Pre-Feasibility Study On The San Francisco Mine

TORONTO - Magna Gold Corp. reported the results from the Pre-Feasibility Study (PFS) completed on its 100%-owned San Francisco mine located in Sonora, Mexico.

Arturo Bonillas, President and Chief Executive Officer, said, "We are extremely pleased with the outcome of this study, which validates our view of value and leverage for San Francisco when we acquired the mine earlier this year. This marks an important milestone for Magna as it provides us with a base case operating plan from which we can drive ongoing optimization, growth, and near-term value creation. We see tremendous potential to expand the mineral resource, locally and regionally, and also to increase production scale. In addition to successfully executing the PFS operating plan, our focus will now be on creating additional value through the advancement of a number of identified opportunities."

Pre-Feasibility Study (PFS) Highlights: Base case after-tax net present value ("NPV") of $80M using a $1,450/oz gold price and 5% discount rate; Assuming a spot gold price of $1,950 per ounce ("Spot Gold Price"), the project economics increase to an after-tax NPV of $231M using a 5% discount rate; Average annual gold production of 69 kozs per year over 2021 to 2027; Average all-in sustaining cash costs of $1,204 per gold ounce; And No major capital required for resumption of full mining operations.

The PFS contemplates a 16,875 tpd heap leach operation using existing processing capacity of 22,000 tpd. Ore placed on the existing leach pad will be sourced primarily from open pits over an initial mine life of eight years, supplemented by a small portion of underground ore. Magna is currently processing minerals from the La Chicharra pit, in addition to previously stockpiled material, and plans to initiate underground mining at the higher-grade lenses in the south wall of the San Francisco pit and also resume open pit mining in the San Francisco pit. Over the current mine life to 2028 outlined in the PFS, a total of 47.6 million tonnes at an average grade of 0.50 g/t containing 758 kozs gold will be mined and processed. Given the mine, processing plant and infrastructure are all existing at San Francisco, there are no significant capital investments required to realize the production outlined in the PFS.

Magna has calculated the impact to the NPV of San Francisco at various gold prices ranging between the price assumed for the PFS and the Spot Gold Price. Using the Spot Gold Price results in an NPV of $231 million, representing a 189% increase in the reported NPV in the PFS.

Magna has identified several near-term resource growth and operational expansion opportunities that have the potential to extend the mine life of San Francisco and further optimize the project parameters and economics outlined in the PFS.

Magna is currently implementing an aggressive exploration strategy in and around the existing open pits and at depth to increase mineral reserves and resources in 2021. Magna's exploration strategy also extends to various regional targets being evaluated as potential sources of satellite ore, such as the Mercedes property and La Vetatierra target, that could leverage existing equipment and infrastructure to provide incremental low-cost production in the near-term with minimal capital expenditures.

In addition, as part of the operational improvement plan that was implemented shortly after the acquisition of San Francisco, Magna is in the process of completing an extensive metallurgical test program and evaluating a potential upgrade of the crushing and leaching operation in order to increase capacity and improve metallurgical recoveries.

Magna's overall goal is to establish an operation capable of producing around 100,000 ounces per year for 10 years, providing for an approximate 45% increase from production levels outlined in the PFS.