Telson Resources Inc (TSXV:TSN, OTCBB:SOHFF) is very pleased to announce the successful startup of pre-production development mining and processing at its 100% owned Campo Morado mine located in Guerrero, Mexico. Pre-production test milling operations started on October 14, 2017 and the mill has run continuously on a 24 x 7 basis, 71 out of 74 available days through to December 31, 2017, for a 96% operational efficiency. Mining and milling pre-production operations have continued from January 1, 2018 and currently remain in continuous 24 x 7 operations.

During the 2 1/2 months of pre-production operations in 2017, underground development mining at Campo Morado produced 110,414 tonnes of mineralized development material and the test milling processed 106,655 tonnes of this material at an average rate of 1,502 tonnes per day. The processing rate started at approximately 1,400 tonnes per day and ramped up to approximately 1,800 tonnes per day by the end of the period. The average head grade of this development pre-production material was 3.57% zinc, 0.38% copper, 0.85% lead, 0.83 g/t gold and 103 g/t silver.

From the above milled material, the Company produced 5,021 tonnes of zinc concentrate grading: 44.09% zinc, 1.18% copper, 1.67% lead, 1.04 g/t gold, 502 g/t silver and 2,013 tonnes of lead concentrate grading: 12.86% lead, 6.44% zinc, 2.55% copper, 4.21 g/t gold, 500 g/t silver.

Telson advises that the results achieved to date are within management’s expectations, noting that mining development material is dilutive resulting in lower head grades than will be targeted for stope mining upon completion of mine development work. Additionally, test milling and processing results are steadily improving during the Campo Morado mill re-commissioning and startup phase.

Current average metal recoveries achieved for the produced pre-production concentrates outlined above are as follows: 58.2% zinc, 14.8% copper, 9.2% lead, 5.9% gold, 22.9% silver recovered within the zinc concentrate and 28.6% lead, 12.8% copper, 3.4% zinc, 9.6% gold, 9.2% silver recovered within the lead concentrate. The top recoveries over the period reported were over 75% zinc and 60% lead.

Of the total 7,034 tonnes of lead and zinc concentrate produced during 2017, the Company has shipped approximately 5,108 tonnes of lead and zinc concentrates and has preliminarily invoiced the buyer and received payment for a total of US $4.8 million representing 90% of Company assayed metal content under the terms of an Offtake Agreement, (see press release dated Sept 18th, 2017 for details). Final invoicing for the remaining 10% will be rendered upon final closing of the sale by comparing assay results obtained by the Company, the buyer and an independent third-party assayer.

Antonio Berlanga, CEO of Telson, states “We are thrilled to have realized the first successful US $4.8 million sales of lead and zinc concentrates produced during our 2017 initial startup testing phase of the Campo Morado mineral processing facility as we work through the mill recommissioning process. Considering we only completed the acquisition of the Campo Morado mine in June 2017, we believe our mining and mineral processing teams have done an exceptional job in recommissioning and tuning up the mill and related facilities. The startup process has proceeded exactly as we envisioned and we appreciate the support of the local communities and governments in this effort. We are nearing the completion of our underground development work on the El Largo zone and expect to soon be able to deliver a less diluted and more consistent higher head grade material to the mill. At the mill our process engineers have been steadily improving the processing and are achieving better base metal recoveries and producing higher grade lead and zinc concentrates through January and the early days of February 2018.”

About Telson Resources Inc.

Telson Resources Inc. is a Canadian based junior resource mining company currently in pre-production at two Mexican gold, silver and base metal mining projects and is advancing both towards commercial production over the coming months