MAGNA GOLD : ANNOUNCES ACQUISITION OF THE SAN FRANCISCO MINE AND PRIVATE PLACEMENT

Magna Gold Corp. (TSXV: MGR, OTCQB: MGLQF) ('Magna' or the 'Company') is pleased to announce that it has entered into a definitive purchase agreement (the 'Definitive Agreement') with Timmins GoldCorp Mexico S.A. de C.V. ('Timmins'), a wholly-owned subsidiary of Alio Gold Inc. ('Alio'), to acquire the San Francisco Mine (defined below) located in Sonora, Mexico (the 'Acquisition').

Arturo Bonillas, President and Chief Executive Officer of Magna, stated, 'The acquisition of the San Francisco Mine is a pivotal moment in Magna's evolution to become a growing gold producer in Mexico. Our team has a long history with the operation, and we are confident in our ability to re-establish the San Francisco Mine as a profitable mine. Our focus remains to generate value for our shareholders and this acquisition underpins our ability to do so in the immediate and long-term'.

Overview of Historical Results from the San Francisco Mine

The San Francisco property is situated in the north central portion of the state of Sonora, Mexico, approximately 150 kilometres north of the state capital, Hermosillo. The property consists of 21 contiguous mining concessions totaling an area of 47,395 hectares (the 'San Francisco Mine'). The operation is comprised of two previously mined open pits (San Francisco and La Chicharra), together with heap leach processing facilities and associated infrastructure located close to the San Francisco pit.

During July 2011, Alio expanded the crushing system to 15,000 tonnes per day ('tpd'). In December 2012, a new additional 5,000 tpd crushing circuit was installed and in August 2013, an expansion was made to the crushing circuit to bring total capacity of the new circuit to 7,000 tpd. Total crushing capacity at the mine is currently 22,000 tpd. The gold recovery operation comprises two adsorption-desorption-recovery ('ADR') plants with a total of three parallel sets of carbon columns. In the first quarter of 2017, a new stripping circuit and an additional carbon tank was added to the circuit and Alio implemented several operational changes to improve overall gold recovery.

Since declaration of commercial production in April 2010, the operation has produced over 820,000 ounces of gold and between 2013 and 2017, the mine produced over 100,000 ounces of gold per year on average. In 2020, the mine entered into a period of residual leaching and Alio expects to recover between 12,500 to 15,000 ounces of gold.

Operational Improvement Plan

Following closing of the Acquisition, Magna intends to execute a mine operational improvement plan that will include a full review and update to (i) the mine design and production plan, (ii) metallurgy and processing, (iii) workforce management, and (iv) local and regional exploration. Based on Magna's review to date, the Company believes it can re-commence mining operations in the near term with the goal of establishing profitable mining operations.

Magna will provide additional details with respect to the mine operational improvement plan following the closing of the Acquisition. The mine operational improvement plan will be supported by a preliminary economic assessment, pre-feasibility study or feasibility study.

About Magna Gold Corp.

Magna Gold Corp is a mineral exploration company focused on acquiring, exploring and developing quality precious metals properties in Mexico. Primary strength of the Company is the team of highly experienced mining professionals with a proven track record of developing properties in Mexico from discovery to production on budget and on time.

The Company's shares trade on the TSXV under the trading symbol 'MGR' and OTCQB under the trading symbol 'MGLQF'. Magna takes social license seriously and employ local community members and services in its operations.

Contact:

Tel: [phone]

Email: [e-mail]

This news release includes certain 'forward-looking statements' which are not comprised of historical facts. Forward-looking statements include estimates and statements that describe the Company's future plans, objectives or goals, including words to the effect that the Company or management expects a stated condition or result to occur. Forward-looking statements may be identified by such terms as 'believes', 'anticipates', 'expects', 'estimates', 'may', 'could', 'would', 'will', or 'plan'. Since forward-looking statements are based on assumptions and address future events and conditions, by their very nature they involve inherent risks and uncertainties. Although these statements are based on information currently available to the Company, the Company provides no assurance that actual results will meet management's expectations. Risks, uncertainties and other factors involved with forward-looking information could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information. Forward looking information in this news release includes, but is not limited to, information about the structure and terms of the Acquisition, timing for completion of the Acquisition, the structure and terms of the Offering, the use of proceeds of the Offering, timing and completion of the Offering, timing for receipt of required regulatory approvals, including the acceptance of the TSX Venture Exchange, the ability of the Company to complete the Acquisition on the terms announced, the Company's objectives, goals or future plans, statements, exploration results, potential mineralization, the estimation of mineral resources, exploration and mine development plans, timing of the commencement of operations and estimates of market conditions. Factors that could cause actual results to differ materially from such forward-looking information include, but are not limited to the inability to satisfy the conditions required to complete the Acquisition, the inability to receive required regulatory approvals, including the acceptance of the TSX Venture Exchange, termination of the Definitive Agreement failure to identify mineral resources, failure to convert estimated mineral resources to reserves, the inability to complete a feasibility study which recommends a production decision, the preliminary nature of metallurgical test results, delays in obtaining or failures to obtain required governmental, environmental or other project approvals, political risks, inability to fulfill the duty to accommodate First Nations and other indigenous peoples, uncertainties relating to the availability and costs of financing needed in the future, changes in equity markets, inflation, changes in exchange rates, fluctuations in commodity prices, delays in the development of projects, capital and operating costs varying significantly from estimates and the other risks involved in the mineral exploration and development industry, and those risks set out in the Company's public documents filed on SEDAR. Although the Company believes that the assumptions and factors used in preparing the forward-looking information in this news release are reasonable, undue reliance should not be placed on such information, which only applies as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames or at all. The Company disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, other than as required by law.

(C) 2020 Electronic News Publishing, source ENP Newswire