Leagold Closes and Draws New Long-Term Debt and Commences Los Filos Expansion

(All amounts in US dollars, unless otherwise indicated)

VANCOUVER, June 25, 2019 /PRNewswire/ - Leagold Mining Corporation (TSX:LMC; OTCQX:LMCNF) (Leagold or the Company) announces it has completed the previously announced debt refinancing with a syndicate of lenders that includes a $200 million term loan (the Term Loan) and a $200 million revolving credit facility (the RCF, and collectively with the Term Loan, the New Loan Facilities). These loans have been used to replace $238 million of existing short-term debt and will provide new financing for the Company's growth through the phased expansion of the Los Filos mine complex and the construction of the Santa Luz project.

Neil Woodyer, CEO, stated "We are very pleased to finalize this debt financing and we appreciate the strong support from our three Joint Lead Arrangers, Societe Generale, Investec Bank plc, and ING Capital LLC and the new syndicate members. The combination of our new 5.5-year amortizing Term Loan and 5.5-year bullet RCF will provide a cost-effective and flexible structure to finance our growth. With long-term funding in place, we will now launch our phased development plan that positions Leagold to become a 600,000 to 700,000 ounce per year gold producer. 

"We wish to thank Orion Mine Finance, who are no longer a lender to us but remain a significant equity investor, for their continued support of our vision and growth plans."

Phased Development Plan

Following completion of the Los Filos Expansion Feasibility Study in March 2019, Leagold continued construction planning and optimized the sequence of the major expansion projects. Leagold decided to proceed with the Los Filos expansion, when the refinancing closes, and to commence construction of the Santa Luz project in Q1 2021 with the timeline as detailed in Figure 1. In creating the phased development plan, consideration was also given to ensuring the plan was practical and well within Leagold's organizational capacity.

Phased implementation: The expansion of the Los Filos mine complex has been organized into three distinct projects which will have staggered start dates. The CIL plant construction is now scheduled to begin in mid-2020, after significant progress with accessing ore at both Bermejal underground and Guadalupe open pit is achieved. The development of Santa Luz is scheduled for Q1 2021, after substantial completion of all elements of the Los Filos expansion.

The phased development plan results in a smoothed capital expenditure profile that benefits from increased internal financing.

Figure 1: Phased Development Plan Timeline

Contractor development of Bermejal Underground: Building on its experience from using a contractor for the 1,330-metre access ramp at the Bermejal underground, Leagold plans to use an experienced contractor for Bermejal underground development.

EPCM contracting for Los Filos CIL plant: Leagold anticipates an EPCM-based approach for the construction of the Los Filos CIL plant with a highly experienced engineering and project management group. 

Revenue protection: As the Los Filos expansion is scheduled to take approximately 2.5 years, Leagold has determined it is financially prudent to secure a portion of its revenue from gold sales over this period. Together with the completion of the New Loan Facilities, Leagold has implemented a gold revenue protection program of 25,000 ounces per quarter over a three-year period from October 2019 through to September 2022, which represents approximately 20% of group gold production over this period.  This program includes i) 135,000 ounces in a collar structure, protecting a floor price of $1,325/oz with full price participation up to an average ceiling price of $1,430/oz and ii) 165,000 ounces in a flat-forward structure at an average gold price of $1,350/oz. These revenue protection structures mature evenly on a monthly basis from October 2019 to September 2022.

EPCM contracting for Santa Luz plant: Leagold anticipates using an EPCM-based approach for several components of the Santa Luz plant construction.

In addition to its current growth projects, Leagold plans to continue near-mine exploration programs designed to increase mineral resources and extend mine lives.

About Leagold Mining Corporation

Leagold is a mid-tier gold producer with a focus on opportunities in Latin America. The Company is based in Vancouver, Canada and owns four operating gold mines in Mexico and Brazil, along with a near-term gold mine restart project in Brazil and an expansion opportunity at the Los Filos mine complex in Mexico. Leagold is listed on the TSX under the trading symbol "LMC" and trades on the OTCQX market as "LMCNF".

Cautionary Note Regarding Forward Looking Statements

This news release contains "forward looking information" or "forward looking statements" within the meaning of applicable securities legislation. Forward-looking information and forward-looking statements include, but are not limited to, statements with respect to the expected use of funds from the New Loan Facilities, benefits to be derived from the Phased Development Plan, the proposed implementation of the Phased Development Plan, expected timing for commencing and completing the Los Filos Expansion projects and construction at Santa Luz and statements related to the use of contractors to complete its development projects. Generally, these forward looking information and forward looking statements can be identified by the use of forward looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", "will continue" or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward looking information and forward looking statements, while based on management's best estimates and assumptions, are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Leagold to be materially different from those expressed or implied by such forward-looking information or forward looking statements, including but not limited to: risks related to international operations; risks related to general economic conditions and credit availability; changes in project parameters as plans continue to be refined; fluctuations in prices of metals including gold; fluctuations in foreign currency exchange rates, increases in market prices of mining consumables, possible variations in mineral reserves, grade or recovery rates; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes, title disputes, claims and limitations on insurance coverage and other risks of the mining industry; delays in obtaining governmental approvals or financing or in the completion of development or construction activities, changes in national and local government regulation of mining operations, tax rules and regulations, and political and economic developments in countries in which the Company operates, actual resolutions of legal and tax matters, as well as those factors discussed in the section entitled "Description of the Business – Risk Factors" in Leagold's most recent AIF available on SEDAR at www.sedar.com.

Although Leagold has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information and forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information or statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information or statements. The Company has and continues to disclose in its Management's Discussion and Analysis and other publicly filed documents, changes to material factors or assumptions underlying the forward-looking information and forward-looking statements and to the validity of the information, in the period the changes occur. The forward-looking statements and forward-looking information are made as of the date hereof and Leagold disclaims any obligation to update any such factors or to publicly announce the result of any revisions to any of the forward-looking statements or forward-looking information contained herein to reflect future results. Accordingly, readers should not place undue reliance on forward-looking statements and information.

SOURCE Leagold Mining Corporation

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