NWST.V · 2017-04-03 12:00:00

Serengeti Announces Positive PEA Results: 21% IRR Pre-tax for Kwanika Copper-Gold Project

Economic Studies

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NR: 2017-04

Serengeti Announces Positive PEA Results:

21% IRR Pre-tax for Kwanika Copper-Gold Project

Vancouver, B.C., April 03, 2017: Serengeti Resources Inc. (SIR: TSX-V; 34S: FSE) announces the completion of an

independent NI 43-101 compliant Preliminary Economic Asse ssment (“PEA”) for its 95% owned Kwanika copper-gold porphyry

project located in the Quesnel Trough of North-Central British Columbia, Canada. The results of the PEA demonstrate the

potential technical and economic viability of establishing a new copper-gold mine and mill complex on the property.

PEA Highlights:

- Pre-tax NPV7% of CDN $324 million, 21.1% IRR, 15 year mine life.

- Life of mine (LOM) metal production of 601 million pounds copper, 676,30 0 ounces gold, and 2.66 million ounces

silver in concentrates.

- Annual metal production of 50.4 million pounds of copper, 70,100 ounces of gol d, and 181,100 ounces of silver in

concentrates for the first eight years.

- Initial capital cost of CDN $476 million plus LOM sustaining capital of $37 million for a 15,000 tpd (5.4 million tpa)

mill and combined open pit, underground mining operation.

- Projected C1 (Direct cash cost of production per pound of copper net of gold, silver credits) of US$0.70/lb/Cu for

first eight years or US$1.20/lb LOM

“We are very pleased to have achieved this important milestone for the Kwanika project.” commented David W. Moore, Serengeti

President & CEO. “Kwanika represents an opportunity to develop a midsize green field copper-gold project in an excellent location

and proven jurisdiction. Furthermore there remains excellent potent ial to expand and upgrade the resources considered in this

study, both in the Central and South Zones. The results of this PEA have conf irmed what the partner ship believed was the

possibility for higher grade production from the Central Zone at Kwanika and the resultant posit ive impact on project economics .

Given the economic value we have demonstrated in this PEA, we expect our partners Daewoo Minerals Canada will elect to fund

the next $7 million expenditure to earn an additional 30% interest in the project and we look forward to working with them in

advancing the Kwanika project towards production” stated Moore.

PEA BASE CASE ECONOMIC RESULTS

Parameter Unit Base Case

Capital Cost CDN$ M $476

Sustaining Capital LOM CDN$ M $37

Average Op Cost/tonne CDN$ $21.15

Pre-Tax Net Revenue CDN$ M $710.1

Pre-Tax NPV7% CDN$ M $324.4

Pre-Tax IRR and Payback 21.1% and 3.7 years

Post-Tax Net Revenue CDN$ M $475.1

Post-Tax NPV7% CDN$ M $191.2

Post-Tax IRR and Payback 16.6% and 4.0 years

Metal Price Cu US$/lb $2.90

Au US$/oz $1,270

Ag US$/oz $19.00

Exchange Rate US$/CDN$ 0.77

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PEA SUMMARY PRODUCTION STATISTICS

Category Units First 8 Years LOM

Tonnes Milled Kt 43,201 78,855

Average Grade Cu % 0.466 0.381

Au g/t 0.539 0.357

Ag g/t 1.391 1.398

Metal Production Cu M lbs 403.462 600.635

Au Moz 0.561 0.673

Ag Moz 1.449 2.659

Throughput tpd 15,000

Mine Life Yrs 15

Net Cash Cost of

Production (C1)* per lb Cu US$ $0.70 $1.20

* Net Direct Cash Cost (C1) is an industry standard measure that represents the cash cost incurred at each processing stage, fr om mining through

to recoverable metal delivered to market, less net by-product credits.

Direct Cash Costs cover: Mining, ore freight and milling cost s; Mine-site administration and general expenses; Concentrate frei ght, smelting and

smelter general and administrative costs; Marketing costs (freight and selling).

Gold, Silver credits contribute 64.3% to revenue in the first eight years or 53.0% LOM at the Kwanika project.

The PEA prepared by Moose Mountain Technical Services (“MMTS”) is based on the resource model presented in the December

2016 NI43-101 technical report titled “Independent Technical Report for the Kwanika Copper-Gold Project Canada”, authored by

SRK Consulting (Canada) Inc. (See NR 2017-01, January 4 th, 2017 or access the report through www.sedar.com for full details).

SRK’s Resource Estimate used a confining pit and underground shapes to define contiguous mineralization with reasonable

prospects for eventual economic extraction. The resource therein is shown in the following table:

MINERAL RESOURCE STATEMENT* KWANIKA CENTRAL ZONE

Category

Quantity Grade Contained Metal

(x1000

Tonnes)

(%)

(g/t)

(%)

(000's lb)

(000's oz)

(000's lb)

Inferred 33,300 0.26 0.08 1.64 0. 01 191,400 80 1,760 7,470

* Pit constrained mineral resources are reported in relation to a conceptual Whittle pit shell and underground resources are re ported within the

area for potential underground development. Mineral resources are not mineral reserves and do not have demonstrated economic vi ability. All

figures are rounded to reflect the relative accuracy of the estimate. All composites have been capped where appropriate.

** Pit constrained mineral resources are repor ted at a copper equivalent cut-off of 0.13% and underground resources are reporte d at 0.27%. The

cut-offs are based on prices of US$3.00 per pound of copper, US$1,300 per ounce of gold, US$20 per ounce of silver, US$9.00 per lb of

molybdenum and assumed recoveries of 89% for copper, 70% for gold, 75% for silver, and 60% for molybdenum.

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The MMTS mining study has focused on a higher grade core of the deposit and delineated combined open pit and underground

designs on the Central and South zones as follows:

Open Pit in Central and South zones

Zone Category Tonnage Cu Au Ag

(Kt) (%) (g/t) (g/t)

Central Indicated 11,752 0. 372 0.387 1.076

Inferred 208 0.278 0.170 0.785

South Inferred 24,819 0.265 0.076 1.630

Note: NSR cut-off used is Cdn$11.90/tonne with a provision for mining loss of 5% and dilution of 2%

Underground Delineated Resource on the Central zone as follows:

Zone Category Tonnage Cu Au Ag

(Kt) (%) (g/t) (g/t)

Block Cave Indicated 41,410 0. 455 0.522 1.364

Inferred 666 0.271 0.168 0.720

Note: To account for mining loss and dilution all material within the within stope shapes are included with no cut-off grade applied

The mine plan generates the following throughput over the 15 year operating mine life.

Mine Production /

Total tonnes milled (Kt) Cu (%) Au (g/t) Ag (g/t)

First 8 Years* 43,201 0.466 0.539 1.391

LOM 78,855 0.381 0.357 1.398

* Included in the LOM quantities

All mineralized material classified as Indicated (67%) and Inferred (33%) Mineral Resources has been considered in the

mine plan. The PEA is preliminary in nature and it includes inferred mineral resources that are considered too

speculative geologically to have the economic consideration applied to them that would enable them to be characterized

as mineral reserves. Mineral resources that are not mineral reserves, do not have demonstrated economic viability and

there is no certainty that the results of the PEA will be realized.

Economic Analysis

Economic evaluations were generated incorporating forecasts for metal prices and US$/CDN$ exchange rate. The Base Case is a

medium term forecast meant to be comparable to other recent Canadian projects. The Spot Price case is from March 1, 2017, and

the Alternate Case is 10% above the Base Case. Results are shown in the following table:

Parameter Unit Base Case Spot Price Alternate

Metal Price

Copper US$/lb 2.90 2.71 3.19

Gold US$/oz 1,270 1,258 1,397

Silver US$/oz 19.00 18.47 20.90

Exchange Rate US$/CDN$ 0.77 0.75 0.77

Economic Results (Pre-Tax)

Net Revenue CDN$ M 710.1 635.3 1,040.5

NPV5% CDN$ M 411.1 361.7 635.3

NPV7% CDN$ M 324.4 282.0 519.1

NPV8% CDN$ M 286.5 247.0 468.4

NPV10% CDN$ M 219.9 185.6 379.5

IRR % 21.1 19.6 27.8

Payback years 3.7 3.9 3.0

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Parameter Unit Base Case Spot Price Alternate

Economic Results (After-Tax)

Net Revenue CDN$ M 475.1 426.2 692.0

NPV5% CDN$ M 255.2 222.49 404.2

NPV7% CDN$ M 191.2 162.7 321.4

NPV8% CDN$ M 163.2 136.6 285.3

NPV10% CDN$ M 113.9 90.6 221.8

IRR % 16.6 15.3 22.1

Payback years 4.0 4.2 3.3

Project Development Plan

The proposed project is to develop a green-fields copper-gold-s ilver deposit with a combination of open pit and block cave

underground mining for the Central Zone and open pit mining for the South Zone combined with conventional milling and flotation

concentration methods. The production rate assumed is 15,000 tonnes per day with a forecast mine life of 15 years. Mineral

concentrate would be trucked approximately 190 kilometers to a ra il load-out facility in Fort St. James, rail to Prince Rupert, and

ocean transport to Asian smelters. Forestry Service Roads an d the existing Kemess mine power line which is connected to the

power grid, are in the local area which reduces the offsite infr astructure costs. A traditiona l tailings storage facility (TSF ) will be

augmented by using all open pit waste to buttress the dam to incr ease the factor of safety and a separate water storage dam and

water treatment plant are included, so that surplus water can be discharged safely to the environment and not stored in the TSF.

Forecast mine production statistics are summarized in the following table:

Metal

First 8 Years

Grade Recovery

% Total Metal Production Annual Metal Production

Copper (%) 0.466 91 403,462 K lbs 50,433 K lbs

Gold (g/t) 0.539 75 561.2 K oz 70.1 K oz

Silver (g/t) 1.391 75 1,449 K oz 181.1 K oz

Metal

LOM (Life of Mine)

Grade Recovery

% Total Metal Production Annual Metal Production

Copper (%) 0.381 89/91 600,635 K lbs 40,042K lbs

Gold (g/t) 0.357 70/75 676.3 K oz 45.1 K oz

Silver (g/t) 1.398 75 2,659 K oz 177.3 K oz

Assumed capital and operating costs for the operation are as follows (in CDN$):

- Initial capital of $476.2 million including open pit pre-strippi ng mining costs, the start of underground access development ,

and construction of the processing plant, site infrastructure, construction of a tailings storage facilty, access and power with

a contingency of $61.0 million

- LOM sustaining capital cost of $ 36.6 million is predominately for underground equipment when the Block Cave production

starts early in the operating schedule. Ongoing underground development is in cluded in operating costs. An additional

$46.3 million is also included in operating costs for final recl amation and closure. Future studies will develop a more cost

effective allocation of the costs of these activities, when more project details from the environmental studies, permitting

obligations, and progressive reclamation details are known.

Open pit operation and equipment will be contractor supplied and well as underground development. Underground operations will

be an owners’ team for mucking and hauling from the extraction level of the Block cave.

- Total weighted operating cost of $21.15/ tonne processed including: open pit mining $2.97 / tonne mined; LOM open pit

strip ratio of 1.69, underground block cave mining $11.73 / tonne mined; mill and tailings $9.00 / tonne; G&A $1.95 / tonne

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Recommendations for Further Work and Opportunities to Enhance Value

The independent consultants have recommended advancing the projec t to a higher level of study leading to a Pre-Feasibility

Study and eventually to a Feasibility Study. The immediate wo rk will require field work and data gathering for Pre-Feasibility

engineering and baseline environmental studies in preparation for consultation with First Nations, sustainability discussions w ith

local stakeholders and preparations for permit applications with re gulators. This will include additional drilling to improve t he

modelled resource classification, geotec hnical drilling, starting long duration wast e rock characterization studies, and backgr ound

environmental field surveys.

Furthermore as demonstrated by K-177 drilled in the course of the 2016 program, potential exists to significantly increase gold

and to a lesser extent, copper grades, within the high grade dom ain of the Central Zone by drilling additional holes oriented

perpendicular to the deposit’s E-W long axis. K-16-179 also opened up the NW corner of Central Zone for expansion and

deepening of this hole is recommended along with additional dri ll holes in this area. Finally the recent mine modelling as part of

the PEA has demonstrated that several areas of better grade exist below the currently planned South Zone pits which with

additional drilling could be brought into a future mine plan.

Daewoo Deal Terms

This PEA was completed as part of a program funded by Daew oo Minerals Canada, whereby Daewoo earned a 5% project

interest by paying Serengeti $400,000 and spending $800,000 on the project within the first year. Daewoo may earn an additional

30% interest in the project, by electing within 90 days of comp letion of the PEA report, to fund an additional $7 million over the

next two year period. Serengeti remains as project operator and is entitled to charge a 10% operator fee on expenditures beyon d

the initial $1.2 million. Serenget i is entitled to an NSR royalty if its project interest is diluted below 50% and also retain s the right

to enter into precious metal streaming transactions subject to certain off-take rights to Daewoo ( see NR 2016-03, April 6 th, 2016

for full details).

National Instrument 43-101 Disclosure.

The Kwanika PEA was prepared by Moose Mountain Technical Se rvices (MMTS) under the direction of Jim Gray, P.Eng., a

Qualified Person (as defined under National Instrument 43-101) who is independent of Serengeti and has reviewed and approved

this news release. Marek Nowak, P. Eng. and Chad Yuhasz, P. Geo. of SRK Consulting (C anada) completed the NI 43-101

resource assessment report included in this PEA and are Qualified Persons and independent of Serengeti .

Experts contributing to this study include AMEC Consulting wh o produced a Caveability Assessment of the Kwanika Project and

SGS Metallurgical Services Ltd. who have conducted a preliminary metallurgical test program on the Central Zone.

An updated national Instrument 43-101 Technical Report on the Kwanika Project describing the results of the PEA will be filed on

SEDAR and be available on Serengeti’s website at www.serengetiresources.com within 45 days.

David W. Moore, P.Geo., Serengeti Resources Inc. President & CE O is the Company’s designated QP for this news release and

has reviewed and validated that the information contained in the release is consistent with that provided by the QP’s responsible

for the PEA.

About Serengeti Resources Inc.

Serengeti is a mineral exploration company managed by an experi enced team of professionals with a solid track record of

exploration success. The Company is cu rrently advancing its Kwanika copper-gold project in partnership with Daewoo Minerals

Canada and exploring its extensive portfolio of properties in the highly prospective Quesnel Trough of British Columbia. A number

of these other projects are available for option or joint venture and additional information can be found on the Company’s website

at www.serengetiresources.com.

ON BEHALF OF THE BOARD

David W. Moore, P. Geo., President, CEO and Director

Cautionary Statement

This document contains “forward-looking statements” within the meaning of applicable Canadian secu rities regulations. All stat ements other than

statements of historical fact herein, including, without limitat ion, statements regarding exploration plans and other future pl ans and objectives, are

forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate

and future events and actual results could differ materially from those anticipated in such statements. Important factors that could cause actual

results to differ materially from our expectations as well as a comprehensive list of risk factors are disclosed in the Company ’s documents filed

from time to time via SEDAR with the Canadian regulatory agencie s to whose policies we are bound. Forward-looking statements a re based on

the estimates and opinions of management on the date the statem ents are made, and we do not undertake any obligation to update forward-

looking statements should conditions or our estimates change, other than as requir ed by law and readers are further advised not to place undue

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reliance on forward-looking statements. The information in this News Release related to the Kwanika Copper/Gold Project was de rived from the

PEA. Statements pertaining to projected revenues and cash flow s, quantity and grade of mineralized materials, estimated mineral prices are

forward-looking statements. The Compan y cautions that this PEA is preliminary in nature, and is based on technical and econom ic assumptions

which will be evaluated in further studies. The PEA is based on t he current (as at January 2017) Kwanika estimated resource mo del, which

consists of material in both the indica ted and inferred classifications. Inferred mi neral resources are c onsidered too specula tive geologically to

have technical and economic consi derations applied to them. The current basis of project information is not sufficient to conv ert the mineral

resources to mineral reserves, and mineral resources that ar e not mineral reserves do not have demonstrated economic viability. Accordingly,

there can be no certainty that the results estimated in the PEA will be realized.

Neither the TSX Venture Exchange nor its Regulation Services Provider accepts responsibility for the adequacy or accuracy of this release.

For further information, please contact:

Investor Relations: Paradox Public Relations Tel: 514-341-0408 Toll free (in North America) 1-866-460-0408

Email [email protected]

Serengeti Resources Inc. 520 – 800 West Pender St., Vancouver, BC V6C 2V6

Tel: 604-605-1300 Email: [email protected] Website: www.serengetiresources.com

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