Sarama Resources Ltd. (TSX-V: SWA) announces that gold mineralisation at the MC Deposit has been extended at depth and along strike in a deep diamond drilling program at the South Houndé Project in south-western Burkina Faso.

The results are final for a H1 2017 program that was designed to test depth and strike extensions to high-grade shoots within the mineral resource and form part of an ongoing, multi-faceted exploration program aimed at increasing the Project’s 2.1Moz gold¹ inferred mineral resource to support open pit mine development and investigate the potential for underground mining.

Highlights

• Numerous mineralised lodes intersected in deep drilling at the MC Deposit and when combined with previously reported results from this program, support the extension of drill defined mineralisation by approximately 200m along strike and 400m down-dip.

• Deep drilling targeted several discrete and high-grade shoots within the mineral resource to test for strike and depth extensions with a view to examining underground mining potential.

• Results continue to demonstrate the significant scale of the mineralised system at the South Houndé Project, with drill-defined mineralisation extending continuously from surface to a vertical depth of approximately 500m and 550m at the MC and MM Deposits respectively.

• Results are reported for 6 holes totalling 900m of reverse-circulation (“RC“) and 2,000m of diamond drilling (“DDH“), with highlighted downhole intersections including (see Appendices A & B for full details):

— 2.2m @ 4.74g/t Au from 324.7m in FRC1082RE1 (DDH intersection);
— 10.4m @ 3.96g/t Au from 414.8m in FRC1082RE1 (DDH intersection);
— 3.5m @ 3.79g/t Au from 406.5m in FRC1083ARE1 (DDH intersection); and
— 4.1m @ 3.89g/t Au from 429.9m in FRC1083ARE1 (DDH intersection).

• Modest aircore drill program of 35 holes totalling 2,200m tested for near surface mineralisation at an oblique orientation to the main mineralised trends.

• Results confirm known mineralisation and intersected anomalous mineralisation outside the mineral resource with highlighted oxide intersections of:

— 8m @ 2.46g/t Au from 54m in AC2704;
— 8m @ 1.55g/t Au from 28m in AC2707;
— 8m @ 0.97g/t Au from 28m in AC2692;
— 6m @ 0.90g/t Au from 52m in AC2706; and
— 10m @ 0.41g/t Au from 24m in AC2693.

• Minimum USD$3.5M (CAD$4.5M) exploration program, funded by Acacia Mining plc is anticipated for 2017, with works including geochemical and geophysical surveys and drill programs.

MC and MM Deposit Deep Diamond Drilling

The reported results are final for a deep drilling program conducted in H1 2017 that targeted depth and strike extensions of discrete, high-grade shoots within the known mineral resources of the MC and MM Deposits and which was commissioned to examine the potential for underground mining at the South Houndé Project (refer Figures 1, 2 & 3). Full results are contained in Appendix A.

Six combination RC/diamond drill holes were recently drilled for a total 2,900m (900m RC and 2,000m diamond), continuing the previously reported program of 11 holes for 5,800m (refer news release June 19, 2017).

The two holes drilled at depth of the MC Deposit were designed to test the continuation of the package of parallel mineralised lodes to a vertical depth of approximately 500m. The holes intersected numerous narrow mineralised zones within felsic intrusive and sediment host units and encountered grades of varying tenor. This is consistent with previous drilling in the local area and it is anticipated that the new drilling, when combined with previously reported results of the program, will support extensions to selected lodes within the lode package of approximately 200m along strike and 400m down-dip from the mineral resource. Highlighted intersections include:

• 2.2m @ 4.74g/t Au from 324.7m in FRC1082RE1 (DDH intersection);
• 10.4m @ 3.96g/t Au from 414.8m in FRC1082RE1 (DDH intersection).
• 3.5m @ 3.79g/t Au from 406.5m in FRC1083ARE1 (DDH intersection); and
• 4.1m @ 3.89g/t Au from 429.9m in FRC1083ARE1 (DDH intersection).

The drilling in the southern area of the MM Deposit, consisting of two holes 550-580m in length, attempted to extend the strike length of higher-grade mineralisation at a vertical depth of approximately 450m and also aggressively targeted a 300m dip extension locally to known mineralisation. While the drilling successfully intersected the targeted lens, demonstrating lithological continuity, the tenor of mineralisation encountered by the two recent holes is not considered significant at these depths. The shoot still has good potential to support open pit mining in the area covered by current drilling and the shoot remains an exploration target for underground mining. Further geological work will be undertaken to better understand the controls mineralisation to improve drill targeting.

In the central area of the MM Deposit, a single drillhole, 440m in length, served as a close-out hole on the northern boundary of the high-grade shoot that was the focus of previously reported program (refer news release June 19, 2017) and which resulted in the extension of mineralisation by a distance down-dip of approximately 200m. The recently-returned hole demonstrated lithological continuity and the discrete nature of the grade shoots and will assist in fine-tuning the geological interpretation and grade domaining.

MC and MM Deposit Oxide Aircore Drilling

A modest, 35-hole aircore drill program totalling 2,200m was undertaken at the MC and MM Deposits to test for near-surface mineralisation linking two areas of the north-north-east trending MC and MM Deposits (refer Figures 1 and 2). In general, the drilling confirmed the position of known mineralisation and intersected anomalous mineralisation outside the mineral resource with highlighted oxide intersections of:

• 8m @ 2.46g/t Au from 54m in AC2704;
• 8m @ 1.55g/t Au from 28m in AC2707;
• 8m @ 0.97g/t Au from 28m in AC2692;
• 6m @ 0.90g/t Au from 52m in AC2706; and
• 10m @ 0.41g/t Au from 24m in AC2693.

Full results are listed in Appendix B.

It is anticipated that further AC drilling will be conducted to investigate anomalous intersections located between the known mineralised zones with a view to delineating additions to the mineral resource.

Sarama’s President and CEO, Andrew Dinning, commented:

“The completion of the deep diamond drilling at the MC and MM Deposits conducted over the course of H1 2017 has provided a look into the depth potential of the mineralised system and it is pleasing to see that it has been intersected to a vertical depth of 500-550m in several areas, highlighting the scale of the system.

These drill results continue to reinforce our belief that the South Houndé Project has the potential to be an open pit and underground mining complex, particularly when Sarama’s highly accretive Bondi Deposit⁴ and recently acquired Botoro Property are included in the equation. Sarama remains positioned to play a key role in the development of the southern part of the Houndé Belt.”

Sarama Resources Ltd is a West African focused gold explorer with substantial landholdings in Burkina Faso. Sarama is focused on consolidating under-explored landholdings in Burkina Faso and other established mining jurisdictions.

Sarama’s flagship properties are situated within the Company’s South Houndé Project area in south-west Burkina Faso. Located within the prolific Houndé Greenstone Belt, Sarama’s exploration programs have built on significant early success to deliver an inferred mineral resource estimate of 2.1 Moz gold¹. Acacia Mining plc is earning up to a 70% interest in the South Houndé Project by satisfying certain conditions, including funding earn-in expenditures of up to US$14 million, over a 4-year earn-in period and may acquire an additional 5% interest, for an aggregate 75% interest in the Project, upon declaration of a minimum mineral reserve of 1.6 million ounces of gold. Acacia has satisfied certain milestones and currently holds a 50% interest in the South Houndé Project and is continuing to sole fund exploration activities.

Sarama holds a 31% participating interest in the Karankasso Project Joint Venture which is situated adjacent to the Company’s South Houndé Project in Burkina Faso and is a JV between Sarama and Savary Gold Corp. Savary is the operator of the JV and in October 2015, declared a maiden inferred mineral resource estimate of 671,000 ounces of contained gold² at the Karankasso Project JV.

Sarama has also agreed to acquire⁴ a 100% interest in the Bondi Deposit from Orezone Gold Corporation (refer news release May 24, 2016). Bondi has a historical estimate of mineral resources of 0.3Moz Au (measured and indicated) and 0.1Moz Au (inferred)³.

Together, the South Houndé Project, Bondi Deposit and the Karankasso Project form a cluster of advanced gold deposits, within trucking distance of one another, which potentially offers a development option for a multi-source fed central processing facility in the southern Houndé Belt region of Burkina Faso.

Incorporated in 2010, the Company’s Board and management team have a proven track record in Africa and a strong history in the discovery and development of large-scale gold deposits. Sarama is well positioned to build on its current success with a sound exploration strategy across its property portfolio.