Mandalay Resources Corporation announces new off-take agreement for
Costerfield and operational update

VANCOUVER, Jan. 19 /CNW/ - Mandalay Resources Corporation ("Mandalay" or the "Company") (TSX-V: MND) is pleased to announce that it has signed a 12 month extension to its concentrate off-take agreement with Zhongnan Antimony and Tungsten Trading Company for all antimony-gold concentrate produced at its recently acquired (see news release dated December 1, 2009) Costerfield mine in Australia. The extended contract improves the percentage of antimony paid to an average of 60% from 55% and improves the pricing for gold contained in antimony concentrate at gold prices over US$1000/ounce.

Brad Mills, Chief Executive Officer of Mandalay said, "We are very pleased to extend our off-take agreement with Zhongnan Antimony and Tungsten Trading Company. As well as ensuring a valued customer for our concentrate, the extension improves on the terms under which Mandalay will receive payment for our concentrate."

    
    Mandalay completes first month of Costerfield operations
    --------------------------------------------------------
    

The Company is also pleased to provide a production update on its newly acquired Costerfield gold mine in Australia. For the month of December, the mine, which is currently in ramp up mode, produced 1599 tonnes of ore versus a plan of 2095 tonnes. The concentrator processed 1833 tonnes of ore producing 41.1 tonnes of antimony and 172 ounces of gold contained in 74.8 tonnes of antimony concentrate and 30 ounces of gold in gravity concentrate. An additional 61 ounces of gold were produced from the tailings reprocessing plant versus a plan of 270 ounces. Both the underground mining operations and tailings operations are expected to reach full design (average 5000 tonnes per month ore from the mine and 250 ounces per month from the tailings) toward the end of the second quarter.

    
    Operational milestones reached in the ramp-up of production from
Costerfield include:

    -   In the mine, the decline to access four new, deeper levels of the
        Augusta lode has reached 259 metres or about 25% complete, and has
        opened the first of the new levels.
    -   In the concentrator, upgrades to the gravity circuit were completed
        which are anticipated to increase gravity gold recovery in the coming
        months.
    -   In the tailings reprocessing operation, the targeted daily throughput
        rate of approximately 500 tonnes per day was achieved toward the end
        of the month on several occasions. Operational improvements to the
        CIL (Carbon in Leach) circuit were designed, to be implemented in
        early Q1, 2010.
    

Brad Mills further commented "December production at Costerfield is significant because it marks the maiden production in Mandalay's evolution from an exploration company to a mid-tier producer. We are looking forward to the continued ramp up of both the underground mine and tailings operation and their achievement of operational design in the coming months."

    
    About Mandalay Resources Corporation:
    -------------------------------------
    

Mandalay Resources is a Canadian-based natural resource company with producing assets in Australia 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.

    
    Forward-looking statements:
    ---------------------------
    

This news release contains "forward-looking statements" within the meaning of applicable securities laws relating to the anticipated ramp-up of the Costerfield mine. 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, Mandalay's ability to secure additional financing, 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. 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.

THE TSX VENTURE EXCHANGE HAS NOT YET REVIEWED AND DOES NOT TAKE RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THE CONTENT OF THIS NEWS RELEASE.

%SEDAR: 00016244E

SOURCE Mandalay Resources Corporation

For further information: For further information: Bradford Mills, Chief Executive Officer, Greg DiTomaso, Investor Relations, Contact: (647) 436-2592

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Mandalay Resources Corporation

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