Mandalay Resources Corporation Announces Filing of Final Short Form Prospectus

Friday, Jul 30, 2010

Mandalay Resources
Corporation (TSX: MND) ("Mandalay" or the "Company") is pleased to announce
that it has filed a final short form prospectus with the securities
regulatory authorities in each of the provinces of Canada, except Québec, in
connection with a fully marketed offering (the
"Offering") to issue 82,142,857 subscription receipts (the "Subscription
Receipts") at a price of $0.28 per Subscription Receipt for aggregate gross
proceeds of $23 million on a best efforts basis with a syndicate of agents
co-led by GMP Securities L.P. and BMO Capital Markets (the "Agents"). Once
the Release Conditions (as defined below) have been satisfied, each
Subscription Receipt will be automatically exchanged, without payment of any
additional consideration and subject to adjustment, for one unit (each a
"Unit") comprised of one common share of the Company (each a "Unit Share")
and one common share purchase warrant (each a "Warrant"). Each Warrant will
be exchangeable into one common share of the Company (each a "Warrant
Share") at a price of $0.33 for a period of 24 months.

Upon the exchange of the Subscription Receipts for Units, the Agents will be
paid a commission equal to 5% of the gross proceeds received by the Company
from the Offering or $1.15 million. Of this amount, $100,000 will be paid in
cash, and the balance will be paid by Mandalay issuing 3,750,000 Units to
the Agents at a price of $0.28.

The Offering follows the signing of a purchase agreement with Coeur d'Alene
Mines Corporation ("Coeur") pursuant to which the Company agreed to purchase
(the "Acquisition") Coeur's wholly-owned subsidiary Compania Minera Cerro
Bayo Ltda. ("Minera Cerro Bayo"). Please refer to the Company's press
release dated May 4, 2010 for further details. The principal asset of Minera
Cerro Bayo is the Cerro Bayo silver-gold mine in Patagonia, Chile, currently
on care and maintenance. The Offering and the Acquisition are expected to
close on or about August 6, 2010.

Brad Mills, CEO of Mandalay said, "We are pleased to have filed our final
prospectus for the financing in connection with our acquisition and restart
of the Cerro Bayo mine. Following the completion of the transaction, the
Company plans to immediately restart mining operations at Cerro Bayo and
commence exploration drilling to extend the reserve life of the operation.
We expect initial commercial production to be achieved in the first quarter
of 2011, building up to an annualized production rate of approximately
25,000 ounces of gold and 3 million ounces of silver per year by the end of
2011."

The gross proceeds of the Offering, less an amount equal to the expenses of
the Agents in connection with the Offering (the "Escrowed Funds"), will be
held in escrow and released to the Company when the release conditions in
connection with the Offering (the "Release Conditions") have been satisfied.
If the Release Conditions are not satisfied on or before 5:00 p.m. (EDT) on
August 15, 2010, holders of Subscription Receipts will be entitled to a full
refund of the subscription price for their Subscription Receipts.

The Release Conditions include the satisfaction of the conditions precedent
contained in the purchase agreement dated May 1, 2010 between the Company
and Coeur (available under the profile of the Company at www.sedar.com), and
the receipt by the Company of the conditional approval of the Toronto Stock
Exchange (the "TSX") of the Offering and the listing of the underlying Unit
Shares and Warrants and the Warrant Shares. The Company has received the
conditional approval of the listing of the Unit Shares and Warrants and the
Warrant Shares from the TSX.

The proceeds from the Offering will be used to fund the purchase price of
Minera Cerro Bayo, Cerro Bayo mine development, exploration and plant
improvements, as well as general working capital. The final short form
prospectus is available on SEDAR under Mandalay's profile at www.sedar.com.

Source: Canada Wire