TMAC's Hope Bay Path to Production Continues on Track and on Budget

TORONTO, ON--(Marketwired - May 12, 2016) -  TMAC Resources Inc. (TSX: TMR) ("TMAC" or the "Company") filed its Condensed Interim Financial Statements and Management's Discussion & Analysis ("MD&A") for the period ended March 31, 2016, which documents can be found on the Company's website at www.tmacresources.com or on SEDAR at www.sedar.com. The highlights provided below are derived from these documents and should be read in conjunction with them.

Dr. Catharine Farrow, Chief Executive Officer of TMAC, stated, "We are pleased with our progress to advance the Hope Bay Project to production late in 2016. During the first quarter, we made excellent progress on the underground development at Doris and on our ore stockpile, completed foundation work required in advance of Mill Building erection, and continued our work with Gekko Systems of Australia to execute on the procurement, fabrication and factory testing of the Processing Plant for shipment and installation during the second half of 2016. We remain on track and on budget for both initiating the commissioning of the processing plant and the stockpiling of over 100,000 tonnes of high-grade (approximately 15 g/t) ore we plan to mine by the end of 2016."

FIRST QUARTER 2016 HIGHLIGHTS

Hope Bay Project

• Mining and mine development productivity and ore production were on target. Mining and mine development continued in the first quarter of 2016 with 58,100 tonnes of the planned 59,200 tonnes having been mined. Productivity averaged 0.4 metres per man-shift, exceeding the estimates of metres per man-shift published in the May 28, 2015 Prefeasibility Study (the "PFS"). Ore production was 12,800 tonnes at an estimated 13.3 grams of gold per tonne.
• Taking into account ore mined in late 2015 and ore mined by the previous operator, based on the PFS estimates for the material mined, the stockpile is estimated to contain 34,000 tonnes of ore at a grade of 13.6 grams of gold per tonne, or 14,900 ounces of gold of which 14,000 ounces of gold are recoverable at the estimated recovery rate of 94%.
• Manufacture of the processing plant (the "Processing Plant") by Gekko Systems Pty of Ballarat, Australia for delivery in 2016 was 84% complete at March 31, 2016, and is on budget and on schedule for delivery in the 2016 sealift.
• Construction of the building that will house the Processing Plant (the "Mill Building") progressed with the foundations for the main walls and reclaim walls being completed. The Mill Building steel is on site and erection commenced in late April 2016.
• As part of the Nunavut Impact Review Board ("NIRB") and Nunavut Water Board regulatory review process of the application to amend the Doris permits, including the Doris Project Certificate and the Nunavut Water Board Doris Water License (the "Doris Permit Amendments"), TMAC received technical comments from various Federal and Territorial government agencies and the Kitikmeot Inuit Association (collectively the "Reviewing Parties"). Responses to these comments were completed by TMAC and filed. A public hearing was held under the NIRB process with the Reviewing Parties and the general public from April 12 to 14, 2016. All outstanding issues were resolved, the file was closed and TMAC now awaits NIRB's recommendation to the Minister of Indigenous and Northern Affairs Canada ("INAC"). Once the NIRB process is completed, the Nunavut Water Board final review process will commence and includes a public hearing and approval from the Minister of INAC.

Financial and Corporate

• All conditions precedent required to draw down the first tranche of the Debt Facility were satisfied and a drawdown of US$50,000,000 was completed. US$38,000,000 was converted to Canadian dollars at a foreign exchange rate of C$1.3904/US$1 and US$12,000,000 was retained to cover all non-Canadian dollar expenditures remaining in 2016.
• A private placement (the "Flow-Through Financing") of 827,206 flow-through Common Shares of TMAC (the "Flow-Through Common Shares") was completed at a price of $10.88 per Flow-Through Common Share for gross proceeds of $9,000,000.

Statement of Profit or Loss
The net loss and comprehensive loss for the three months ended March 31, 2016 was $205,000, compared with $2,128,000 for the three months ended March 31, 2015.

Cash and Liquidity
At March 31, 2016, TMAC had $84 million of cash and cash equivalents, excluding restricted cash of $29 million, comprising a $10 million minimum cash balance in a segregated account in accordance with the Debt Facility requirements and $19 million invested in guaranteed investment certificates set aside as collateral for the letters of credit (the "Letters of Credit") that support environmental reclamation bonding and provide security for compliance under various agreements with indigenous organizations. The existing cash on hand and the US$70 million remaining to be drawn on the Debt Facility provide for an approximate $40 million cushion for the Company to achieve commercial production at the Hope Bay Project, beginning with Doris, in the first quarter of 2017.

2016 OUTLOOK

Hope Bay

• Complete fabrication of the Processing Plant.
• Deliver the Processing Plant and mobile equipment in the 2016 sealift.
• Complete erection of the Mill Building and the installation of associated services.
• Complete the installation of and initiate commissioning of the Processing Plant.
• Complete preparation of the tailings impoundment area to receive tailings.
• Stockpile by December 31, 2016, 110,700 tonnes of ore with an estimated 55,600 ounces of contained gold that, at a 94% recovery rate, is 52,300 ounces of recoverable gold.
• Obtain the Doris Permit Amendments.
• Complete and submit the draft environmental impact statement on Madrid and Boston.
• Explore for additional ounces at Doris Connector and below the dyke at Doris North.
• Complete SkyTEM Mag/EM and CGG Gravity airborne geophysical surveys.

Elu

• Complete SkyTEM Mag/EM airborne geophysical surveys.

Financial and Corporate

• Draw down the second tranche of funds remaining under the Debt Facility.

THE HOPE BAY PROJECT'S PATH TO PRODUCTION OVERVIEW

With the $9 million of funds raised from the Flow-Through Financing, the total estimated cash outflows, including working capital, for the combined 2015 and 2016 years for the Path to Production plan has increased from $325 million to $334 million. As at March 31, 2016, TMAC had incurred $201 million of the planned $334 million of cash outflows under the Path to Production plan. The cash outflows to date are in line with the Path to Production plan in terms of timing and the amount of cash outflows. The expenditures included in the Path to Production are based on the two calendar years commencing January 1, 2015. Accordingly, by the end of March 2016, TMAC is 15 months into those planned 24 months of expenditures, or 63% of the way, and envisions achieving commercial production during the first quarter of 2017.

Table 1 shows the expected cash outflows over the two year period 2015-2016 detailed in the Path to Production plan and the expenditures to date. TMAC is now approximately two thirds of the way through the Doris development period and has incurred 60% of the planned expenditures.

The Path to Production envisions TMAC having a high-grade gold ore stockpile on surface at December 31, 2016 totalling 110,700 tonnes containing 55,600 ounces of gold (at 15.2 g/t) to provide the Processing Plant with significant high-grade feed at start up, a smooth production ramp up to 1,000 tonnes per day in 2017 and to 2,000 tonnes per day in 2018. 

Table 2 sets forth the production achieved to March 31, 2016 compared with the expected ore tonnes on the stockpile as per the Path to Production plan.

ADDITIONAL MATERIAL

Following is a link to a video showing the Mill Building construction site as it appeared on Monday, May 9, 2016 to give readers an aerial view of TMAC's progress to date.

https://www.youtube.com/watch?v=_5VYTetgwOw&feature=youtu.be

We encourage our readers to review TMAC's first quarter 2016 MD&A as well as it contains a number of photos of both the site construction and the Processing Plant fabrication, as well as figures relating to our exploration activities.

ANNUAL GENERAL MEETING OF SHAREHOLDERS

TMAC will host its annual general meeting of shareholders on June 21, 2016 at 4:30 pm Eastern Time in the TSN Theatre at The Hockey Hall of Fame, 30 Yonge Street, Toronto, Ontario.

ABOUT TMAC

TMAC holds a 100% interest in the Hope Bay Project located in Nunavut, Canada. TMAC is a fully financed, gold development company. During 2015, TMAC significantly de-risked the Hope Bay Project financially by securing equity and debt financing for gross proceeds of over $350 million providing full funding for the Company to achieve its Path to Production plan, beginning with the Doris Mine, by the end of 2016. The Company has a board of directors with depth of experience and market credibility and an exploration and development team with an extensive track record of developing high grade, profitable underground mines.

FORWARD-LOOKING INFORMATION

This release contains "forward-looking information" within the meaning of applicable securities laws that is intended to be covered by the safe harbours created by those laws. "Forward-looking information" includes statements that use forward-looking terminology such as "may", "will", "expect", "anticipate", "believe", "continue", "potential" or the negative thereof or other variations thereof or comparable terminology. Such forward-looking information includes, without limitation, bringing the Hope Bay Project into production, beginning with the timing of the erection and completion of the Mill Building, fabrication, delivery and construction of the Processing Plant, the commissioning of the Processing Plant at Doris by the end of 2016, the availability of funds under the Debt Facility, and that the cash on hand and drawdowns under the Debt Facility will be sufficient to fully fund the Hope Bay Project and the objectives of the exploration program.

Forward-looking information is not a guarantee of future performance and is based upon a number of estimates and assumptions of management at the date the statements are made, including among other things, assumptions about: the ability meet the conditions precedent to drawdowns under the Debt Facility; the ability to raise any additional capital needed to advance the development of the Hope Bay Project to production; future prices of gold and other metal prices; the geology of the Hope Bay Project being as described in the Company's PFS technical report for the Hope Bay Project filed on SEDAR; accuracy of the mineral resource and mineral reserve estimates in the PFS; the metallurgical characteristics of the deposit being suitable for the processing plant; the successful and timely delivery, installation and operation of the Processing Plant; favourable weather conditions for planned sealifts and construction activities; production costs being as estimated in the PFS; accuracy of budgeted exploration and development costs and expenditures, including to complete development of the infrastructure at the Hope Bay Project; the price of other commodities such as fuel; future currency exchange rates and interest rates; favourable operating conditions; political and regulatory stability; receipt of governmental approvals and permits and all necessary third party financing on favourable terms; obtaining renewals for existing licences and permits and obtaining all other required licences and permits; sustained labour stability; stability in financial and capital goods markets; availability of equipment; positive relations with the Kitikmeot Inuit Association and Nunavut Tunngavik Inc. and other local groups; and the Company's ability to operate in the harsh northern Canadian climate. Furthermore, such forward-looking information involves a variety of known and unknown risks, uncertainties and other factors which may cause the actual plans, intentions, activities, results, performance or achievements of the Company to be materially different from any future plans, intentions, activities, results, performance or achievements expressed or implied by such forward-looking information. See "Risk Factors" in the Company's AIF dated February 25, 2016 filed on SEDAR at www.sedar.com for a discussion of these risks.

The Company cautions that the foregoing lists of important assumptions and factors are not exhaustive. Other events or circumstances could cause actual results to differ materially from those estimated or projected and expressed in, or implied by, the forward-looking information contained herein. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, investors should not place undue reliance on forward-looking information.

SOURCE TMAC Resources Inc.