Black Dragon Gold Releases Update to Shareholders

We are in the process of selecting a Board of Directors and management team for our Spanish subsidiary and operating company in Spain. It is critical that the project is operated as a Spanish and Asturias-based project with an extensive local presence, and we have taken great measures to identify candidates that have the necessary expertise and are sensitive to the needs of the local communities. Our local Spanish team will be administering the project, handling the day to day operations and providing accessible and effective community relations. Black Dragon’s technical team will join where required and provide assistance to the local management team with the support of the executive directors and management of Black Dragon.
The Company’s executive directors, technical and corporate team expects to spend significant time connecting with the Spanish team and collectively engaging with the stakeholders in Asturias and Tapia in Q1 2017. The executive directors will continue to spend significant time in Spain on an ongoing basis, working with the authorities and stakeholders to ensure the project supports and ultimately becomes an integral part of the community.
We have set up a temporary website, www.fenixmineriaoro.es, from which the community can contact management and discuss any issues or concerns as and when they arise. We will update the website as we progress with consultations.

Recapitalising the Company
As previously announced, management has been reviewing the financing options with a view to balancing the Company’s requirement to ensure it is sufficiently capitalised to be able to focus its resources on fast tracking to production and maximising the value to shareholders.
The Company’s priority is repaying the reduced workout of the RMB debt to clear the burden on the balance sheet and re-focus on the project. The Company exercised the option agreement, as negotiated by Lionsbridge, in December 2016 and expects to close the definitive RMB agreements on or before 20 January 2017. The repayment of the RMB debt will facilitate the project financing which is expected in Q3-Q4 2017. Management is in discussion with potential project financiers to fast track this process.
Completing the Feasibility Study 
As previously announced, there are considerable resources available for the Feasibility Study with the majority of the studies underlying reports completed. Furthermore, we have engaged TetraTech to complete the feasibility study. The TetraTech mandate is to work with the Company with input from our Spanish legal counsel, Herbert Smith Freehills, technical advisor Westech International, the relevant Spanish permitting authorities and stakeholders to finalise a final project design that addresses the concerns of all parties while maximising the value for shareholders. The completed reports will then form the basis of the study which is expected to be published in Q2-Q3 2017. Much of the technical work completed to date has been published by the following groups:

As announced in the prior update to shareholders, the Salave project is the largest undeveloped Gold deposit in Europe with significant intrinsic value. Management’s view on the project is supported by:

The Technical Information disclosed in this news release has been reviewed and approved by Douglas Turnbull, P.Geo., a Qualified Person as defined under National Instrument 43-101.”