Orvana Reports Q1 2018 Financial Results; El Valle Transition to Higher Gold Grade Oxides Underway

• El Valle – Ramp up of oxides production continues:
• The proportion of higher gold grade oxide production delivered to the mill from the El Valle Mine increased to 37%, up from 24% in the second half of fiscal 2017. The Company continues to target a ratio of 50% oxides to skarns delivered to the mill by mid-2018.
  
  
• Production shortfalls were experienced in the first quarter due to fleet availability and the failure in the mine's ventilation system, as well as an unexpected build-up of in-process gold in the plant circuit. A number of process changes in the mine and plant, in addition to maintenance investments, are expected to allow El Valle to attain its stated production guidance for the remainder of the fiscal year.

• Don Mario – Consistent performance:
• Don Mario continued to generate consistent results from its carbon-in-leach circuit, producing 12,388 ounces of gold with recovery rates averaging 85.8% in the quarter.
  
  
• Pre-stripping activities at the Company's nearby Cerro Felix gold deposit commenced during the first quarter. The Company is aiming to begin production from the Cerro Felix deposit starting in the third quarter of fiscal 2018.

Juan Gavidia, Interim CEO stated, "Our Don Mario operation continues to deliver consistently strong results from LMZ ore processed through its carbon-in-leach circuit, and we look forward to maintaining this trend with ore from our nearby Cerro Felix gold deposit shortly. At El Valle, our ramp up of higher gold grade oxide production continues, though on a longer timeframe than initially planned. The challenges that we experienced at El Valle in Q1 are in the process of being resolved. Our updated planning for the balance of fiscal 2018 indicates that a portion of our first quarter shortfall will be recovered over the remainder of the fiscal year, bringing annual production and costs in line with our guidance."

Strategy and Outlook

The Company continues to pursue its objectives of optimizing production, lowering unitary cash costs, maximizing fee cash flow, extending the life-of-mine of its operations and growing its operations to deliver shareholder value.

El Valle

At El Valle, the primary objective in fiscal 2018 continues to be replacing mined skarn tonnes with higher gold grade oxides in order to bring the proportion of oxide ore processed in the plant up to a target of 50%, thereby substantially increasing ore grades delivered to the mill and increasing gold ounce production. Through additional geological and geotechnical work, the Company also expects to significantly increase the reliability of the mine plan by minimizing the proportion of inferred material in its mine planning and taking additional measures to address grade variability. Infrastructure and fleet maintenance investments to improve productivity and efficiency will continue to be made through fiscal 2018 as planned. It is anticipated that these actions will also positively impact El Valle's unitary costs in fiscal 2018.

Don Mario

At Don Mario, the Company continues to produce consistent results from its re-commissioned CIL circuit, producing an average of over 12,000 ounces of gold per quarter from the Lower Mineralized Zone. Don Mario continues to pursue realization of a number of known opportunities for mine life extension. In the near term, the Company expects to commence pre-stripping activities at Cerro Felix in the first quarter of fiscal 2018, and intends to transition its mine production to this satellite deposit following the depletion of the LMZ, expected in mid-fiscal 2018. The Company has also been evaluating opportunities to further extend the life of Don Mario, including processing existing mineral stockpiles, potential mining of the Company's Las Tojas deposit, potential mining of the UMZ bottom pit and reprocessing gold bearing tailings.

While maintaining its focus on optimizing current operations, the Company will also evaluate strategic alternatives that could serve to transform the profile of the Company.

FY 2018 Production and Cost Guidance

Selected Operational and Financial Information

			Q1 2018	Q4 2017	Q1 2017	FY 2017
Operating Performance
Gold
	Production (oz)		23,172	27,666	15,699	90,292
	Sales (oz)		21,995	29,639	14,060	88,636
	Average realized price / oz		$1,269	$1,268	$1,260	$1,258
Copper
	Production ('000 lbs)		2,759	3,601	3,588	13,893
	Sales ('000 lbs)		2,700	3,850	3,598	14,686
	Average realized price / lb		$2.82	$2.74	$2.32	$2.50
Financial Performance (in 000's, except per share amounts)
Revenue			$34,170	$46,156	$23,458	$137,999
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