Sarama Resources Ltd. (TSX-V:SWA) is pleased to announce that recent oxide-focussed drilling at the South Houndé Project in south-western Burkina Faso has extended the strike length of drill-defined mineralisation by 2km to over 12km. This represents an approximate 20% increase to the strike length of the mineral resource and continues to illustrate the scale of the mineralised system at the Project (refer Figures 1 & 2).

Higher-grade drill intersections, including 5m @ 7.26g/t Au and 8m @ 4.72g/t Au, were intersected in oxide as were broader zones including 17m @ 1.59g/t Au and 29m @ 1.05g/t Au. Numerous other intersections present new targets for future growth-orientated exploration.

The drilling is expected to increase the oxide and free-milling components of the mineral resource base that currently totals approximately 600koz Au (oxide and transition components) out of a total 2.1Moz Au mineral resource⁽¹⁾. Sarama’s objective is to advance its southern Houndé Belt projects (refer Figure 1) toward a low capital intensity, high-return development, initially exploiting the oxide and free-milling material as part of a multi-stage project.

Highlights

• Strike length of drill-defined mineralisation increased by approximately 2km to over 12km
• New drilling expected to increase the 600koz Au⁽¹⁾ oxide and free-milling component of the current mineral resource base
• Drilling program consisted of 110 air-core (“AC”) holes, totalling 6,500m. Full results are listed in Appendix A with significant intersections including:
  • 8m @ 4.72g/t Au from 34m in TAA077;
  • 5m @ 7.26g/t Au from 16m in TAA068;
  • 29m @ 1.05g/t Au from 21m in TAA029;
  • 17m @ 1.59g/t Au from 34m in TAA080;
  • 5m @ 5.04g/t Au from 21m in TAA071;
  • 11m @ 1.34g/t Au from 49m in TAA007; and
  • 8m @ 1.86g/t Au from 48m in TAA032.
• Numerous other intersections have generated new oxide targets for follow-up
• The discovery of additional oxide mineralisation further supports Sarama’s regional development plan for the southern Houndé Belt which features a low capital intensity, high-return project configuration focussed initially on oxide and free-milling material

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

“We are very pleased with these initial results and are confident the 600koz Au oxide and transition component of the mineral resource will increase and further underwrite development plans for our southern Houndé Belt projects.

The potential combination of oxide and transition material from the South Houndé Project with higher-grade oxide and free-milling material from the ThreeBee Project has the scope to provide a financially attractive stage 1 development at US$1,200/oz gold and an even more attractive and longer life development in the current gold price environment.

We look forward to the upcoming exploration season where we intend to pursue additional targets generated in the most recent round of drilling, pushing ahead with existing exploration targets and importantly, getting more definition into our project development options.”

Oxide Drilling at Obi, Kenobi and Djimbake Prospects

The recent drilling at the Obi, Kenobi and Djimbake Prospects has yielded encouraging results which will provide valuable incremental feed to the envisaged project development. Importantly, the scale of the mineralised system at the Project has continued to grow with each phase of extensional drilling and the strike length of drill-defined mineralisation has increased by 2km to over 12km with the recent drilling.

Significant intersections include: 8m @ 4.72g/t Au from 34m in TAA077, 5m @ 7.26g/t Au from 16m in TAA068, 29m @ 1.05g/t Au from 21m in TAA029, 17m @ 1.59g/t Au from 34m in TAA080, 5m @ 5.04g/t Au from 21m in TAA071, 11m @ 1.34g/t Au from 49m in TAA007 and 8m @ 1.86g/t Au from 48m in TAA032. Full results are listed in Appendix A.

The program consisted of 110 AC holes for a total of 6,500m drilling and was focussed on the southern extent of the Project, beyond the limits of the current 2.1Moz Au⁽¹⁾ mineral resource. Previous exploration work in the area, consisting of soil geochemistry, ground geophysical surveys and reconnaissance drilling, indicated potential to significantly increase the strike length of the drill-defined mineralisation.

Sarama targeted extensions and additions to known mineralisation in the oxide horizon to a vertical depth of approximately 50m. Additional gold mineralisation is complementary and highly accretive in value to Sarama’s development plans for the region, which contemplates a low capital intensity, high-return project configuration initially exploiting the oxide and free-milling material on the Company’s southern Houndé Belt projects.

Mineralisation intersected by the new drilling is interpreted to be largely consistent with the mineral resource area immediately to the north. Working interpretations generally feature a series of steeply-dipping mineralised lodes striking in a north-north-easterly direction. Individual lodes range in true thickness from 2-15m, but are typically 7m wide (refer Figure 2). It is expected that these lodes are weathered continuations of the extensive system of mineralised quartz-feldspar-porphyry dykes hosted by a volcano-sediments in the northern areas.

Of note are indications of oblique mineralisation, trending north-east and linking the more dominant NNE trending lodes. This geometry bears a resemblance to the better drilled areas of the mineral resource in the north which are typically of higher grade and have a proliferation of discrete lodes within the broader mineralised package.

The drilling also intersected mineralisation in two areas which permit several different interpretations, one of which is the common NNE-striking, steeply-dipping lode and the other being a series of flat-lying lodes, dipping at approximately 20° to the east and with a slight plunge to the north (refer Figure 3). It is worth noting that the easterly-most of these potential flat-dipping areas features composite grades consistently in the 2-7g/t Au range which is substantially higher than that of the more prevalent mineralisation. More drilling is required to confirm the geometry in these areas, but the potential for multiple lode geometries is a welcome feature which may add to the diversity of the mineralised system and provide additional targets for exploration.

Future Exploration Direction

Future exploration on the Project will be oriented towards oxide and free-milling targets within the main mineralised corridor. The recent drilling in the south of the Project has yielded encouraging results and has also delivered several new targets for future investigation.

These new targets will be synthesised with the needs of project development within the main mineral resource area and other proximal exploration.

In parallel with the activity in the main mineralised corridor of the South Houndé Project, the Company has been developing additional targets for testing within the ThreeBee Project⁽⁴⁾, to the immediate north (refer Figure 1) which forms part of Sarama’s regional development plans.

Figure 1 – Sarama’s Principal Property Interests^(4,6) in the Southern Houndé Belt with New Drilling Area Indicated

Figure 2 – Drilled Areas and Highlighted Results in the Southern Portion of the South Houndé Project
(Magnetic Interpretation Base Layer)

Figure 3 – Cross-Section of Newly-Interpreted, Flat-Lying Mineralisation (View to North)

ABOUT SARAMA RESOURCES LTD

Sarama Resources Ltd  is a West African focused gold explorer and developer with substantial landholdings in Burkina Faso. Sarama is focused on consolidating under-explored landholdings in Burkina Faso and advancing its key projects towards development.

Sarama’s South Houndé and ThreeBee Projects, in which the Company has the ability to hold a 100% interest^(4,6), 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 estimate of 2.1Moz gold⁽¹⁾ at the South Houndé Project which is complemented by the ThreeBee Project’s Bondi Deposit (historical estimate of mineral resources of 0.3Moz Au measured and indicated and 0.1Moz Au inferred⁽²⁾).

Together, the projects form a cluster of advanced gold deposits, within trucking distance of one another, which potentially offers a development option for a central processing facility in the southern Houndé Belt region of Burkina Faso, fed from multiple sources.

Sarama has also built a growth pipeline which features a new 600km² 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 holds approximately 22% 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 Semafo Inc. Semafo is the operator of the JV, having acquired the previous operator, Savary Gold Corp. In October 2015, Savary declared a maiden inferred mineral resource estimate of 671,000 ounces of contained gold⁽³⁾ at the Karankasso Project JV.

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.

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 (“Orezone”) 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 (the “Bondi Technical Report”). Yves Buro is an employee of Met-Chem Canada Inc and is independent of Orezone and Sarama. The technical report is available under Orezone’s profile on SEDAR at www.sedar.com.

   ii. 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 drillholes, 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 drillholes were used to determine weathering boundaries and bulk densities for modelled blocks.

   iv. The historical estimate uses the mineral resource reporting categories required under National Instrument 43-101.

   v. No more recent estimates of the mineral resource or other data are available.

   vi. 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.

4. Karankasso Project – 9.2Mt @ 2.3g/t Au (at a 0.5g/t Au cut-off). The effective date of the most recent Karankasso Project JV mineral resource estimate that is supported by a technical report is October 7, 2015. For further information regarding that mineral resource estimate please refer to the technical report titled “Technical Report and Resource Estimate on the Karankasso Project, Burkina Faso”, dated October 7, 2015 and prepared by Eugene Puritch and Antoine Yassa. Eugene Puritch and Antoine Yassa are employees of P&E Mining Consultants Inc. and are independent of Savary and Sarama. The technical report is available under Savary’s profile on SEDAR at www.sedar.com. Sarama has not independently verified Savary’s mineral resource estimate and takes no responsibility for its accuracy. Semafo is 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, including but not limited to, metallurgical testwork, exploration drilling and mineral resource estimation, but Sarama is not in a position to quantify the impact of this additional work on the mineral resource estimate referred to above.
5. The ThreeBee Project comprises the Djarkadougou, Botoro, Bamako⁽⁵⁾ and Bouni⁽⁵⁾ Properties and Sarama has, or is entitled to have, a 100% interest in each of the properties. The Djarkadougou, Bamako and Bouni Exploration Permits are going through a process with the government of Burkina Faso where it is required they be reissued as a new full-term exploration permit. The Company anticipates this to 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.
6. For further information regarding the drilling on the Bamako and 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.
7. Upon satisfaction by Acacia of certain conditions precedent and completion of the Termination Agreement with Acacia, Sarama will have a 100% interest in the South Houndé Project and will be the operator of the Project. For further details see the Company’s news release of May 14, 2019, a copy of which is available under the Company’s profile on SEDAR at www.sedar.com.