
  
                         Tonnes       Copper       Copper         Lead         Lead         Zinc         Zinc
Classification           (000s)           (%)        (mlb)          (%)        (Mlb)          (%)        (Mlb)

Open pit
Measured                 7,062          0.34        53.51         0.14         22.1         3.02        470.1
Indicated                4,341          0.14        13.55         0.35         33.8         1.97        188.1
M+I                     11,403          0.27        67.05         0.22         55.9         2.62        658.2
Inferred                   264          0.06         0.35         0.56          3.3         0.62          3.6
Underground
Measured                 1,382           0.3          9.1         0.32          9.7         4.43        134.9
Indicated                5,486          0.42         51.2         0.32         38.2         3.53        427.3
M+I                      6,868           0.4         60.3         0.32         47.9         3.71        562.2
Inferred                   930          0.47          9.7         0.45          9.2         1.40         28.7
Total
Measured                 8,444          0.34         62.6         0.17         31.8         3.25        605.0
Indicated                9,827           0.3         64.7         0.33         72.0         2.84        615.4
M+I                     18,271          0.32        127.3         0.26        103.8         3.03      1,220.5
Inferred                 1,194          0.38         10.1         0.47         12.5         1.23         32.3

(1) Mineral resources which are not mineral reserves do not have demonstrated economic viability.

(2) The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, 
    taxation, socio-political, marketing or other relevant issues.

(3) The inferred mineral resource in this estimate has a lower level of confidence than that applied to an 
    indicated mineral resource and must not be converted to a mineral reserve. It is reasonably expected that 
    the majority of the inferred mineral resource could be upgraded to an indicated mineral resource with 
    continued exploration.

(4) The mineral resources in this technical report were estimated using the Canadian Institute of Mining, 
    Metallurgy and Petroleum (CIM), CIM Standards on Mineral Resources and Reserves, Definitions and Guidelines 
    prepared by the CIM standing committee on reserve definitions and adopted by the CIM council.

(5) The mineral resource estimate was based on metal prices of $1,375/ounce gold, $22.27/oz silver, $1.10/pound 
    zinc, $3.19/lb copper and $1.15/lb lead.

(6) Open-pit mineral resources were defined within the constraining pit design as per the 2018 feasibility 
    study.

(7) NSR cut-off values were established for each metallurgical type. Refer to the technical report for full 
    details.                                                                                                                                                                                                                             

Mining

The Back Forty mine plan presented in the PEA is based on mining the highest value material as soon as possible and treating this material through the process plants to maximize cash flow. This strategy is achieved by mining the mineralized material and either feeding the material directly to the process plant or stockpiling the material on site for processing later per a feed schedule based on optimal economics for the operation. This plan consists of a combined open-pit and underground mining operation. Open-pit mining will take place from year one to year five. Underground development will be initiated in year five and underground production mining will continue to year 11.

A series of grade blending stockpiles, by material type, will serve to prioritize the processing of higher-grade material and also manage fluctuations in process plant feed delivery from the two mining operations.

The Back Forty project area consists of very subdued terrain and topography. The area, topography and climate are amenable to the conventional open-pit mining operations proposed for the project. The open-pit mining operation will encompass a single open pit that will be mined with conventional mining equipment in three pushback phases. The underground mine will be developed beneath the open pit with a single decline access point located partway down the open-pit main access ramp.

Open-pit mining

The open-pit design is based on the 2018 feasibility study design. Minor modifications were made to standardize on five-metre-high benches with a quadruple bench configuration, resulting in a 20-metre vertical distance between catch berms.

Open-pit mining operations will be carried out by company personnel except for blasting operations. A blasting contractor will be used to supply the explosives, prepare the blasts, charge the holes, fire the blast and inspect the area postblast. The equipment fleet will consist of hydraulic excavators and wheel loaders, both with eight-cubic-metre buckets, and 90-tonne capacity haul trucks, plus track dozers, graders and support equipment.

A summary of the open-pit mining schedule is shown in the “Open-pit mining schedule” table.

                                OPEN-PIT MINING SCHEDULE

                                                           Year                  
Type                 Units    Total     Y-1       Y1       Y2       Y3       Y4      Y5

Overburden              kt    3,778   1,233    1,648      896        -        -       -  
Waste rock              kt   47,970   1,568    9,263   12,130   13,437   10,512   1,058
Total waste             kt   51,747   2,801   10,911   13,027   13,437   10,512   1,058
                             Process plant feed mining                       
Total sulphide          kt    8,815      73    2,236    1,647    1,406    2,678     776 
Total oxide             kt    1,317     126      353      327      157      309      45  
Total feed              kt   10,132     199    2,589    1,974    1,563    2,987     821 
Total material          kt   61,880   3,000   13,500   15,000   15,000   13,500   1,879
Strip ratio            w:o      5.1    14.1      4.2      6.6      8.6      3.5     1.3 
Feed to stockpiles      kt    6,961     199    1,995    1,609      575    1,953     629 

Underground mining

Extraction of the underground mineral resource will be achieved by a combination of mechanized cut and fill (CF) or longhole (LH) methods. CF mining is the dominant method, producing approximately 63 per cent of mined tonnes, with LH producing the remaining 37 per cent of tonnes. CF mining uses one of four stope sizes, and targets flatter-dipping material (dip less than 55 degrees). LH mining uses one of two stope size subsets and orientations (transverse or longitudinal). The weighted average direct mining cost is $33/tonne.

The underground mine begins construction and development in year five with commercial production achieved in year six. The production rate of the underground varies depending on development requirements, with a commercial production rate of 2,300 t/d, increasing to a maximum of 3,200 t/d in year seven.

The “Production by mining type by year (kt)” table shows the production tonnes from the Back Forty underground deposit by year and mining method.

                                  PRODUCTION BY MINING TYPE BY YEAR (KT)

Type            Year 5      Year 6      Year 7      Year 8      Year 9     Year 10     Year 11       Total

LH                   -           -           -           -         438         968         732       2,138
CF type 1            -          98         503         520         268           -           -       1,389
CF type 2          119         551         558         536         232           -           -       1,996
CF type 3            1          18          43          47          13           -           -         122
CF type 4            1          16          22          24           8           -           -          72
Total              122         683       1,126       1,126         959         968         732       5,717

Mineral processing and metallurgy

Oxide mineralized material and sulphide mineralized material (main, pinwheel and tuff material) will be treated through separate process plants.

The oxide mineralized material will be processed via a cyanidation leach circuit to produce dore. Depending on the grades of copper, zinc and lead, the sulphide mineralized material will be processed via two stages of flotation to produce concentrates; either a copper and zinc concentrate, or a lead and zinc concentrate.

Sulphide mineralized material will be processed on a campaign basis based on the main material types that have a similar metallurgical response. As such the design of the sulphide process plant is based on a flexible metallurgical flowsheet to process the main material types.

The oxide process plant has been designed for a throughput of 350 t/d. The overall flowsheet includes the following steps:

1. Three-stage crushing using an open circuit jaw crusher, open-circuit secondary cone crusher and closed-circuit tertiary cone crusher;
2. Grinding and classification;
3. Preleach thickening;
4. Cyanide leach;
5. Vacuum filtration of leaching tailings;
6. SART;
7. Carbon-in-column gold adsorption;
8. Carbon acid washing, desorption and recovery;
9. Smelting to produce dore;
10. Cyanide destruction of the final wash filtrate from the vacuum filtration step;
11. Tailings repulping and disposal to the tailings management facility (TMF).

The sulphide process plant has been designed for a nominal throughput of 2,800 t/d. The overall flowsheet includes the following steps:

1. Primary crushing;
2. Coarse mineralized material stockpile and reclaim;
3. Grinding and classification;
4. Gravity concentration;
5. Bulk rougher flotation to produce copper concentrate or lead concentrate depending on mineralized material campaign;
6. Zinc rougher flotation;
7. Bulk concentrate regrind (copper or lead concentrate);
8. Zinc concentrate regrind;
9. Bulk cleaner flotation, using three stages of cleaning (copper or lead concentrate);
10. Zinc cleaner flotation, using two stages of cleaning;
11. Bulk concentrate thickening and filtration (copper or lead concentrate);
12. Zinc concentrate thickening and filtration;
13. Tailings thickening and disposal in the common TMF.

Metal production

Metal production figures are summarized in the “Payable metal production” table.

             PAYABLE METAL PRODUCTION

Metal           Life of project    Average annual

Gold (K oz)                 692                58      
Zinc (M lb)                 801                67      
Copper (M lb)                86                 7       
Silver (K oz)             6,260               522      
Lead (M lb)                  26                 2       

A summary of the life of project revenue by metal, revenue by product and recovery by metal is included in the “Revenue by metal/product” table (calculated at base case metal prices).

                              REVENUE BY METAL/PRODUCT

Revenue by metal                       Revenue by product   Total recovery by metal

Metal    % of revenue              Product   % of revenue    Metal         Recovery 

  Gold            45%     Zinc concentrate            43%     Gold            74.3%   
  Zinc            38%   Copper concentrate            38%     Zinc            91.9%   
Copper            11%                 Dore            13%   Copper            81.2%   
Silver             5%     Lead concentrate             6%   Silver            67.2%   
  Lead             1%                Total           100%     Lead            83.7%    
 Total           100%                                                            

Concentrate marketing

In addition to a dore, the Back Forty project will produce zinc, copper and lead concentrates. The zinc concentrates will on average grade 53.9 per cent, the copper concentrates will on average grade 18.5 per cent (with high precious metals content), and the lead concentrate will on average grade 35 per cent. Over its 12-year life, the project will on average annually produce 66,200 tonnes of zinc concentrate, 18,600 tonnes of copper concentrate and 3,100 tonnes of lead concentrate. All concentrates are expected to be marketable. Studies are continuing to evaluate the optimal blends, destinations and transport options for Back Forty concentrates. The company believes that there are multiple attractive options for each of the concentrates.

Capital and operating costs

The capital estimate is summarized in the “Capital estimate summary by area” table by area and by discipline. All costs are based on Q3 2019 pricing. The estimate is deemed to have an accuracy of plus or minus 25 per cent.

      CAPITAL ESTIMATE SUMMARY BY AREA

Item                      Capital costs ($M)

Construction indirects                 11.4       
Oxide process plant                    24.1       
Sulphide process plant                 57.5       
TMF/waste rock facility                42.6       
Infrastructure                         34.2       
Mining                                 23.6       
EPCM                                   15.7       
Owner costs                            11.4       
Subtotal                              220.6       
Contingency (14%)                      29.9       
Total                                 250.4       

Sustaining capital

Capital expenditures incurred after year minus one are considered sustaining capital. Open-pit sustaining capital totals $45.9-million in expenditures primarily incurred between year one and year six. Initial capital costs for the underground mine are treated as sustaining capital costs for the Back Forty project since open-pit mining will be well under way by the time the underground mine is developed. Sustaining capital costs also include all costs associated with infrastructure, capital waste development (vertical and lateral), relevant equipment leasing costs (down payments, legal fees, origination costs and mobilization costs) and the paste backfill plant. Total underground sustaining capital costs are estimated at $98.9-million primarily incurred in year five and year six.

Other project sustaining capital costs include subsequent TMF stage raises over the LOM and process plant annual capital expenditures. Other project sustaining capital schedule over the life of mine is estimated at $69.3-million incurred between year 1 and year 5.

Mine closure costs, salvage value and rehabilitation costs are estimated at $75-million.

Operating costs

A summary of the life of project operating costs is outlined in the “Operating costs summary” table.

                     OPERATING COSTS SUMMARY

                      Life of project cost ($M)   Unit cost ($/t)

Gross revenue                           $2,095              $132       
Realization charges                        310                19       
NSR (base case)                          1,785               113       
                                                              
Open-pit mining                            178                11       
Underground mining                         288                18       
Process plant                              310                20       
G&A                                         46                 3        
Total site opex                            821                52       

Qualified persons

This news release has been reviewed and approved by the qualified persons noted in the “Qualified persons” table. The qualified persons have reviewed or verified all information for which they are individually responsible.

                            QUALIFIED PERSONS

Qualified person                      Employer   Professional designation

Neil Lincoln        Lincoln Metallurgical Inc.                       PEng                   
Andrew Bradfield   P&E Mining Consultants Inc.                       PEng                   
Yungang Wu         P&E Mining Consultants Inc.                       PGeo                   
David Penswick                  Gibsonian Inc.                       PEng                   

Each unit will comprise one common share of the company and one-half of one common share purchase warrant. Each warrant shall be exercisable to acquire one common share at a price of $1.30 per warrant share for a period of 24 months from the closing of the offering.

The agents will have an option to offer for sale up to an additional 3.2 million units at the offering price for additional gross proceeds of up to $3.04-million, which agents’ option is exercisable, in whole or in part, at any time up to 48 hours prior to the closing of the offering.

The company intends to use the net proceeds from the offering for exploration, development and general corporate purposes.

The securities to be issued under the offering will be offered by way of private placement in each of the provinces of Canada and such other jurisdictions as may be determined by the company, in each case, pursuant to applicable exemptions from the prospectus requirements under applicable securities laws.

The offering is scheduled to close on or about the week of Aug. 20, 2020, or such date as agreed upon between the company and the lead agent and is subject to certain conditions, including, but not limited to, the receipt of all necessary approvals including the approval of the exchange. The units to be issued under the offering will have a hold period of four months and one day from closing. The company may pay finders’ fees or commissions on a portion of the offering, subject to compliance with the policies of the exchange and applicable securities legislation.

  
   															    	LA PLATA DRILLING HIGHLIGHTS
  
 
Hole        From(m)   To(m)  Interval(m)     Au(g/t)  Ag(g/t)  Cu(%)  Zn(%)
CMLP-20-107  242.49  248.15         5.66        4.14   137.11   1.07   6.10 
Including    242.49  243.53         1.04        6.62   359.00   2.30  14.90 
Including    243.53  245.20         1.67        7.32   224.00   1.34   5.64 
CMLP-20-110  341.28  348.12         6.84       19.54   223.98  12.19   3.70 
Including    341.28  344.00         2.72       45.51   478.86  17.34   3.71 

True widths are dependent on uncertainties in the local strike and dip of the mineralization and are estimated to be between 76% and 83% of the drill intercept.

Infill drilling program

The infill and step-out drilling program has been implemented to upgrade and potentially expand resources of the La Plata project. Two drill rigs are currently active on the project with one rig currently starting to drill on the North Block in order to in-fill and potentially grow the La Plata resource.

The three diamond drill holes reported today successfully demonstrated the thickness and continuity of the La Plata VMS lenses, as well as potential expansion of the mineralized envelope of the South Block.

• Hole CMLP-20-107 was collared above the known VMS envelope and reported good values of precious and base metal grades within massive to semi-massive sulfides over a 5.66 meter intercept mineralised mostly by sphalerite.
• Hole CMLP-20-108, drilled for infill purposes in the South Block, demonstrated continuity of the mineralization with an intercept of 5.22 meters composed of both VMS and stockwork also dominated by sphalerite.
• Hole CMLP-20-110, in addition to intercepting a high-grade VMS zone within the South Body, cut a second intercept 10 meters below the main zone with 5.48 meters of mineralized stockwork.

The Company also reports that it continues to intercept visible massive and semi-massive sulfide mineralization as the ongoing drilling program continues, the core is currently being sent to the lab for analysis and will be released in due course. This current step-out drilling is targeting potential new zones that may lead to further extensions of the South Block mineralized envelope. Additional drill holes are planned to continue testing VMS mineralization outside of the known envelope and along strike of the La Mina area. This includes stepping out towards the north to further test the Guatuza target area which reported high grade values from the earlier trenching program. The 2020 exploration program on the La Plata property, as well as the El Roble drilling program are both fully funded from the highly profitable El Roble mining operation in Colombia.

 																																								 INFILL DRILL PROGRAM ASSAY RESULTS
 
                                                                                                       
Hole ID     Azimuth      Dip          Total        Intercept*
           (degree)  (degree)     Length(m)   From(m)   To(m) Interval(m)  Au(g/t)  Ag(g/t)  Cu(%)  Pb(%) Zn(%) 
CMLP-20-107    318        -57       254.97     242.49  248.15        5.66     4.14   137.11  1.07   2.20   6.10 
Including                                      242.49  243.53        1.04     6.62   359.00  2.30   4.33  14.90 
Including                                      243.53  245.20        1.67     7.32   224.00  1.34   1.37   5.64 
CMLP-20-108    285        -67       388.00     381.34  386.56        5.22     3.99    77.99  0.22   0.88   2.18 
Including                                      381.34  382.96        1.62     9.15   200.00  0.61   2.24   6.02 
CMLP-20-110    308        -74       370.00     341.28  348.12        6.84    19.54   223.98 12.19   0.33   3.70 
Including                                      341.28  344.00        2.72    45.51   478.86 17.34   0.55   3.71 
and                                            357.40  362.88        5.48     0.43     5.35  1.03   0.03   0.65 

True widths are dependent on uncertainties in the local strike and dip of the mineralization and are estimated to be between 76 per cent and 83 per ent of the drill intercept.

La Plata project

Gold-bearing sulphide mineralization at La Plata occurs as compositional banding composed of chalcopyrite, sphalerite and pyrite laminae with barite occurring as clasts and also as layers. The mineralised lenses have also been dislocated by a few faults and dolerite dikes cutting the body. The La Plata project is amongst the highest-grade gold-copper VMS deposits in which base and precious metal mineralization is interpreted to have formed as part of multiple volcanic episodes that created a stacked volcanic-exhalite hydrothermal sequence considered favorable for hosting additional VMS lenses. The recent drilling results in the southern portion of the deposit have encountered deeper mineralisation, and an extension of mineralisation to the north has been discovered by recent trenching results.

The La Plata independent Preliminary Economic Assessment (“PEA”) dated March 30th 2019, was prepared pursuant to National Instrument 43-101 (“NI 43-101”) and reports the La Plata inferred resources at 1.9 million tons at an average grade of 4.1 g/t Au, 49.4g/t silver, 3.3 per cent Cu, 4.5 per cent Zn, 0.6 per cent Pb as available on SEDAR.

The La Plata project consists of two concessions covering a total area of 2,300 hectares along its 9-kilometer length, which contains known mineralization in two VMS lenses and nine priority exploration targets.

The Company has a binding option agreement with a private Ecuadorean company to earn up to 75% in the La Plata project, of which the first option to acquire the initial 60% ownership has been exercised. Please refer to the Company’s MD&A for the year ended December 31, 2019 for further details.

Quality assurance and quality control

Before sampling, a centreline, representing bottom of hole (or a reference line when this is not known) is marked on the drill core. The core is cut and sampled, always sampling the right-hand side of the drill core. Samples are selected based on logged geological features, such as rock type, mineralization, alteration, veining etc. Sample length does not exceed 2.5 m nor is smaller than 20 cm. A total of 10% of the samples submitted are certified blanks and standards and field duplicates with, as a minimum, one blank submitted at the beginning of each sample batch. Certified standards are submitted at an average of 6% of the samples submitted. Field duplicates are taken at a rate of 1 in 20 of the samples taken. For all drill holes, analysis was completed by ALS Chemex in North Vancouver with sample preparation completed in Quito. The lab is accredited with International Standards ISO/IEC 17025:2005 and ISO 9001:2015. All major ALS Geochemistry analytical laboratories are accredited to ISO/IEC 17025:2005 for specific analytical procedures.

Qualified person

Dr. Michael Druecker, CPG, is a qualified person under NI 43-101 standards and independent of the company, is responsible for ensuring that the information contained in this news release is an accurate summary of the original reports and data provided to or developed by Atico Mining Corporation. Dr. Druecker has approved the scientific and technical content of this news release.