The transaction will add Elgin’s Björkdal gold mine in Sweden as Mandalay’s third producing and positive cash flow generating asset. Björkdal is a safe, highly productive, mechanized underground and open pit mine with a highly automated processing plant producing gravity gold concentrate and flotation gold concentrate. Elgin’s full-year production guidance for Björkdal in 2014 is 44,000 to 49,000 ounces of gold at USD 886 to USD 982/oz cash cost and USD 1,088 to USD 1,207/oz all-in cost. With Björkdal’s forecast production for the second half of 2014 added to Mandalay’s existing production guidance, Mandalay’s total gold equivalent production guidance for 2014 increases to 152,000 to 167,000 gold equivalent ounces.

Brad Mills, CEO of Mandalay, commented, "Mandalay’s core strategy is to acquire cash flowing or near cash flowing assets in geopolitically stable and mining-supportive jurisdictions that have excellent exploration potential and where Mandalay’s operational expertise can make a material difference to the performance of the asset in the short to medium-term. The Björkdal mine is an ideal fit for Mandalay. Elgin has already identified and initiated optimization strategies for Björkdal mine. These, coupled with Mandalay’s mine design and execution experience, will insure the operational strategies being deployed at Björkdal achieve maximum impact. We believe that the application of Mandalay’s financial and technical resources can help the Björkdal mine significantly grow production and materially reduce costs per ounce in the coming 12 to 36 months. We expect that with this growth, this transaction will be highly accretive to Mandalay shareholders on an EBITDA, earnings per share, net asset value, free cash flow per share, and reserves and resources per share basis from 2015 onwards at current metal prices."

Patrick Downey, CEO of Elgin stated, "The combination of Mandalay and Elgin will provide our shareholders with the opportunity to gain exposure to a growing and profitable producer with operations in politically and fiscally stable jurisdictions, while still providing exposure to the upside at Björkdal. Mandalay has an excellent track record of growing and optimizing mine operations and producing value for their shareholders. With their balance sheet and technical expertise, I believe that the combined company will maximize the value of Björkdal for the benefit of both the Mandalay and Elgin shareholders, and I look forward to working with the Mandalay team."