Pasofino Gold : announces positive results from the independent preliminary economic assessment (PEA) on the Dugbe Gold Project - Liberia

NEWS RELEASE TSX-V:VEIN

PASOFINO GOLD ANNOUNCES POSITIVE RESULTS FROM THE INDEPENDENT

PRELIMINARY ECONOMIC ASSESSMENT (PEA) ON THE DUGBE GOLD PROJECT- LIBERIA

• Pre-TaxNPV5% of USD825 million, Pre-Tax IRR of 34% and AISC of USD893/oz
• • Steady State Average Annual Gold Production of approximately 188Koz
  • • Base Case Development Contemplates 14-Year Mine Life

TORONTO, ONTARIO, 24 June 2021 - Pasofino Gold Limited ("Pasofino" or the "Company") (TSXV: VEIN)

(OTCQB: EFRGF) (FSE: N07) is pleased to announce that it has completed a PEA on the Dugbe Gold Project, which includes both the Dugbe F and Tuzon deposits. The Company is earning a 49% economic interest in the project (prior to the issuance of the Government of Liberia's 10% carried interest).

HIGHLIGHTS

• Significant Production Potential - Establishing a Foundation for a New Gold District

1. 5Mtpa operation, producing approximately 2.5 Moz of gold over a 14-yearLife-of-Mine (LoM).

• 1. Steady state average annual gold production of approximately 188 Koz, with peak production of approximately 226 Koz in year 8 of operation.
• Strong Financial Metrics
• 1. Pre-taxNPV5% of USD825M (USD627M post-tax), 34% IRR (31% post-tax) at a conservative base gold price of USD1,600/oz.

1. Pre-taxNPV5% of USD1,153M (USD874M post-tax), at USD1,800/oz.

1. Fast capital payback of approximately 2.9 years from start of production. o LoM Cash flow of USD627M.1

o LoM AISC1 of USD893/oz and USD821/oz cash cost.1

• Simple Project with Economies of Scale

1. LoM strip ratio of 4.5:1 highlighted by a low 2.8:1 ratio in the first 4 years.

1 Cash costs per payable ounce and AISC per payable ounce are non-GAAP financial measures. Please see "Cautionary Note Regarding Non-GAAP Measures". AISC per payable ounce includes all mining costs, processing costs, mine level G&A, royalties, sustaining capital and closure costs. Cash costs per payable ounce includes all mining costs, processing costs, mine level G&A, and royalties.

1. Low power costs of USD0.18/kWh, with opportunities for long term savings with alternative renewable energy sources.

• 1. Significant community support built over more than a 10-year history of the Project.
• Development Capital
• 1. Pre-productioncapital requirement of approximately USD391M. Exploration and Study Upside

1. Much of the 2,599km2 land package is prospective. The Company has new drill targets in the pipeline following intensive surface exploration work undertaken over the last 6 months.

1. Ongoing positive drilling results at Dugbe F and Tuzon will be included in updated Mineral Resource Estimates planned for July and August 2021.

1. Current test work underway in at ALS Perth, Australia looking to improve metallurgical recoveries

KEY ASPECTS WHICH ENHANCE THE QUALITY OF THE PROJECT INCLUDE:

• 74km by road from the port of Greenville to the Dugbe Project.
• Dugbe F and Tuzon deposits are 4km apart, serviced by a central processing plant.
• USD0.18/kWh estimated mine life power costs.

Ian Stalker, CEO, commented; "We are extremely pleased with the set of outcomes from this PEA exercise. It underscores the potential of the Project to deliver significant value to all stakeholders going forward. Our consulting engineers and management team have set the basis for a quality feasibility study which is in progress, and which will incorporate the positive recent infill and step out exploration results recently announced. We look forward to completion of the Feasibility Study which should provide a solid foundation for the start of the build phase expected to occur in 2023

There are many key attributes of this Project demonstrated by the results of the PEA. However, from a practical construction and mining perspective, the following are worth highlighting:

• The proximity of the Project to the deep-water port of Greenville (74km away);
• The high productivity opportunity that both deposits on the Project offer provides added value to the development of Project.
• The constructive relationship enjoyed with the Government of Liberia"

The PEA was prepared in accordance with Canadian Securities Administrators' National Instrument 43-101Standards of Disclosure for Mineral Projects ("NI 43-101").The reader is advised that the

PEA summarized in this news release is intended to provide only a high-level review of the project potential and design options. The PEA mine plan and economic model include numerous assumptions and the use of inferred mineral resources. The PEA is preliminary in nature, includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the PEA will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability.

TRADE-OFFS

DRA Global (South Africa) was appointed as lead consultant to prepare the PEA in accordance with NI 43-101, and was assisted by SRK Consulting Ltd (UK) and Epoch Resources (Pty) Ltd.

A number of trade-offs were completed by DRA Global and Pasofino during the PEA work, including the evaluation of processing capacities from 4Mtpa to 7Mpta and a trade-off on a full range of power options. The 5Mtpa option was identified as the most suitable capacity for the current project, based on the life of the project, estimated capital and shareholder return.

Figure 1: The Dugbe Project location of the Dugbe F and Tuzon and deposits

For an owner mining scenario, the base case requires USD391M in initial capital. Operating costs are expected to be approximately USD826/oz during the initial years, and an average of USD893 /oz over the life of mine. During the first 4 years, operating costs are kept low by mining the shallow mineralized material in both pits (Dugbe F and Tuzon) at a targeted strip ratio of less than 2.8, increasing thereafter to an average of 6.8 over the balance of life of mine.

In terms of contained ounces, the PEA relies on 65% Indicated Resources and 35% Inferred Resources, from the Dugbe F and Tuzon deposits which are 4km apart. Updated Mineral Resource Estimate (MRE) on the Dugbe F and Tuzon deposit are anticipated to be released in July and August 2021. With the PEA now complete, the foundation is now set for the completion of the feasibility study in order to then fully demonstrate the financial viability of the Project, which is ongoing.

Other key considerations for the PEA included:

• Mining and processing scenarios that were considered ranging from 4 Mtpa to 7 Mtpa.
• Recent West African benchmarks were used to determine the capital and operating costs.
• Work to date has included the potential for power generation from hydro power and thermal co-generation with photovoltaics (PVs). This may effectively reduce the project operating cost and carbon footprint.
• Various TSF options have been initially evaluated in accordance with the stringent new Global Industry Standard on Tailings Management classification.

PROJECT DESCRIPTION AND LOCATION

The Project is located in south-eastern Liberia, approximately 60km east of Greenville and 240km south-east of the capital Monrovia. The combined Project covers an area of 2,559km2 and is defined within a single Mineral Development Agreement (MDA), issued to Hummingbird in January 2019, valid for 25 years. The centre of the Project has an approximate latitude of 5.093º and longitude of - 8.502º. The Dugbe F and Tuzon deposits are approximately 4km apart.

The Sackor Prospect is located 2.5km SW of Dugbe F. The Project area comprises a number of license areas that were amalgamated, the most recent of these being the Central License area.

Figure 2. Project Location in Liberia

The Project area is an undeveloped area of Liberia, with one main access road, recently upgraded by the mine, and several villages. Most people in the area engage in artisanal mining, hunting or small-scale farming. No utilities such as power and water are available. The area is primarily degraded rainforest over low rolling hills, interspersed with numerous rivers. A sizable river, the Geebo, divides the two deposits. The climate is typically tropical, with high humidity, daytime temperatures and rainfall. The nearest town of consequence is Greenville, the Sinoe County capital, which has a basic port and a palm oil processing centre, but no grid-scale utilities.

MINERAL RESOURCE ESTIMATE

SRK originally produced an MRE for Tuzon in March 2014. Without any material further exploration work, SRK updated the Tuzon MRE with an effective date initially reported as 30 July 2020, later revised to 19 August 2020 to align both deposit estimates, using SRK's 2014 model but applying updated economic parameters.

CSA produced an updated MRE for the Dugbe F deposit with an effective date of 15 July 2020. SRK reviewed the CSA MRE for Dugbe F for the purposes of the Company's Technical Report and the PEA; the effective date of the Technical Report was revised to 19 August 2020 to align both estimates.

Table 1 provides the MRE for the Dugbe Gold Project which has been prepared in accordance with the terminology, definitions and guidelines given in the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Definition Standards for Mineral Resources and Mineral Reserves (May 2014) and has been reported in accordance with National Instrument (NI) 43-101 Standards of Disclosure for