TORONTO, Jan. 7, 2013 /CNW/ - Mandalay Resources Corporation ("Mandalay" or the "Company") (TSX: MND) is pleased to provide an update on drilling results generated by the ongoing exploration program at its 100%-owned Cerro Bayo silver-gold mine in Aysen, Chile. Results presented here were acquired between the cutoff date for the Company's July 9, 2012 exploration update for Cerro Bayo and December 31, 2012. Highlights of these results include:

• During the period, Mandalay continued extensional and infill drilling on five targets and drilled eight new targets.
  
  
• Extensional drilling on the Delia SE, Dagny, Coyita, Trinidad and Marcela veins successfully extended the known mineralized zones by a collective 800 metres ("m") along strike. By the end of the year, only the Dagny vein extension had been fully delineated by drilling. Mineralization remains open, either at depth or along strike, on the other targets.
  
  
• Of the eight new targets tested, all contained either scattered intercepts of potentially economic grades and widths, as yet without demonstrated continuity (Coigues Este and Central, Gabriela, Gabriela Este, Josefina, Josefina Este) or no significant results (Caiquenes and Guanaco 1).
  
  
• In 2013, the Company plans to drill approximately 60,000 m at Cerro Bayo, continuing to test extensions of known mineralized zones at Coyita, Marcela, Delia SE veins, Fabiola, Trinidad and Yasna veins and testing several new targets in the district.

Brad Mills, CEO of Mandalay, commented, "In the second half of 2012, we continued to delineate mineralization in extensions of existing veins and to test new targets. We expect a new, independent NI 43-101 reserve and resource report for Cerro Bayo based on this work to be completed in the first quarter of 2013. We have developed an extensive inventory of new targets at Cerro Bayo that are ready for drilling and expect to test a significant portion of these in 2013."

Cerro Bayo drilling and assaying

During the reporting period, Mandalay drilled 28,627 m of core in 107 holes. Diamond core was logged and sampled by Mandalay geologists. Core samples, including blanks, standards, and duplicates, were assayed on-site at the Compa�ia Minera Cerro Bayo laboratory. The Cerro Bayo laboratory, which was audited in 2011 by SGS Lakefield Research Ltd., routinely sends check samples to ALS Laboratory (an ISO 9001:2008 and ISO/IEC 17025:2005 certified laboratory) in La Serena, Chile, following QA/QC practices established by Mandalay. See the March 18, 2012 technical report entitled "Technical Report on the Cerro Bayo Project, Chile", available on SEDAR (www.sedar.com), for a full description of the drilling, logging, assaying, and estimation processes.

Significant exploration results

Locations of the veins discussed in this report appear in Figure 1.

Dagny vein

Twenty-five holes (7,915 m) tested approximately 300 m of the Dagny vein extension strike length under Laguna Verde to the point where it intersects the Delia SE vein (see Table 1; click here for Figure 2: Dagny Long Section). Drill results indicate that potentially economic mineralization (minimum 2.4 m width of >120 g/t AgEq�) exists in an area measuring about 200 m horizontally by 70 m vertically. Evaluation of this mineralization will be included in the Company's year-end resource and reserve update.

Note 1: AgEq was calculated using the formula AgEq= Ag + (Au x 53.8) where Ag and Au are in grams per tonne ("g/t").

Table 1: Recent drill intercepts on the Dagny vein under Laguna Verde

Rounding may result in apparent interval differences.

Delia Southeast ("SE") vein

Eleven new holes (2,665 m) of infill and extensional drilling were completed at Delia SE where reinterpretation of the limits of mineralization and faulting has extended the strike length and down-dip extent of potentially economic mineralization (see Table 2; click here for Figure 3: Delia SE Long Section). Based on this information, reserves and resources for the Delia SE vein will be updated for year-end reporting.

Table 2: Recent drill intercepts on the Delia SE vein

Rounding may result in apparent interval differences.

Trinidad vein

Eight new holes (2,562 m) of infill and extensional drilling were completed at Trinidad where potentially economic mineralization was intersected over approximately 300 m of strike length (see Table 3; click here for Figure 4: Trinidad Long Section). Given its proximity to the Delia vein, this mineralization can likely be mined from the Delia NW ramp.

Table 3: Recent drill intercepts on the Trinidad vein

Rounding may result in apparent interval differences.

Coyita vein

Thirty-one new holes (5,379 m) have been drilled at Coyita where step-out drilling has extended potentially economic mineralization south approximately 200 m along strike over approximately 100 m of vertical extent (see Table 4; click here for Figure 5: Coyita Long Section).  These new intercepts will be included in the Company's year-end resource and reserves update.  Mineralization is open down dip and along strike to the south.

Table 4: Recent drill intercepts on the Coyita vein

Rounding may result in apparent interval differences.

Marcela vein

Extensional drilling continued at Marcela with eleven new holes (4,146 m) completed. Potentially economic mineralization continues north approximately 100 m along strike and over 50 m vertically down dip from the limits of previously Inferred Resource (see Table 5; click here for Figure 6: Marcela Long Section). In addition, the Marcela vein appears to have a significant, but poorly tested, root zone below existing mine workings that Mandalay is currently evaluating with further drilling.

Table 5: Recent drill intercepts on the Marcela vein

Rounding may result in apparent interval differences.
* DMA020 was terminated in vein due to technical problems and is being re-drilled to test the full extent of the vein.

Other exploration results

Core drilling continued to test new targets during the second half of 2012.  These holes generated mixed results (Table 6) and the new targets do not, as yet, have significant demonstrated volume or continuity of potentially economic mineralization.  Further work is continuing on these targets.

Table 6: Coig�es Central and Este, Caiquenes, Guanaco I Sur, Gabriela, Gabriela Este, Josefina and Josefina Este drill intercepts

Qualified Person:

Ronald Luethe, General Manager of Mandalay Chile Ltda., is an AIPG Certified Professional Geologist and a Qualified Person as defined by NI 43-101.  He has reviewed and approved the technical and scientific information on Cerro Bayo contained in this release.

About Mandalay Resources Corporation:

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

Forward-Looking Statements:

This news release contains "forward-looking statements" within the meaning of applicable securities laws, including statements regarding the Company's mineral Resources, mineral Reserves, planned exploration program, the timing and contents of an updated NI 43-101 report for Cerro Bayo and the potential economic viability of any identified mineralization. Readers are cautioned not to place undue reliance on forward-looking statements. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, changes in commodity prices and general market and economic conditions. The factors identified above are not intended to represent a complete list of the factors that could affect Mandalay. A description of additional risks that could result in actual results and developments differing from those contemplated by forward-looking statements in this news release can be found under the heading "Risk Factors" in Mandalay's annual information form dated March 30, 2012, a copy of which is available under Mandalay's profile at www.sedar.com. In addition, there can be no assurance that any current or future Inferred Resources that are discovered as a result of additional drilling will ever be upgraded to Proven or Probable Reserves. Although Mandalay has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. 

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SOURCE: Mandalay Resources Corporation