Sarama Resources Ltd. (TSX-V:SWA) is pleased to announce that recent oxide-focussed drilling at its 100%-owned⁶ South Houndé Project in south-western Burkina Faso has better delineated zones of broad oxide mineralisation within the Project’s current mineral resource.

Higher-grade drill intersections of 35m @ 3.29g/t Au (drilled oblique to several sets of mineralisation and ending in mineralisation), 7m @ 5.59/t Au (ending in mineralisation) and 7m @ 5.06g/t Au were intersected in oxide material at the MC Deposit while other broad intersections including 17m @ 2.16g/t Au, 11m @ 2.89g/t Au, 12m @ 2.11g/t Au and 11m @ 2.27g/t Au were returned from drilling at the MM Deposit.

Drilling at the Kenobi Deposit intersected broad mineralisation in oxide material which has prompted a re-interpretation of gold-bearing lodes in the area to include several flat-lying zones, which are considered favourable for potential open pit mining.

With the recent increase in the strike length of drill-defined mineralisation at the Project to over 12km, these results are expected to refine the understanding of the oxide and free-milling components of the mineral resource base that currently totals approximately 600koz Au (oxide and transition) out of a total 2.1Moz Au mineral resource¹. Sarama’s objective is to advance its southern Houndé Belt projects (refer Figure 1) toward a low capital, high-return development, initially exploiting the oxide and free-milling material as part of a multi-stage project.

Highlights

• Drilling intersected broad intervals and higher-grade mineralisation in oxide material at the MM and MC Deposits confirming the geometry and grade distribution of the mineral resource
• Central area of the Kenobi Deposit reinterpreted to include several broad, flat-lying lodes, which are favourable for potential open pit mining
• Drilling program consisted of 34 air-core (“AC”) holes, totalling 1,600m. Full results are listed in Appendix A with significant intersections including:
  • 35m @ 3.29g/t Au (EOH)* (drilled oblique to several sets of mineralisation) from 6m in TAA130 (MC Deposit);
  • 7m @ 5.59g/t Au (EOH)* from 29m in TAA134 (MC Deposit);
  • 17m @ 2.16g/t Au from 27m in TAA140 (MM Deposit);
  • 7m @ 5.06g/t Au from 9m in TAA129 (MC Deposit);
  • 11m @ 2.89g/t Au from 19m and 12m @ 2.11g/t Au from 33m in TAA139 (MM Deposit);
  • 11m @ 2.27g/t Au from 17m in TAA133 (MM Deposit); and
  • 12m @ 1.59g/t Au from 23m and 11m @ 1.46g/t Au from 42m in TAA111 (Kenobi Deposit).
• Drilling is anticipated to add to the existing 600koz Au¹ oxide and free-milling component of the Project’s current mineral resource

* EOH denotes an intersection situated at the end of the hole with mineralisation likely to extend beyond

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

“We are very pleased with these strong intersections in oxide material across several locations within the mineral resource. The drilling at the MM and MC Deposits confirms the continuity of higher-grade mineralisation and gives us confidence in this material which forms an important part of Sarama’s regional development.

The drilling at Kenobi has prompted a revised interpretation to feature flat-lying lodes and we are keen to examine the implications of this style of near-surface mineralisation across the broader Project.

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

Oxide Drilling at MM, MC and Kenobi Deposits

The recent drill program, consisting of 34 AC holes for a total of 1,600m, was designed to confirm the tenor and continuity of near-surface, higher-grade mineralisation within the current mineral resource at the MM and MC Deposits and to test for near-surface, flat-lying mineralisation at the Kenobi Deposit (refer Figure 2). These areas are important parts of the mineral resource and are anticipated to provide early feed in the regional development plans contemplated by Sarama.

MM & MC Deposits

Drilling at the MM and MC Deposits primarily focussed on higher-grade zones within the existing mineral resource, but also tested for extensions to interpreted mineralisation.

New intersections in the near-surface oxide horizon at the MM Deposit include 11m @ 2.89g/t Au (including 7m @ 3.85g/t Au) and 12m @ 2.11g/t Au (including 8m @ 3.00g/t Au) in TAA139 and 17m @ 2.16g/t Au (including 3m @ 4.74g/t Au) in TAA140, with the latter presenting a promising target for further extensional exploration.

Drilling at the MC Deposit also intersected higher-grade mineralisation including 35m @ 3.29g/t Au (including an elevated grade zone of 13m @ 4.77g/t Au) in TAA130, 7m @ 5.06g/t Au in TAA129, 7m @ 5.59g/t Au (ending in mineralisation) in TAA134 and 11m @ 2.27g/t Au in TAA133. These intersections were within the mineral resource and confirmed interpreted lode geometry and grade distribution.

The intersection in hole TAA130 has been interpreted to intersect mineralisation of multiple geometries adjacent to one another. One of these lodes is thought to be oriented sub-parallel to the trajectory of the drill hole, which in part, produces the long downhole intersection length. This hole and adjacent drilling suggest upside exists to the inventory of higher-grade oxide mineralisation, present as unmodelled intersections and potential thickened zones and/or additional parallel lodes which will require further drilling to properly understand.

Kenobi Deposit

Previous interpretations of mineralisation in the central part of the Kenobi Deposit presented a series of steeply-dipping parallel lodes striking in a north-north-easterly direction, consistent with the geometry of other lodes within, and the trend of, the larger mineralised system. The intersection of broad, higher-grade oxide mineralisation in recent drilling in three fences over a strike length of approximately 200m has prompted a revision to the interpretation in this immediate area.

The original steeply-dipping lode interpretation remains valid but now appears to be complimented by a series of flat-lying mineralised zones which are present in the oxide horizon, striking NNE and dipping gently to the east (refer Figure 3). The flat-lying lodes appear to ‘overprint’ the more steeply dipping lodes and importantly, exhibit higher grades in an ‘enriched’ zone. The Company considers this a favourable development in the understanding of the mineral resource and would expect to see an increase in the material available for mining by open pit compared to the original interpretation.

New intersections of 12m @ 1.59g/t Au (including 4m @ 2.87g/t Au) and 11m @ 1.46g/t Au in TAA111 and 13m @ 0.82g/t Au (including 4m @ 1.75g/t Au) in TAA112 complement healthy historical intersections of 11m @ 2.13 g/t Au in FRC900, 26m @ 1.08g/t Au (including 8m @ 2.15g/t Au) in FRC899A, 23m @ 1.23g/t Au (including 10m @ 1.85g/t Au) in FRC899A and 14m @ 1.12g/t Au (including 6m @ 2.08g/t Au) in AC1927, all of which approximate true width within the flat-lying zone.

The presence of flat to gently-dipping, extensional structures that cut steeply into sub-vertical dipping stratigraphy is common in many known gold deposits in the region and this orientation has recently been recognised at the Kari Pump Prospect, Houndé Mine (refer Endeavour Mining news release of November 15, 2018). Recently interpreted flat-dipping mineralisation in several areas at the South Houndé Project is potentially related to zones of structural weakness and enhanced fluid permeability and these areas are considered to be highly prospective and warrant follow-up.

Future Exploration Direction

Future exploration on the Project will continue to be oriented towards oxide and free-milling targets within the main mineralised corridor. The recent drilling in the south of the Project at the Obi, Djimbake and Kenobi Prospects (refer News Release August 21, 2019) has yielded encouraging results and has also delivered several new targets for future investigation and there are still numerous promising targets within the better drilled MM and MC Deposits which have potential to make valuable additions to the 600koz Au oxide and free-milling component of the current 2.1Moz Au mineral resource¹.

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 Project⁴, to the immediate north, 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 Kenobi, MC and MM Deposits, South Houndé Project (Magnetic Interpretation Base Layer)

Figure 3 -Newly-Interpreted, Flat-Lying Mineralisation at Kenobi Deposit (Cross-Section @ 1173360mN, 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 gold¹ 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 inferred²).

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 gold³ 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.
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 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.

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 – 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.
4. 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.
5. 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.
6. 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.