Sarama Resources Limited (TSX-V: SWA) is pleased to announce that it has closed the first Tranche  of its previously announced private placement for up to C$3 million, announced on July 13, 2020. The second tranche of the Private Placement is expected to close on or about July 31, 2020. On closing of the First Tranche, the Company has raised aggregate gross proceeds to date of C$1,568,823 through the issue of 14,262,027 common shares at a price of C$0.11 per common share.

All proceeds from the Private Placement shall be immediately available to the Company and used to advance the Company’s projects in Burkina Faso including a mineral resource update on the South Houndé Project, high value oxide focused exploration drilling, general technical work to support framing up of development options and general corporate purposes.

The securities issued in connection with the First Tranche are subject to a four-month hold period expiring November 25, 2020.

Certain insiders of the Company have acquired an aggregate of 780,295 Shares in the First Tranche, and as such the Private Placement is considered a “related party transaction” as defined under Multilateral Instrument 61-101. The Company has relied on exemptions from the valuation and minority shareholder approval requirements of MI 61-101 contained in sections 5.5(a) and 5.7(1)(a) of MI 61-101 in respect of the insiders’ participation in the Private Placement, as the Private Placement does not exceed 25% of the Company’s market capitalization.

Finders fees were paid to Cormark Securities Inc. in accordance with the policies of the TSX Venture Exchange, pursuant to a finders agreement between Cormark and the Company. The Company paid Cormark a 4% cash fee of C$24,400 for the First Tranche.

The Shares have not been and will not be registered under the United States Securities Act of 1933, as amended, (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold within the United States unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from registration is available. This announcement does not constitute an offer to sell or a solicitation of an offer to buy any of the Shares within the United States or to, or for the account or benefit of, U.S. Persons (as defined under Regulation S under the U.S. Securities Act), nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

ABOUT SARAMA RESOURCES LTD.

Sarama Resources Ltd is a West African focused gold explorer and developer with substantial landholdings in south-west Burkina Faso. Sarama is focused on maximising the value of its strategic assets and advancing its key projects towards development.

Sarama’s adjoining South Houndé and ThreeBee Projects, in which the Company holds a 100% interest⁽⁴⁾, are located within the prolific Houndé Greenstone Belt in south-west Burkina Faso and are the exploration and development focus of the Company. Its exploration programs have successfully discovered an inferred mineral resource of 2.1Moz gold⁽¹⁾ at the South Houndé Project which is complemented by the Bondi Deposit⁽⁴⁾ (historical estimate of mineral resources of 0.3Moz Au measured and indicated and 0.1Moz Au inferred⁽²⁾).

The project area includes a cluster of advanced gold deposits, within trucking distance of one another, which potentially offers a development option for a central processing facility fed from multiple sources in the southern Houndé Belt.

Sarama has further potential in its portfolio including a 600 km² exploration position in the highly prospective Banfora Belt in south-western Burkina Faso. The Koumandara Project hosts several regional-scale structural features and trends of gold-in-soil anomalism extending for over 40km along strike.

Sarama also holds approximately 19% 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 Endeavour Mining in which Endeavour is the operator of the JV. The Karankasso Project has an inferred mineral resource estimate of 709koz gold⁽³⁾ which was released in February 2020.

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 strategy to surface and maximise the value of its property portfolio.

FOOTNOTES

1. South Houndé Project – 43.0Mt @ 1.5g/t Au (reported above cut-off grades ranging 0.3-2.2g/t Au, reflecting the mining methods and processing flowsheets assumed to assess the likelihood of the inferred mineral resources having reasonable prospects for eventual economic extraction). This mineral resource contains an oxide and transition component of 16.0Mt @ 1.2g/t Au for 611koz Au (reported at a cut-off grade of 0.3g/t Au for oxide and 0.8g/t Au for transition material). The effective date of the Company’s inferred mineral resource estimate is February 4, 2016. For further information regarding the mineral resource estimate please refer to the technical report titled “NI 43-101 Independent Technical Report South Houndé Project Update, Bougouriba and Ioba Provinces, Burkina Faso”, dated March 31, 2016 and prepared by Adrian Shepherd. Adrian Shepherd is an employee of Cube Consulting Pty Ltd and is independent of Sarama. The technical report is available under Sarama’s profile on SEDAR at www.sedar.com.
2. Bondi Deposit – 4.1Mt @ 2.1g/t Au for 282,000oz Au (measured and indicated) and 2.5Mt @ 1.8g/t Au for 149,700oz Au (inferred), reported at a 0.5 g/t Au cut-off.
3. The historical estimate of the Bondi Deposit reflects a mineral resource estimate compiled by Orezone Gold Corporation which has an effective date of February 20, 2009. The historical estimate is contained in a technical report titled “Technical Report on the Mineral Resource of the Bondigui Gold Project”, dated date of February 20, 2009 and prepared by Yves Buro. Yves Buro is an employee of Met-Chem Canada Inc and is considered to be independent of Orezone and Sarama. The technical report is available under Orezone’s profile on SEDAR at www.sedar.com.
4. Sarama believes that the historical estimate is relevant to investors’ understanding of the property, as it reflects the most recent technical work undertaken in respect of the Bondi Deposit.

iii.   The historical estimate was informed by 886 drill holes, assayed for gold by cyanidation methods, were used to interpret mineralised envelopes and geological zones over the area of the historical estimate. Gold grade interpolation was undertaken using ID² methodology based on input parameters derived from geostatistical and geological analyses assessments. Field measurements and geological logging of drill holes were used to determine weathering boundaries and bulk densities for modelled blocks.

101. The historical estimate uses the mineral resource reporting categories required under National Instrument 43-101.
102. No more recent estimates of the mineral resource or other data are available.
103. Sarama is currently undertaking the necessary verification work in the field and on the desktop that may support the future reclassification of the historical estimate to a mineral resource.

vii.   A qualified person engaged by Sarama has not undertaken sufficient work to verify the historical estimate as a current mineral resource and Sarama is therefore not treating the historical estimate as a current mineral resource.

3. Karankasso Project mineral resource estimate – the mineral resource estimate for the Karankasso Project of 12.74Mt @ 1.73g/t Au for 709koz Au (effective date of December 31, 2019) was disclosed on February 24, 2020 by Semafo Inc For further information regarding that mineral resource estimate, refer to the news release “Semafo: Bantou Project Inferred Resources Increase to 2.2Moz” dated February 24, 2020. The news release is available under Semafo’s profile on SEDAR at www.sedar.com. The mineral resource estimate was fully prepared by, or under the supervision of Semafo. Sarama has not independently verified Semafo’s mineral resource estimate and takes no responsibility for its accuracy. Semafo was the operator of the Karankasso Project JV and Sarama is relying on their Qualified Persons’ assurance of the validity of the mineral resource estimate. Additional technical work has been undertaken on the Karankasso Project since the effective date but Sarama is not in a position to quantify the impact of this additional work on the mineral resource estimate referred to above.
4. The ThreeBee Project comprises the Djarkadougou, Botoro, Bamako 2⁽⁵⁾ and Nakar (formerly Bouni)⁽⁵⁾ Properties and Sarama has, or is entitled to have, a 100% interest in each of the properties. The Djarkadougou Exploration Permit is going through a process with the government of Burkina Faso where it is required it be re-issued as a new full-term exploration permit. The Company is in discussion with senior government officials regarding certain impediments to the re-issue of the Exploration Permit and anticipates these discussions will be completed in due course, though there can be no assurance that the process will be successfully completed on a timely basis, or at all.
5. For further information regarding the drilling on the Bamako 2 (formerly Bamako) and Nakar (formerly Bouni) Properties, please refer to the technical report titled “NI 43-101 Independent Technical Report South Houndé Project Update, Bougouriba and Ioba Provinces, Burkina Faso”, dated October 28, 2013 and prepared by Adrian Shepherd. Adrian Shepherd is an employee of Cube Consulting Pty Ltd and is considered independent of Sarama. The technical report is available under Sarama’s profile on SEDAR at www.sedar.com