Superior Gold Inc. (TSX-V: SGI) (OTCMKTS: SUPGF) announces detailed production results for the second quarter of 2022 for the Company’s 100%-owned Plutonic Gold operations, located in Western Australia.

Second Quarter Highlights

• Safety performance improved during the quarter with a 24% reduction in the total injury frequency rate achieved during the period. Our safety improvement program is progressing and on track.
• Production of 15,196 ounces, a 21% decrease over the comparable prior-year period, primarily as a result of unusually high rainfall for the month of May and the impact of the removal of COVID-19 restrictions in Western Australia in April.
• Sales of 16,726 ounces, a 6% increase over the previous quarter and a 12% decrease over the comparable period.
• Ore milled of 407kt, a 13% increase over the comparable prior-year period following successful shutdowns in Q1 and Q2, now running closer to its capacity.
• An updated Mineral Reserve and Resource statement which incorporated an increase in mineral reserves of 66% and an increase in inferred mineral resources of 29%. The 43-101 Technical Report was also updated and re-issued.
• Cash and cash equivalents totaling $18.2 million at the end of the quarter.

Chris Jordaan, President, and CEO of Superior Gold stated: “The second quarter provided some unexpected challenges on two fronts, unusually high rainfall and increases in COVID-19 cases.

Rainfall events in May were extremely unusual.  We received 143 millimetres of rain for the month compared to a long-term average of 15 millimetres and an annual rainfall target of 264 millimetres. With over 50% of the annual expected rainfall falling during May, flooding around the airport runway and Main Pit benches resulted in significant flight disruption and delays in accessing the early entry to the Main Pit development.

Following the removal of a number of COVID-19 restrictions within Western Australia in April, we experienced a surge in COVID-related absenteeism and disruption with realized COVID-19 rates running on average between 3-5% with spikes as high as 13% in May. This had a direct impact on available operators in the underground, impacting our ability to access higher grades, as well as a shortage of specialized technical staff to maintain equipment causing extended downtimes.  We continue to mitigate the COVID-19 issues by over manning in critical roles.  We observed improvements in COVID-19 rates over the last month.

Both of these issues impacted planned production, particularly in accessing the Main Pit mill feed that was originally planned for Q2. The combined effects delayed flights to the mine site and caused an abnormal shortage of key employees in the mining operations and contractors on-site.

Despite these challenges, we realized significantly improved throughput primarily attributable to the successful 15-day planned mill shut down in Q1 and three additional days in Q2 for relining of all mills. However, the throughput benefit was offset by lower realized tonnes and grades from the underground than planned due to underground operator shortage and the delayed entry into the Main Pit, both of which resulted in the processing of lower grade stockpile material during the quarter.

Looking ahead, the plant is now running closer to its nameplate capacity of 5,000 TPD. This improved rate is also higher than our planned rate for the second half of 2022. As we look ahead to the second half of the year, we are also seeing progress on material deliverables which will help to increase head grades into the plant and continue our trajectory of higher throughput rates. The delivery of an additional jumbo, loader and truck for the underground mine will have a positive impact on development metres and tonnes delivered from the underground in Q4.

We are targeting production and cash flow increases in the second half of 2022, while carefully monitoring for any further disruptions from COVID-19 or other possible situations which could affect production levels.”

The Company will be releasing its complete financial and operating results for the second quarter of 2022 in August 2022.

Second Quarter 2022 Production Details

Preliminary production details are summarized in the table below.

Qualified Person

The scientific and technical information in this news release has been reviewed and approved by Ettienne Du Plessis, who is a “qualified person” as defined by NI 43-101. Mr. Du Plessis is not independent of the Company within the meaning of NI 43-101.

About Superior Gold

Superior Gold is a Canadian-based gold producer that owns 100% of the Plutonic Gold Operations located in Western Australia. The Plutonic Gold Operations include the Plutonic underground gold mine and central mill, numerous open-pit projects including the Plutonic Main Pit push-back project, the Hermes open pit projects, and an interest in the Bryah Basin joint venture. Superior Gold is focused on expanding production at the Plutonic Gold Operations and building an intermediate gold producer with superior returns for shareholders.