SUPERIOR GOLD EXCEEDS PRODUCTION GUIDANCE IN 2021, GROWS CASH POSITION AND TARGETS FURTHER GROWTH IN 2022

(In US Dollars unless otherwise stated)

TORONTO, Jan. 17, 2022 /CNW/ - Superior Gold Inc. ("Superior Gold" or the "Company") (TSXV: SGI) (OTCQX: SUPGF) announces detailed production results for the fourth quarter and full year 2021 and provides full year 2022 guidance for the Company's 100%-owned Plutonic Gold operations, located in Western Australia.      

Fourth Quarter Highlights

• Stope grade of 3.14 g/t gold in the fourth quarter and 3.20 g/t gold for the full year, achieving the Company's target of an average stope grade of more than 3.0 g/t gold
• Production of 20,983 ounces, an 8% increase over the prior quarter and a 32% increase over the prior year period
• Continued exploration success along the Western Mining Front¹ and the Indian Access Mining Front², with the latter including intersections of 20.4 g/t over 3.5 metres and 11.9 g/t over 4.3 metres
• Improved financial position with cash and cash equivalents increasing by $3.3 million to $23.8 million at the end of the fourth quarter
• The Company is now an unhedged producer following the delivery of the remaining ounces under call options related to the repaid Auramet gold loan

Full Year Highlights

• Safely operated through the global pandemic with zero incidences of COVID
• Exceeded full year upper end of guidance range of 65,000-75,000 ounces with production of 77,321 ounces (a 23% increase over the 63,065 ounces produced in 2020) and sales of 77,061 ounces
• Positive exploration results in 2021 support the Company's strategy of opening new mining fronts at the Western Mining Front, the Baltic Gap and at Indian Access within the Plutonic underground
• Exited the year with a strong financial position of $23.8 million in cash and cash equivalents (a 38% increase from $17.3 million on December 31, 2020) after the full repayment of the Auramet gold loan, capital expenditures necessary to improve performance and strategic commitments on an expanded underground exploration program to open new mining fronts

Chris Jordaan, President and CEO of Superior Gold stated: "We are very pleased to have exceeded our 2021 production guidance which is attributable to the actions taken on the operational front and which has led to a sixth consecutive quarter of improving gold production and cash position at our Plutonic Gold Operations. Our fourth quarter production of 20,983 ounces represents an 8% increase over the prior quarter and a 32% increase over the prior year period (Figure 1). Full year production was 77,321 ounces, a 23% improvement year over year. The strategic projects and operational initiatives that we put in place last year have resulted in a steady improvement in our performance as we delivered an average underground stope grade of above 3.0 g/t gold as well as increased our surface grades by optimizing and mining our open pits. The Company also continues to reap the benefits of block model improvements designed to better predict the spatial positioning of the ore at Plutonic. As a result, larger more productive stopes are now being identified, developed and mined. This is evidenced by the continued increase in tonnage mined from underground stopes in each quarter of 2021 with the full year stope tonnage production up 8% over 2020. Feed to the mill was augmented from additional open pit tonnage being available, which was up 6% year over year.

An operational review of several growth projects continues with an aim of enhancing Plutonic's sustainable, long-term success. These projects include, in part, a continued focus on our open pit operations with the completion of mining at Plutonic East, the commencement of mining at Perch during 2021 and the planned early entry into the main pit during 2022 (Main Pit Deeps), a product of the opportunity review conducted in Q3 and Q4 of 2021.  The higher-grade open pit feed replacing low grade legacy stockpiles in conjunction with opening new high-grade and more productive underground mining fronts are expected to result in a continued improvement in our ounce profile moving forward.

Over the course of 2021, the Company provided a number of important exploration updates that continue to point towards the identification of more productive mining fronts in the near future. Ongoing geological initiatives have improved our understanding of the mineralization at Plutonic and specifically the northwest trending faults that control the concentration of higher-grade gold mineralization.

The operational improvements implemented along with our improved understanding of the mineralization at Plutonic, combined with the full repayment of our gold loan in the second quarter, has resulted in a significant improvement in our ability to generate free cash flow. It is our view that increased production from more non-remnant underground mining areas, continued feed from the Perch open pit, early entry into the main pit as well as increased milling rates may translate to increases in cash flow in 2022 and beyond. 

In 2021, the Company delivered on the first goal of its growth strategy, namely a sustainable operation between 70,000-85,000 ounces per annum. In 2022 the Company will progress towards delivering the second goal of its growth strategy to deliver an operation of scale. The first phase of this goal is to increase production sustainably to approximately 100,000 ounces/annum by increasing production from the underground mine and mining higher grade open pit targets in Perch and Main Pit Deeps. Our 2022 guidance reflects additional investment to open new underground mining fronts identified from our successful 2021 exploration program, plus the continued development and mining of open pit targets, which is expected to result in an improvement in our grade profile. Importantly the Plutonic underground mine is expected to mine up to 30% of the ore from new areas, compared to 100% remnant mining in 2021. These investments are designed to improve on the Company's strategy to fully optimize the underground operation and when combined with the addition of new sources of open pit feed, are expected to positively contribute to the Company's overall profitability."

The Company will be releasing its complete financial and operating results for the fourth quarter and full year 2021 in March 2022.

Fourth Quarter and Full Year 2021 Production Details

Preliminary production details are summarized in the table below.

2022 Guidance

Details of production, cost and capital expenditure guidance for 2022 are summarized in the table below. It is anticipated that the first quarter will be the weakest due to a planned 14-day maintenance shutdown on the SAG mill foundation. It is however expected that production will progressively improve as the Company increases production tonnages from the underground and accesses higher grade open pit material from Main Pit Deeps. Main Pit Deeps will bring forward ounces from the Preliminary Economic Assessment (completed in December 2020) without jeopardizing the full Main Pit Pushback project. As a result, the Company aims to increase the annualised production rate to 100,000 ounces/annum in the second half of 2022.

With improved production, costs are expected to reduce further. In addition, exploration investment is expected to increase as the Company accelerates its exploration in new mining fronts as well as surface targets. Capital spend is set to increase relative to 2021 as the Company proceeds with investments in operations to unlock additional value.

Expanding into New Mining Fronts

During the fourth quarter of 2021, the Company continued with its underground exploration drilling program.  It provided an exploration update for the Western Mining Front and the Indian Access Mining Front, both containing important high-grade drill results from its underground drill program. The drilling program is a key component of the Company's strategy to expand into new underground mining fronts, improve mining grades and productivity, and reduce reliance on remnant mining.

The drill results released on November 29, 2021, and December 13, 2021, showed continued extensions and infill drilling of the Western Mining Front from the Caspian zone, down through the Indian and Baltic zones to the Baltic extension (covering up to a 1.6-kilometre-long northwest extension of the Western Mining Front) and the Indian Access Mining Front. The results from these news releases support the hypothesis that the highest grades at Plutonic are controlled by the northwest trending faults. In addition, the location of both mining fronts are adjacent to existing underground infrastructure, thus requiring minimal capital expenditures to infill drill and develop the areas.

Key results such as drill hole UDD24581, which intersected 53.6 g/t gold over 2.7 metres, drill hole UDD24589A, which intersected 11.9 g/t gold over 7.6 metres, and drill hole UDD24725, which intersected 20.4 g/t gold over 3.5 metres, and drill hole UDD24555, which intersected 11.9 g/t gold over 4.3 metres give the Company further confidence in mining higher grades at Plutonic in the future.³  The results announced throughout 2021 support the Company's view that the Western Mining Front and Indian Access Mining Front are potentially important new areas for future production at Plutonic. The Company expects to provide additional exploration updates over the coming months in 2022.

Appointment of Vice President, Investor Relations

The Company is pleased to announce the appointment of Mr. Mike McAllister, CPIR, to the position of Vice President Investor Relations. Mr. McAllister has over 18 years of experience working with public mining companies, the last 11 as a mining specialized investor relations and corporate development professional. He previously worked for Sierra Metals where he helped the Company complete the dual US listing progress and helped see the Company progress from a small to a mid-tier diversified producer. Mr. McAllister also has worked at Avion Gold Corp., acquired by Endeavour Mining. Previously, Mr. McAllister worked at BMO Capital Markets in the Metals & Mining Group. Mr. McAllister holds the Certified Professional Investor Relations (CPIR) designation completed at the Ivey School of Business, University of Western Ontario.

The Company will grant Mr. McAllister, subject to the terms and conditions of its Stock Option Plan and the receipt of regulatory approval, options to purchase 150,000 common shares of the Company within a five-year term.

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.

Web: www.superior-gold.com | Twitter: @SuperiorGoldInc | Facebook: SuperiorGoldInc | Instagram: SuperiorGoldInc | LinkedIn: Superior Gold Inc.

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.

Forward Looking Information

This news release contains "forward-looking information" within the meaning of applicable securities laws that is intended to be covered by the safe harbours created by those laws. "Forward-looking information" includes statements that use forward-looking terminology such as "may", "will", "expect", "anticipate", "believe", "continue", "potential" or the negative thereof or other variations thereof or comparable terminology. Forward-looking information includes information with respect to guidance as to projections, outlook, guidance, forecasts, estimates, and other statements regarding future or estimated financial and operational performance, gold production and sales, revenues and cash flows, and capital costs (sustaining and non-sustaining), including projected cash operating costs and all-in sustaining costs) as well as statements with respect to the mine-plan, exploration, drilling, operating and organizational matters and activities relating to the Plutonic Gold Operations and the Company generally, including its liquidity and capital requirements and financial results. By identifying such information in this manner, the Company is alerting the reader that such information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information.

Forward-looking information is not a guarantee of future performance and is based upon a number of estimates and assumptions of management at the date the statements are made. Furthermore, such forward-looking information involves a variety of known and unknown risks, uncertainties and other factors which may cause the actual plans, intentions, activities, results, performance or achievements of the Company to be materially different from any future plans, intentions, activities, results, performance or achievements expressed or implied by such forward-looking information. Readers are encouraged to refer to the Annual Information Form of the Company for a discussion of other risks including outbreaks or threats of outbreaks of viruses, other infectious diseases or other similar health threats, such as the novel coronavirus outbreak, which could have a material adverse effect on the Company by causing operational and supply chain delays and disruptions, labour shortages, shutdowns, inflationary pressures on operating or capital costs, the inability to sell gold, capital markets volatility or other unknown but potentially significant impacts. The Company cannot accurately predict what effects these conditions will have on the Plutonic Gold Operations or the financial results of the Company, including uncertainties relating to travel restrictions to the Plutonic Gold Operations or otherwise and business closures that have been or may be imposed by governments. If an outbreak or threat of an outbreak of a virus or other infectious disease or other public health emergency occurs, it could have a material adverse effect on the Company's business, financial condition and results of operations.

The Company cautions that there can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, investors should not place undue reliance on forward-looking information as no assurance can be given that any of the events anticipated by the forward-looking information will transpire or occur, and if any of them do so, what benefits the Company will derive therefrom. Except as required by law, the Company does not assume any obligation to release publicly any revisions to forward-looking information contained in this news release to reflect events or circumstances after the date hereof. Neither the TSX Venture Exchange not its Regulation Services Provider (as that term is defined in the policies of the Exchange) accepts responsibility for the adequacy or accuracy of this release.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Exchange) accepts responsibility for the adequacy or accuracy of this release.

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