Operational update September 2016

This operational update further develops the information provided in press release 13/2016, dated June 9, 2016, 14/2016 dated July 26, 2016 and 16/2016 dated August 31, 2016.

KRASNY CENTRAL AND KRASNY NORTH EXPLORATION RESULTS
Drilling of the Stage 3 exploration program was commenced in April 2016, and, so far, 53 drill holes, accounting for 11,370 meters of core drilling, are completed. In addition, 1,965 meters of trench sampling are done. In total, 11,256 fire assay tests for gold have been received (see Table 1 in the Attachments for mineralized intervals above 0.4 g/t cut-off grade).

Most of the drilling activities during August and early September were focused on collection of rock for development of a mineral processing flow chart as part of the feasibility studies (see Figure 4 in the Attachments for the map of the exploration activities on the Krasny Central). The drilling for the processing test is now completed, and a bulk sample that proportionally represents all types of mineralized ore within the contour of the modelled open pit for the Upper structure has been accumulated. The sample, which is fairly representative for the Upper Structure, amounts to 3,259 kg and the average gold grade turned out to be 1.77 g/t, which is positively somewhat higher than the average gold grade for the Upper Structure according to the previous resource estimations. The processing test will commence shortly and be completed by early 2017. The mineral processing flow chart for Krasny will be developed as a result of this processing test.

Drilling was also done as part of the Feasibility Studies to prove the choice of exploration grid in the Central part of Krasny Upper mineralization. This means that a limited area was drilled with a denser drilling, where the distance between the drill holes is 20 meters instead of the 40 meters which is the case in the common grid. If these results confirm the continuity of the mineralization and the modelling, the common grid has been verified and thus an upgrade of the resource category would be possible.

Krasny central
The intermediate results from Krasny Central continues to be very positive with the exploration drilling confirming a further strike extension of the Lower mineralization. On the western flank within Profile 38, the exploration hole #141752 intersects the Lower mineralization for 120 meters, including intervals of 21 meters with an average gold grade of 1.949 g/t, 10.4 meters with an average gold grade of 3.746 g/t and 27 meters with an average gold grade of 1.847 g/t (See Table 1 in the Attachments for more details). This extension was further confirmed by hole #141751, drilled in the same profile. Previously, Profile 40 was the most western drill intersection confirming the mineralization, but with these new results, the Lower Mineralization is extended to the West for 86 meters along the strike (see cross section along Profile 38 in Figure 6 in the Attachments).

On the Eastern flank, the mineralization is extended as well. Exploration hole #141750, drilled in Profile 53, intersects the Lower mineralization for 150 meters, including intervals of 7.5 meters with an average gold grade of 5.985 g/t and 14 meters with an average gold grade of 1.867 g/t. Hole #141754, drilled in Profile 55 located further 80 meters to the East compared to profile 53, also intersects the same extension of the Lower Mineralization. In this case, the intersection accounts for 125 meters, including intervals of 33 meters with an average gold grade of 3.35 g/t and 11 meters with an average gold grade of 3.44 g/t. Previously, Profile 51 was the most eastern drill intersection confirming the mineralization, but with these new results, the Lower Mineralization is extended to the East for 160 meters along the strike (see cross section along Profile 53 and Profile 55 in Figure 8 in the Attachments).

These promising drill results both on the western and eastern flanks of the Krasny Lower mineralization will add new resources to the Krasny project. As presented in Figure 7 in the Attachments, showing the long section of the Krasny Central mineralization along the strike, the recently discovered extensions of the Lower Mineralization go outside the previous projection of the open pit, which will be redefined to reflect these new results during the new resource modelling later this year. We believe that the total minable resources of the Krasny project will increase as a result of the recently discovered extensions of the Lower Structure.

Krasny North
Following the encouraging results from previous exploration on the Krasny North mineralization, we proceed with both trench sampling and drilling (see Figure 5 in the Attachments for the for the map of the exploration activities on the Krasny North). Two additional drill holes, #141708 and #141709, have been completed within Profile 186 during August - September and assay test results received (see Figure 9 for the cross sections along Profile 180 and Profile 186 in the Attachments). Both new holes intersected a gold mineralization, thus confirming the exploration potential of the Krasny North. So far, the Krasny North mineralization is confirmed along the strike for 200 meters between the drill profiles 180 and 186, and for 95 meters down dip. The thickness of the mineralization varies from 6 to 30 meters with an average gold grade of around 1.5 g/t. We see indications for a further increase of the mineralization along the strike, since numerous samples with visible gold nuggets have been recorded within trench #143610 in Profile 176 which is located 160 meters to the West from Profile 180 (see Figure 5 in the Attachments). We are expecting the assay results from this trench shortly. We also see that the mineralization is open down dip. The exploration within Krasny North is proceeding with the target to preliminary identify the resources of Krasny North by the end of 2016. We believe that the Krasny North will make an excellent supplement to the Krasny Central and enhance the economics.

Based on Stage 3 exploration results on Krasny we are glad to report the following most significant mineralized intervals (at cut-off grade 0.4 g/t) - 41 meters with average grade of 4.71 g/t and 25 meters with average grade of 2.02 g/t in the hole #141748, 7.5 m @ 5.984 g/t (hole #141750), 56 m @ 2.13 g/t (hole #141747), 19 m @ 2.588 g/t and 28 m @ 1,611 g/t (hole #141744), 40 m @ 2.28 g/t (hole #141751), 13 m @ 3.94 g/t and 15 m @ 1.89 g/t and 14 m @ 3.59 g/t (hole # 141481), 23 m @ 1.58 g/t (hole #141678), 31 m @ 1.39 g/t (hole # 141746), 22 m @ 1.514 g/t (hole #141610), 7 m @ 3.493 g/t (hole #141612), 43.5 m @ 2.049 g/t (hole #141482), 83 m @ 2.294 g/t (hole #141483), 8.6 m @ 4.515 g/t (hole #141485), 21.5 m @ 1.949 g/t and 10.4 m @ 3.746 g/t (hole #141752), 33 m @ 3.35 g/t and 11 m @ 3.44 g/t (hole #141754). See Table 1 in the Attachments for more assay data for the drilled boreholes.

NORTHERN TERRITORIES AND KOPYLOVSKOYE PROJECTS
We are pleased with the first results received from the exploration activities on the Northern Territories project. The stream sediment survey on the project is moving according to schedule. Field operations are expected to be finalized in early October and so far, some 4,600 samples out of the planned 5,500 have been collected, of which 3,525 samples have been sent to the laboratory for analysis and 1,258 test results have been received. The Northern Territories project consist of six licenses and the results received are covering parts of the licenses "Malo-Patomsky" and "Gorbylyakh". Based on a preliminary review of the analytical results, we have already identified several potential clusters for follow up exploration, see Figure 10 in the Attachments. The most interesting target is located in the east of the Malo-Patomsky license and is marked with number 1. This gold anomaly was never reported previously and has a vast size of 3 by 5 kilometers. Gold was identified in sediments along 5 streams within this target indicating the presence of a big source of bedrock gold nearby. When the laboratory results for all samples have been received, the data will be further statistically examined to identify boundaries of gold anomalies, and further research will be done on the origins of potential underlying bedrock gold mineralizations. These results confirm our high expectations over the exploration potential of the Northern Territories project.

Within the Kopylovskoye project, we are waiting for the forestry logging permits to be issued shortly in order to file papers to obtain mining permits for the Kopylovskoye license to update and extend the license terms and run a bulk sample test to confirm historic grades and volume of mineralization. The permits are expected to be issued during September-October 2016. The mining plan has been already developed.

NEXT STEPS
We forecast the following events during the next few months: 

• Release full Krasny JORC report
• Complete the 2016 Krasny Exploration and Development Program by November 2016
• Release results of the 2016 Krasny exploration program by the end of 2016
• Release results of Northern Territories geochemical survey by the end of 2016

Operation updates will be released on a regular basis.

For the complete press release including tables, images and maps see attached document.

För pressmeddelande på svenska se bifogat dokument (Swedish).

Stockholm, September 26, 2016

For more information, please contact:
Mikhail Damrin, CEO, +7 916 808 12 17, [email protected]
Tim Carlsson, CFO, + 46 702 31 87 01, [email protected]

The following documents can be retrieved from beQuoted
Kopy Goldfields Pressrelease 2016-09-26 English.pdf
Kopy Goldfields Pressrelease 2016-09-26 Svenska.pdf

This information is information that Kopy Goldfields is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 11.00 am CEST on September 26, 2016.

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