Battle North Gold Delivers Feasibility Study Results of 50% After-Tax IRR, C$305 Million After-Tax NPV5% and C$419 Million Free Cash Flow for the Bateman Gold Project

Press Release

TORONTO, Oct. 21, 2020 – Battle North Gold Corporation (TSX: BNAU) (OTCQX: BNAUF) (“Battle North” or the “Company”) announces a positive Feasibility Study¹ for the shovel-ready Bateman Gold Project (the “Project”). All references to dollars herein are in Canadian dollars (“$”) unless otherwise specified. Numbers in tables and diagrams may not add due to rounding.

Bateman Gold Project Feasibility Study Highlights:

Table 1: Economic analysis summary (estimates)

Table 2: LOM plan summary (Base Case estimates)

Table 3: LOM Capital and Operating Costs Summary (Base Case estimates)

Key Takeaways from the Feasibility Study:

• The Feasibility Study LOM of an estimated 8.2 years is 2 years longer than the 2019 PEA¹⁰ Conceptual LOM.
• Pre-CP ramp-up period of an estimated 21 months to Commercial Production and anticipated Initial Production commencing an estimated 7 months after construction start, are comparable to the 2019 PEA¹⁰ ramp-up timelines.
• Initial Capital (Pre-CP) of an estimated $109.3 million (inclusive of 10% contingency) and Sustaining Capital (CP) of an estimated $27.0 million per CP year are comparable to the 2019 PEA¹⁰ Initial Capital ($101.2 million) and Sustaining Capital ($30.0 million/CP year) estimates, respectively.
• Early operating cash flow estimate of $34.2 million during the forecast Pre-CP period and application of the Company’s tax loss pools over the LOM plan help drive the estimated after-tax IRR, after-tax NPV_5%, LOM FCF and lower the Projected Funding Requirement.
• The Feasibility Study benefits from more than $770 million in sunk capital including a fully-operational state-of-the-art 1,800 tpd mill, a 730-metre deep shaft and hoisting facility, an existing tailings management facility (“TMF”), and more than 14,000 metres (“m”) of developed mine workings.
• Excess mill capacity enables the potential to process incremental tonnes from the F2 Gold Deposit along strike and at depth, and at the emerging McFinley and Pen Zone targets.

Management Presentation Conference Call and Webcast Details:

• The Company will be hosting a conference call and webcast to discuss the Feasibility Study today, October 21, 2020 at 8:30 am ET. For North America, please dial toll free: +1 888-390-0605. International: +1 416-764-8609. For the webcast, please visit the following WEBCAST LINK.

CEO Comment

Battle North President and CEO George Ogilvie, P.Eng., stated, “I am very pleased to deliver the maiden Feasibility Study for our shovel-ready Bateman Gold Project, which demonstrates the Project’s robust commercial viability as an operating mine in the prestigious Red Lake Gold Mining camp. At a US$1,525/oz gold price assumption, the Feasibility Study estimates LOM Free Cash Flow generation at $419 million, a 50.3% after-tax IRR, a $305 million after-tax NPV_5%, C1 Cash Costs and AISC of US$613/oz and US$865/oz, respectively, during the Commercial Production period. There are few stand-alone projects in the world that are as substantially de-risked, with significant infrastructure, with a short timeline to Initial Production, in a safe jurisdiction, as the Bateman Gold Project. The Feasibility Study reflects a purposeful focus on rigor and prudence as the foundation for the prospective construction and operation of the Project. We believe the Feasibility Study is a well-designed, comprehensive plan assembled under the direction of a management team and consultants with successful and extensive underground mine operations experience.”

“I am proud of the Battle North team and the work that has been completed over the last several years to get the Project to this stage. Subject to Board review and approval, we will be tasked with initiating construction and bringing the Project to Commercial Production. We have commenced the development planning for the Bateman Gold Project, including a full risk assessment. We have strategies in place to mitigate ramp-up risks including targeting capital development of at least 9 months ahead of the mine plan, infill drilling the F2 Gold Deposit to 10 m drill centres, creating ramp access to increase shaft capacity, and installing an ammonia reactor in the wastewater treatment plant before operating the mill. Most importantly, we have an operating team with extensive experience in building, operating and turning around underground mines; the collective operating experience of the Battle North team will be a significant factor in ultimately achieving a successful ramp-up to Commercial Production.”

“We currently have $55 million of cash on our balance sheet that is dedicated to fund the development capital of the Project. We are also in advanced discussions with lenders to secure a debt facility to fund the remaining development capital and achieve a fully-funded Project.”

“Battle North is now well-positioned for near-term and long-term success: the Bateman Gold Project is poised for prospective development to Commercial Production, the Company is on track to deliver NI 43-101 Mineral Resource estimates at the McFinley and Pen Zones within the next six months, and we have commenced a regional exploration program of our Red Lake Properties. We are very pleased to have reached this important milestone for our shareholders, our employees, the community of Red Lake, and all of our other stakeholders.”

Underground Development: The Key to Successful Mining

The Project benefits from more than 14,000 m of extensive developed mine workings and related site infrastructure. The Project has an operational shaft down to 730 m below the surface, with loading pockets located at the 337 m and 685 m Levels. Most of the existing underground development, including lateral development, a partially completed ramp system, waste/ore passes, and ventilation raises, are located between 122 m and 305 m Levels.

The Feasibility Study contemplates an estimated 36,657 m of underground waste development (28,123 m lateral, 6,839 m ramp, and 1,695 m vertical) throughout the LOM plan. The increase in underground development metres compared to the 2019 PEA¹⁰ is attributed to higher estimated ore tonnes in the Feasibility Study LOM mine plan and additional lateral development to access the stopes as a result of additional engineering. The Feasibility Study contemplates an estimated 8,562 m of underground waste development, including raises for ventilation and a ramp to surface, for the 21-month Pre-CP period. The Pre-CP underground development metres are anticipated to provide access to an estimated 40 to 50 working stopes and up to 9 months of development flexibility ahead of mining, before Commercial Production is forecast to be declared. The Feasibility Study contemplates the use of contractors during the Pre-CP development with a transition to an owner-operated team during CP. The Feasibility Study assumes peak development rates of 24 m (or ~6 rounds) per day, with an average of 18.2 m (~5 rounds) per day LOM. Please see Diagram 1 for LOM underground development plan contemplated by the Feasibility Study.

Mining and Stope Information: A Robust Bulk Mining Operation

The Feasibility Study contemplates mining 403 stopes comprising more than an estimated 3.5 million tonnes of ore over the estimated LOM. Based on a US$1,375/oz gold price assumption, the stope shapes were designed using a blended 3.41 g/t Au mining cut-off grade (including Cut-and-Fill (“C&F”) Talc stopes, where a 5.0 g/t Au mining cut-off grade was applied). The Company and its consultants identified an additional 100 stopes that fall below the 3.41 g/t Au mining cut-off grade assumed in the Feasibility Study (and are therefore not included) which could potentially be included in a future LOM plan with further engineering, infill diamond drilling, and utilizing a lower mining cut-off grade (based on a higher gold price assumption). The Feasibility Study reflects extensive geo-mechanical and geo-technical analysis towards the stope design and underground development planning, resulting in smaller average stopes sizes that require additional underground development metres when compared to the 2019 PEA¹⁰.

Four mining methods are contemplated by the Feasibility Study: Sub-Level Longhole (bulk mining, 64% LOM tonnes), Uppers (bulk mining, 16% LOM tonnes), Mass Blasting Raise Mining (“MBRM”) (bulk mining, 13% tonnes) and C&F (selective mining, 7% tonnes). Table 7 provides additional detail on these mining methods as contemplated by the LOM plan in the Feasibility Study. The amenability of Sub-Level Longhole and Uppers mining methods was demonstrated during the test trial mining program in 2018¹¹. An opportunity for the Project is the potential to expand the use of MBRM due to its minimal use of sub-level development and the ability to mine narrow widths (down to 1.2 m).

The Feasibility Study contemplates that mined ore will be mucked from the stope draw point, transported to Level re-mucks where it will be loaded into trucks for haulage to surface or to the 610 m Level truck dump/grizzly prior to being skipped to surface and stockpiled. Prior to mill processing, the stockpiled ore would be sent to the primary surface crusher and crushed to a size minimum size of 150 mm (or 6-inch minus), the optimal feed for the Semi-Autogenous mill (“SAG”).

The Feasibility Study estimates total LOM payable gold production of 602,987 oz over a period of 8.2 years, of which 47,829 ounces of production is estimated during the 21-month Pre-CP ramp-up period. Annual production during CP averages an estimated 79,308 oz per year over the 7-year CP period. Please see Diagram 2 for the LOM production profile under the Feasibility Study.

Mill Processing and TMF: Benefiting from Substantial Surface Infrastructure

The Project has an operational mill processing facility at site. The main components of the Project mill are a SAG grinding unit, Knelson gravity concentrators, a ball mill, and the carbon-in-leach circuit. The Project mill has an estimated top-end capacity throughput of 1,800 tpd at the current configuration with minor upgrades. Prospective further capital upgrades (primarily installing an additional ball mill) could potentially expand mill capacity up to an estimated 2,500 tpd. During the 2018 bulk sample processing program¹¹, the existing Project mill achieved an average throughput of 1,540 tpd (based on a 22-hour mill availability) and gold recoveries of 95.1% (43.2% from gravity); the Feasibility Study assumes similar mill recovery estimates.

The Feasibility Study contemplates a 21-month ramp-up period to Commercial Production⁴, which commences in Year 1 of the LOM financial model in the Feasibility Study (See Table 8 for LOM financial model). The LOM plan in the Feasibility Study forecasts commencement of stockpiling ore shortly after the start of construction, with processing of stockpiles forecast to commence after 7 months of the Pre-CP period (i.e., in Year -2 stub year). The Feasibility Study assumes an application to amend the Project permits to a higher throughput rate of 1,800 tpd during the Pre-CP period in order to be able to operate above 1,250 tpd from Year 2 of CP.

The Project currently has an existing TMF and operating water treatment plant. The Feasibility Study includes the expansion of the TMF and addition of an ammonia treatment unit to the current water treatment plant.

Capital and Operating Costs Estimates

Please see Table 3 for a summary of the Feasibility Study capital and operating costs estimates. Please see Table 4 for more details on the Initial and Sustaining Capital estimates in the Feasibility Study.

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