TORONTO, Sept. 10, 2014 /CNW/ – Mandalay Resources Corporation (“Mandalay“) (TSX: MND) and Elgin Mining Inc. (“Elgin”) (TSX: ELG) are pleased to
announce the completion of the acquisition of Elgin by Mandalay by way
of a court-approved plan of arrangement (the “Arrangement“).

Mr. Brad Mills, Chief Executive Officer of Mandalay, commented, “I am
pleased to announce that we have successfully closed the Elgin
transaction as planned, adding Elgin’s Björkdal gold mine in Sweden as
Mandalay’s third producing mine in a top mining jurisdiction. We
welcome all of the Elgin and Björkdal staff who are joining Mandalay
and have worked hard to complete this transaction. We currently expect
that the Björkdal mine will produce 8,000 to 10,000 ounces of gold
during the fourth quarter of the year, which increases our overall 2014
Mandalay production guidance to a range of 138,000 to 148,000 ounces of
gold equivalent.”

Mr. Mills continued, “Our plans for the Björkdal mine will immediately
focus on refining the life of mine resource and reserve model for the
open pit and underground mines, improving the grade of production of
both mines based upon this more granular model, evaluating and adopting
new milling approaches in the plant to improve gold recovery and expand
plant capacity. We will also evaluate all of the exploration potential
on the property and commence an exploration program to expand reserves.
We anticipate that we will start to see results from these efforts
within the next three to six months. The first milestone will be the
release of a new independent Technical Reserve and Resource Report
which Mandalay has commissioned on the property.”

Mr. Mills concluded, “In connection with our acquisition of Elgin,
Mandalay has reviewed its property portfolio and decided to sell two
assets which are now deemed non-core to our future plans. These assets
are the Lupin gold mine, in Nunavut, Canada, and the La Quebrada
copper-silver project in Chile.”

The Plan of Arrangement

Pursuant to the Arrangement, Mandalay acquired each outstanding Elgin
common share (each, an “Elgin Share“) in exchange for CDN$0.37 in cash (the “Cash Consideration“) or 0.4111 of a Mandalay common share (each, a “Mandalay Share“) (the “Share Consideration“), subject to pro-ration if the aggregate Cash Consideration would
exceed CDN$27 million or the aggregate Share Consideration would exceed
50 million Mandalay Shares.

Based on valid elections received prior to the election deadline and
deemed elections, shareholders of Elgin (the “Elgin Shareholders“) elected to receive:

• the Share Consideration in respect of 188,980,537 Elgin Shares (which,
  at 0.4111 of a Mandalay Share per Elgin Share, would result in
  aggregate Share Consideration of approximately 77.7 million Mandalay
  Shares); and

• the Cash Consideration in respect of 4,461,519 Elgin Shares (which, at
  CDN$0.37 per Elgin Share, would result in aggregate Cash Consideration
  of approximately CDN$1.7 million).

Since the aggregate Share Consideration would otherwise exceed 50
million Mandalay Shares, all elections (including deemed elections)
have been pro-rated in the manner described in the management
information circular dated July 25, 2014 prepared by Elgin in
connection with the Arrangement. This has resulted in the number of
Mandalay Shares that each Elgin Shareholder exchanged for the Share
Consideration being reduced by applying an approximate 64.358%
pro-ration factor.

For illustrative purposes only, and using the example of an individual
holding 1,000 Elgin Shares:

• if such Elgin Shareholder elected to receive Cash Consideration in
  respect of all of their Elgin Shares held, the Elgin Shareholder would
  be entitled to receive CDN$370 (being CDN$0.37 for each Elgin Share);
  or

• if such Elgin Shareholder elected (or was deemed to have elected) to
  receive Share Consideration in respect of all of their Elgin Shares,
  the Elgin Shareholder would be entitled to receive approximately 264
  Mandalay Shares in consideration for a portion of their Elgin Shares
  and CDN$131.88 cash in consideration for the remaining portion of the
  Elgin Shares.

Any questions or requests for assistance in surrendering certificates
that formerly represented Elgin Shares in order to receive the
Arrangement consideration may be directed to the depository,
Computershare Investor Services Inc., by telephone at 1-800-564-6253
toll-free in North America, 1-514-982-7555 outside of North America or
by e-mail at corporateactions@computershare.com.

De-listing of the Elgin Shares from the Toronto Stock Exchange (“TSX”)
is expected to occur shortly. Concurrent with the delisting of the
Elgin Shares, Elgin will apply to all applicable Canadian securities
regulatory authorities in order to cease to be a reporting issuer.

About Mandalay Resources Corporation

Mandalay Resources is a Canadian-based natural resource company with
producing assets in Australia and producing and development projects in
Chile. Mandalay 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 securities legislation and which are based on the expectations,
estimates and projections of management of Mandalay as of the date of
this news release unless otherwise stated, including statements
regarding Mandalay’s estimates of future production, its plans for the
Björkdal mine and its planned sale of the Lupin and La Quebrada
properties. 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 28, 2014, a
copy of which is available under Mandalay’s profile at www.sedar.com.
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.

SOURCE Mandalay Resources Corporation

Image with caption: “Mandalay Resources Corporation (CNW Group/Mandalay Resources Corporation)”. Image available at: http://photos.newswire.ca/images/download/20140910_C8885_PHOTO_EN_42734.jpg

Image with caption: “Elgin Mining Inc. (CNW Group/Mandalay Resources Corporation)”. Image available at: http://photos.newswire.ca/images/download/20140910_C8885_PHOTO_EN_42736.jpg