Mandalay Resources Announces Purchase of The Challacollo Silver Project in Northern Chile From Silver Standard Resources - Seite 2

Mandalay's advisors for the transaction include Goodmans LLP (Canadian legal counsel), Philippi, Yrarrázaval, Pulido & Brunner (Chilean legal counsel) and Roscoe Postle Associates Inc. (technical). Mandalay also completed its own internal geology and exploration review of the Project. As part of its engagement, RPA is preparing a NI 43-101-compliant Technical Report on the Project, which will be filed on http://www.sedar.com and Mandalay's website http://www.mandalayresources.com within 45 days of this press release.

About the Challacollo Property:

Challacollo is an epithermal silver deposit located in Region I, Northern Chile. It is centered approximately 130 kilometres ("km") southeast of the major port city of Iquique. The Pan-American Highway passes 30 km west of the property. Power transmission lines are located 15-30 km from the property, in part to service nearby mines such as Collahuasi and Quebrada Blanca. The Project includes water rights.

The Project is situated within a metallogenic belt which parallels the northern Chilean coastline that includes the Cerro Colorado porphyry copper deposit and the El Peñon epithermal gold deposit. Silver mineralization on the property is hosted in the Cretaceous Challacollo volcanic complex of intermediate to silicic volcanic rocks and associated sedimentary rocks that dip gently to the southeast. Mineralization is contained in a system of northeast- to north-trending epithermal quartz-carbonate-barite veins that have been oxidized to a depth of at least 250 metres ("m"). The largest of these veins is the Lolón Vein, which is more than 3.5 km in length and contains the entire estimated Mineral Resource. The width of the vein exposed in workings and drill holes varies from 2 m to 30 m and has an average width of 9 m within the drilled length of the vein. Exploration potential exists for strike extensions of the Lolón Vein in both directions, as well as for similar, subparallel veins. Veins cropping out to the northwest of the Lolón Vein are interpreted to represent deeper exposures of the tilted terrane, possibly below favourable mineralization-forming depths; veins cropping out to the southeast are interpreted to represent shallower exposures, possibly above favourable mineralization-forming depths. These latter veins have not been drilled previously and represent excellent targets for exploration.