ENHANCED CASH POSITION AND CASH FLOW FROM OPERATIONS  

Superior Gold Inc. (TSX-V: SGI) announces financial results for the third quarter of 2021 for the Company’s 100%-owned Plutonic Gold Operations, located in Western Australia.

Third Quarter Highlights

• Production of 19,379 ounces, a marginal increase over the prior quarter and 23% increase over the comparative quarter of 2020
• Stope grade of 2.95 g/t gold in the third quarter and 3.23 g/t year to date as the Company continues to target an average stope grade of 3.0 g/t gold
• Initiated mining of the Perch open pit on schedule, the Company’s second open pit in 2021
• Reduced All-In Sustaining Cost¹ (“AISC”) by 10% from the comparative quarter of 2020 to $1,453 per ounce
• Achieved a realized gold price¹ of $1,772 per ounce, resulting in an AISC margin of $319 per ounce
• Net income for the period of $0.01 per share and adjusted net income of $0.01
• Generated cash flow from operations of $6.3 million after working capital changes, an increase from $0.4 million in the prior year period
• Strong financial position with $20.5 million in cash and cash equivalents, a 19% or $3.2 million increase over the December 31, 2020 position, and zero term debt
• Continued high-grade exploration results from two new underground mining fronts
• Recorded zero incidences of COVID-19 infection for a seventh consecutive quarter

Chris Jordaan, President and CEO of Superior Gold stated: “We are very pleased to report our fifth quarter-over-quarter increase in production which has led to a steady improvement in our financial position. Our third quarter production of 19,379 ounces when combined with the operational initiatives that were put in place has led to a decrease in our costs for the third quarter with an AISC per ounce decreasing to $1,453 per ounce from $1,519 per ounce in the second quarter of 2021. Year to date AISC per ounce is $1,494 per ounce, below the bottom end of our cost guidance. We continue to track towards the upper end of our production guidance for the full year 2021. In addition, with the improved performance and the full repayment of the gold loan at the end of the second quarter of 2021, operating cash flow for the third quarter of 2021 increased to $6.3 million after working capital changes from $2.7 million in the second quarter of 2021. This demonstrates the ability of Plutonic to generate meaningful cash flow when performing at consistent levels and it is a testament to the site team’s continued execution of the improvement initiatives put in place.

Technical work related to a better understanding the Plutonic orebody, including the impact of the northwest trending faults that control the location and concentration of higher-grade gold mineralization continues. Phase one of this work has been completed on four main mining areas that are likely to form the basis of our 2022 production plan. The proximity of these areas to existing workings is expected to enable quick, low-cost entry with the objective of allowing for less reliance on remnant mining beginning in 2022.

An operational review, initiated in the third quarter, is nearing completion and has identified a number of additional growth and productivity improvement projects. The completion of open pit mining at Plutonic East followed by the restart of Perch in September was completed on schedule. For the third quarter of 2021 these open pits provided sufficient surface material to the mill to fully displace all low-grade stockpile resulting in higher grade feed to the mill. When combined with the opening of new underground mining fronts being planned, it is expected to continue to improve our grade profile and future ability to generate significant operating cash flow over the remainder of 2021 and beyond.”

Summary of Financial and Operational Results:

Plutonic Gold Operations

The Plutonic Gold Operations produced and sold 19,379 and 19,282 ounces of gold, respectively, for the third quarter of 2021. Total cash costs¹ of $1,341/ounce sold and AISC of $1,453/ounce sold were below the realized gold price¹ of $1,772/ounce for the three-month period ending September 30, 2021.

In comparison, 15,699 and 15,492 ounces of gold were produced and sold, respectively for the third quarter of 2020. Total cash costs¹ of $1,471/ounce sold and AISC¹ of $1,617/ounce sold were below the realized gold price¹ of $1,756/ounce for the three-month period ending September 30, 2020.

Total cash costs¹ and AISC¹ decreased over the prior period primarily as a result of a higher number of ounces of gold sold, partially offset by the strengthening of the Australian dollar relative to the U.S. dollar in comparison to the third quarter of 2020.

The Company generated net cash from operations after working capital changes of $6.3 million for the three months ending September 30, 2021.

Exploration Activities

During the third quarter of 2021, the Company provided an exploration update on drilling along the Western Mining Front and Baltic Gap¹. The targeted drilling is consistent with the Company’s stated exploration strategy to accelerate exploration and identify new mining fronts to ultimately allow for improved mining grades, increased productivity and reduced reliance on remnant mining.

The latest drilling results released in the third quarter show continued extensions of the western edge of the Plutonic deposit a further 60 metres along the entire Western Mining Front. Results such as drill hole UDD24141 in the Caspian zone, which intersected 42.2 g/t gold over 5.6 metres, and drill hole UDD24376 in the Baltic Extension zone, which intersected 17.7 g/t gold over 6.4 metres gives the Company further confidence in mining higher grades at Plutonic in the future¹.

The Company continues to be focused on reserve and resource expansion by completing in-fill drilling and exploration drilling of new mining fronts. These drill intersections, along with previous announced drill intersections in 2021 have not been reflected in Mineral Resource estimates.

2021 Guidance

The Company is tracking towards the upper end of its 2021 production guidance which is summarized in the table below.

Qualified Person

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.