Brio Gold Reports Third Quarter 2017 Financial Results

TORONTO, Oct. 31, 2017 - Brio Gold Inc. (TSX: BRIO) ("BRIO GOLD" or the "Company") announces its third quarter 2017 financial and operating results. All dollar figures are in U.S. dollars unless otherwise indicated. R$ = Brazilian Reais where noted.


Q3 2017 Financial and Operating Highlights

• Production of 42,913 ounces of gold.
• Total cost of sales of $1,160 per gold ounce sold.
• Cash costs⁽¹⁾ of $876 per ounce of gold produced.
• All-in sustaining costs (AISC)⁽¹⁾ of $1,228 per gold ounce produced.
• Revenues of $54.1 million on the sale of 43,228 ounces of gold.
• Mine operating earnings of $4.0 million.
• Net loss of $10.0 million, or $0.09 per share.
• Adjusted net loss⁽¹⁾ of $6.8 million, or $0.07 per share.
• Adjusted EBITDA⁽¹⁾ of $9.7 million, or $0.08 per share
• Cash flow from operating activities of $6.6 million, and $10.9 million before changes in working capital.
• Secured $22 million in credit facilities with three major Brazilian banks
• Implemented forward contract currency hedges for 2019 at an average fixed rate of R$3.40 to US$1.00 for R$120 million and at R$3.50 to US$1.00 for $120 million.
• Hedged 30,000 ounces of gold over 15 months with zero cost collars with a put and call strike prices of $1,300 and $1,340 per ounce of gold, respectively.

(1) A non-GAAP financial measure. For a reconciliation of non-GAAP financial measures, please see the end of this press release.

Q3 2017 Summary Financial Results
		For the three months ended September 30,				For the nine months ended September 30,
In thousands  of U.S. Dollars		2017		2016		2017		2016
Revenues from  mining operations		$54,126		$60,559		$166,478		$172,846
Mine operating  earnings		$3,999		$7,550		$14,022		$32,304
Net (loss)/earnings		$(10,003)		$(15,534)		$(14,987)		$5,255
Adjusted (loss)/earnings(1)		$(6,752)		$(6,686)		$(7,819)		$(3,137)
Adjusted EBITDA(1)		$9,653		$13,032		$29,068		$45,301
Cash flow from  operating activity		$6,570		$13,998		$326		$38,860
Cash flow from  operating activities before changes in working capital		$10,902		$15,506		$30,616		$50,446

(1)	A non-GAAP financial measure. For a reconciliation of non-GAAP measures, please see the end of this press release.

Revenues from mining operations were $54.1 million in the third quarter of 2017 compared to $60.6 million for the comparable period in 2016 due to lower ounces sold.

Net loss in the third quarter of 2017 was $10.0 million or $0.09 per share, compared to a net loss of $15.5 million or $0.63 per share for the third quarter of 2016. The Company sold VAT tax credits in the quarter that resulted in a gain of $4.4 million, which is excluded from the calculation of adjusted earnings.

The adjusted loss in the third quarter of 2017 was $6.8 million compared to $6.7 million in the same period of 2016 as lower revenue was partially offset by lower depreciation expense.

The adjusted EBITDA in the third quarter of 2017 was $9.7 million compared to $13.0 million in the same period of 2016 due to the lower ounces sold, and higher costs of sales per ounce.

Cash flow from operating activities after changes in working capital for the third quarter of 2017 was an inflow of $6.6 million, compared to an inflow of $14.0 million in the same period of 2016 due to lower ounces sold, and a decline in working capital due to timing of gold shipments that is expected to reverse in the fourth quarter of 2017.

The Company has secured $22 million in credit facilities with three major Brazilian banks at an average interest rate of 4%. The Company plans to utilize these credit facilities for working capital purposes at its operations and is currently assessing other debt funding alternatives including increasing its current $75 million corporate credit facility and direct project financing for the completion of the Santa Luz Mine recommissioning project.

During the third quarter, the Company entered into gold price hedging arrangements in order to manage cash flow during the development phase of the Santa Luz mine. On September 20, 2017, the Company entered into a zero-cost collar contract, where gold puts were purchased and gold calls were sold with put and call strike prices of $1,300 and $1,340 per ounce, respectively, for 2,000 ounces per month. These purchases and sales will be made from October 2017 to December 2018, inclusive, totaling 30,000 ounces of gold.

Subsequent to the quarter end, the Company entered into forward currency contracts of R$120 million for 2019, at a fixed exchange rate that averages R$3.40 to US$1.00 and R$120 million at a fixed exchange rate that average R$3.50 to US$1.00. The Company already has currency hedging arrangements in place for 2017 and 2018. In 2017 and 2018, Brio Gold has R$672 million of forward rate contracts at a rate of R$3.55 to US$1.00 and R$672 million of zero-cost collars with average call and put strike prices of R$3.30 and R$3.90, respectively.

Q3 2017 Summary Operational Results
		For the three  months ended September 30,						For the nine  months ended September 30,
		2017		2016		Change		2017		2016		Change
Gold production (oz) (1)		42,913		46,076		(7)%		137,676		139,185		(1)%
Gold sales (oz) (1)		43,228		46,808		(8)%		135,534		140,403		(3)%
Average realized  gold price(2)		$1,267		$1,309		(3)%		$1,242		$1,243		-%
Total cost of  sales per gold ounce sold(1)		$1,160		$1,132		2%		$1,124		$1,001		12%
Cash cost per  gold ounce produced (1,2)		$876		$813		8%		$858		$714		20%
Consolidated  AISC per gold ounce produced (1,2)		$1,228		$1,157		6%		$1,119		$965		16%

Notes:
(1)	Operating statistics only include RDM from the date that it was acquired on April 29, 2016.
(2)	A non-GAAP financial measure. For a reconciliation of non-GAAP measures see the end of this press release.

Production during the third quarter from the Company's three producing mines was 42,913 ounces of gold, 7% lower than the comparative quarter of 2016.

At the Pilar mine, third quarter production decreased 6% when compared to the same period in 2016. Gold feed grades were significantly lower as a result of a proportional increase in production from the lower grade Maria Lazara deposit and an increased percentage of ore development tonnage at the main Pilar Mine, which led to higher overall dilution. The Company ran the mill at its full design capacity in the quarter, which corresponds to an annual design rate of 1.4 million tonnes per year, or 26% greater throughput year over year. The Company is now confident that the plant can sustain this rate as Brio Gold, in the future, introduces low cost ore from the Tres Buracos open pit development project at Pilar. The Company now intends to return to a lower throughput rate by reducing development ore tonnage and Maria Lazara production, focusing on cost containment and grade. Although this is expected to impact production in the fourth quarter, ultimately cash flow should improve with reduced cost and improved margins. The Company now expects 2017 production for Pilar to be 78,000 to 83,000 ounces.

At Fazenda Brasileiro, third quarter production in 2017 was 8% lower than the same period last year primarily due to lower feed grades as a result of mine sequencing, partially offset by higher recoveries. Feed grade significantly improved month-over-month within the quarter. The Company expects grade to continue to show improvements in the fourth quarter with production forecasted to increase and provide the strongest quarter for Fazenda Brasileiro in 2017. To reflect actual production year to date, the Company expects production at Fazenda Brasileiro to be 60,000 to 65,000 ounces.

The RDM mine was put on care and maintenance for 51 days during the quarter due to a lack of water as a result of continued dry season conditions. At the end of October, the rainy season commenced and the Company is now in the process of re-starting the RDM mine. Consistent production is expected going forward at RDM with the water storage facility complete. The Company expects production for 2017 at RDM to be 45,000 to 50,000 ounces of gold. An ore stockpile was built up in the third quarter to provide process flexibility for when the mine resumes production

Breakdown by Mine
			For the three months  ended September 30,						For the nine months   ended September 30,
Gold production (oz)			2017		2016		Change		2017		2016		Change
	Pilar		19,045		20,237		(6)%		59,816		64,891		(8)%
	Fazenda  Brasileiro		15,915		17,211		(8)%		44,879		52,608		(15)%
	RDM(1)		7,953		8,628		(8)%		32,981		21,686		52%
Total  Production			42,913		46,076		(7)%		137,676		139,185		(1)%
Total Cost of  Sales ($ per oz sold)
	Pilar		$1,212		$1,152		5%		$1,123		$1,023		10%
	Fazenda  Brasileiro		$1,152		$998		15%		$1,161		$901		29%
	RDM(1)		$1,046		$1,342		(22)%		$1,078		$1,189		(9)%
Total Cost of  Sales per gold oz sold			$1,160		$1,132		2%		$1,124		$1,001		12%
Cash Costs ($ per oz produced)
	Pilar		$845		$791		7%		$820		$698		17%
	Fazenda  Brasileiro		$943		$751		26%		$877		$667		31%
	RDM(1)		$815		$986		(17)%		$900		$878		3%
Total Cash  Costs			$876		$813		8%		$858		$714		20%
AISC ($ per oz produced)
	Pilar		1,085		1,067		2%		1,035		884		17%
	Fazenda  Brasileiro		1,158		1,039		11%		1,055		883		19%
	RDM(1)		1,241		1,174		6%		1,022		999		2%
Total Mine AISC ($ per oz produced)			1,141		1,077		6%		1,038		897		16%
Total  Consolidated AISC ($ per oz produced)			1,228		1,157		6%		1,119		965		16%

Notes:
(1)	Operating statistics only include RDM from the date that it was acquired on April 29, 2016.

Third Quarter 2017 Financial Results Conference Call and Webcast

Brio Gold will hold a conference call and webcast on November 1, 2017 at 10:00 am ET.

Third Quarter 2017 Conference Call:
Toll Free (North America): 1-844-543-5236
International: 1-703-318-2218
Webcast: www.briogoldinc.com

Conference Call REPLAY:
Toll Free (North America): 1-855-859-2056
Toronto Local and International: 1-404-537-3406
Conference ID: 94463369

The conference call replay will be available from 1:00 p.m. ET on November 1, 2017 until 12:00 p.m. ET on November 8, 2017.


About Brio Gold

Brio Gold is a Canadian mining company with significant gold producing, development and exploration stage properties in Brazil. Brio Gold's portfolio includes three operating gold mines and a fully-permitted, fully-constructed mine that was on care and maintenance and currently is in development to be re-started at the end of 2018. Brio Gold produced approximately 190,000 ounces of gold in 2016 and at full run-rate expects annual production to be approximately 400,000 ounces of gold.


CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS: This news release contains or incorporates by reference "forward-looking statements" and "forward-looking information" under applicable Canadian securities legislation. Forward-looking information includes, but is not limited to information with respect to the Company's strategy, plans or future financial or operating performance, the outcome of the legal matters involving the damages assessments and any related enforcement proceedings. Forward-looking statements are characterized by words such as "plan," "expect", "budget", "target", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking statements are based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made, and are inherently subject to a variety of risks and uncertainties and other known and unknown factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. These factors include the Company's expectations in connection with the production and exploration, development and expansion plans at the Company's projects discussed herein being met, the impact of proposed optimizations at the Company's projects, the impact of the proposed new mining law in Brazil, and the impact of general business and economic conditions, global liquidity and credit availability on the timing of cash flows and the values of assets and liabilities based on projected future conditions, fluctuating metal prices (such as gold and silver), currency exchange rates (such as the Brazilian real versus the United States dollar), the impact of inflation, possible variations in ore grade or recovery rates, changes in the Company's hedging program, changes in accounting policies, changes in mineral resources and mineral reserves, risks related to asset disposition, risks related to metal purchase agreements, risks related to acquisitions, changes in project parameters as plans continue to be refined, changes in project development, construction, production and commissioning time frames, unanticipated costs and expenses, higher prices for fuel, steel, power, labour and other consumables contributing to higher costs and general risks of the mining industry, failure of plant, equipment or processes to operate as anticipated, unexpected changes in mine life, unanticipated results of future studies, seasonality and unanticipated weather changes, costs and timing of the development of new deposits, success of exploration activities, permitting timelines, government regulation and the risk of government expropriation or nationalization of mining operations, risks related to relying on local advisors and consultants in foreign jurisdictions, environmental risks, unanticipated reclamation expenses, risks relating to joint venture operations, title disputes or claims, limitations on insurance coverage and timing and possible outcome of pending and outstanding litigation and labour disputes, risks related to enforcing legal rights in foreign jurisdictions, as well as those risk factors discussed or referred to herein. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. The Company undertakes no obligation to update forward-looking statements if circumstances or management's estimates, assumptions or opinions should change, except as required by applicable law. The reader is cautioned not to place undue reliance on forward-looking statements. The forward-looking information contained herein is presented for the purpose of assisting investors in understanding the Company's expected financial and operational performance and results as at and for the periods ended on the dates presented in the Company's plans and objectives and may not be appropriate for other purposes.


Non-GAAP Financial Measures

The Company has included certain non-GAAP financial measures including cash costs per ounce of gold produced, all-in sustaining costs per ounce of gold produced, adjusted earnings (loss), and adjusted EBITDA to supplement its consolidated financial statements, which are presented in accordance with IFRS.

The Company believes that these measures, together with measures determined in accordance with IFRS, provide investors with an improved ability to evaluate the underlying performance of the Company. Non-GAAP financial measures do not have any standardized meaning prescribed under IFRS, and therefore they may not be comparable to similar measures employed by other companies. The data is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.


Cash Costs

The Company uses the non-GAAP financial measure "cash costs" on a per ounce of gold produced basis because it believes this measure provides investors and analysts with useful information about the Company's underlying cash costs of operations and is a relevant metric used to understand the Company's operating profitability, and ability to generate cash flow. Cash costs figures are calculated based on the standard developed by The Gold Institute, which was a worldwide association of suppliers of gold and gold products and included leading North American gold producers. The Gold Institute ceased operations in 2002, but the standard remains the generally accepted standard of reporting cash costs of production in North America. Adoption of the standard is voluntary and the cost measures presented herein may not be comparable to other similarly titled measures of other companies.

Cash costs include mine site operating costs such as mining, processing, administration, production taxes and royalties, which are not based on sales or taxable income calculations, but are exclusive of amortization, reclamation, capital, development, and exploration costs. Cash costs per ounce of gold produced are calculated on a weighted average basis.

The term "cash costs" has no standard meaning and therefore, the Company's definitions are unlikely to be comparable to similar measures presented by other companies and should not be considered in isolation or as a substitute for measures prepared in accordance with IFRS and is not necessarily indicative of operating costs, operating profit or cash flows presented under IFRS.


All-in Sustaining Costs

The Company uses the non-GAAP financial measure "all-in sustaining costs", also referred to as "AISC", on a per ounce of gold produced basis because it believes this measure provides investors with useful information about the Company's underlying cash costs of operations, after deducting certain non-discretionary items such as sustaining capital expenditures, exploration expenses and certain general and administrative costs and is a relevant metric used to understand the Company's ability to generate cash flow. All-in sustaining costs are based on cash costs, including cost components of mine sustaining capital expenditures and exploration and evaluation expense. All-in sustaining costs for a mine do not include capital expenditures attributable to projects or mine expansions, exploration and evaluation costs attributable to growth projects, Brio Gold corporate general and administrative expenses, Yamana general and administrative expenses allocated to Brio Gold or stock-based compensation, income tax payments, financing costs and dividend payments. Consequently, this measure is not representative of all of the Company's cash expenditures. In addition, the calculation of all-in sustaining costs does not include depletion, depreciation and amortization expense as it does not reflect the impact of expenditures incurred in prior periods. The term "all-in sustaining costs" has no standard meaning and therefore, the Company's definitions are unlikely to be comparable to similar measures presented by other companies and should not be considered in isolation or as a substitute for measures prepared in accordance with IFRS and is not necessarily indicative of operating costs, operating profit or cash flows presented under IFRS.


Reconciliation of cost of sales including depletion, depreciation and amortization to cash costs and all-in sustaining costs, consolidated and per mine

(Based on Condensed Consolidated Interim Financial Statements unless otherwise noted)

		For the three  months ended September 30, 2017
(In  thousands of  U.S. dollars, except per share and per ounce amounts)		Consolidated			Pilar Mine			Fazenda   Brasileiro Mine			RDM Mine
Cost of sales including  depletion, depreciation and amortization		50,127			22,348			19,196			8,497
Depletion, depreciation  and amortization		(10,442	)		(5,868	)		(3,356	)		(1,132	)
Adjustments:
Inventory movement and adjustments(1)		(2,093	)		(387	)		(832	)		(883	)
Cash costs(2)		37,592			16,093			15,008			6,482
General and  administrative expenses attributable to all-in sustaining costs		5,470			99			86			103
Stock based compensation		(1,888	)		-			-			-
Sustaining capital  expenditures		11,523			4,472			3,336			3,285
All-in sustaining costs(2)		52,697			20,664			18,430			9,870
Cost of sales including  depletion, depreciation and amortization per gold ounce sold		1,160			1,212			1,152			1,046
Cash cost per gold ounce produced(2)		876			845			943			815
All-in sustaining costs per ounce  produced(2)		1,228			1,085			1,158			1,241
Gold ounces produced  during the period (oz.)		42,913			19,045			15,915			7,953
Gold ounces sold during the period (oz.)		43,228			18,444			16,658			8,126

		For the three  months ended September 30, 2016
(In  thousands of  U.S. dollars, except per share and per ounce amounts)		Consolidated				Pilar Mine				Fazenda   Brasileiro Mine				RDM Mine
Cost of sales including  depletion, depreciation and amortization			53,009				23,787				17,072				12,150
Depletion, depreciation  and amortization			(13,936	)			(9,295	)			(3,792	)			(849	)
Adjustments:
Inventory movement and adjustments(1)			(1,613	)			1,515				(355	)			(2,794	)
Cash costs(2)			37,460				16,007				12,925				8,507
General and administrative  expenses attributable to all-in sustaining costs			5,509				26				44				30
Stock based compensation			(1,742	)			-				-				-
Sustaining capital  expenditures			12,065				5,560				4,913				1,592
All-in sustaining costs(2)			53,292				21,593				17,882				10,129
Cost of sales including  depletion, depreciation and amortization per gold ounce sold		$	1,132			$	1,152			$	998			$	1,342
Cash cost per gold ounce produced(2)		$	813			$	791			$	751			$	986
All-in sustaining costs per ounce  produced(2)		$	1,157			$	1,067			$	1,039			$	1,174
Gold ounces produced  during the period (oz.)			46,076				20,237				17,211				8,628
Gold ounces sold during the period (oz.)			46,808				20,656				17,100				9,052

		For the nine  months ended September 30, 2017
(In  thousands of  U.S. dollars, except per share and per ounce amounts)		Consolidated			Pilar Mine			Fazenda   Brasileiro Mine			RDM Mine
Cost of sales including  depletion, depreciation and amortization		152,456			65,936			50,272			36,162
Depletion, depreciation  and amortization		(35,348	)		(17,150	)		(13,136	)		(4,976	)
Adjustments:
Inventory movement and adjustments(1)		1,018			263			2,223			(1,503	)
Cash costs(2)		118,126			49,049			39,359			29,683
General and  administrative expenses attributable to all-in sustaining costs		17,041			873			677			413
Stock based compensation		(5,632	)		-			-			-
Sustaining capital  expenditures		24,524			11,988			7,311			3,611
All-in sustaining costs(2)		152,820			61,910			47,347			33,707
Cost of sales including  depletion, depreciation and amortization per gold ounce sold		1,124			1,123			1,161			1,078
Cash cost per gold ounce produced(2)		858			820			877			900
All-in sustaining costs per ounce  produced(2)		1,119			1,035			1,055			1,022
Gold ounces produced  during the period (oz.)		137,676			59,816			44,879			32,981
Gold ounces sold during the period (oz.)		135,534			58,702			43,283			33,549

		For the nine  months ended September 30, 2016
(In  thousands of  U.S. dollars, except per share and per ounce amounts)		Consolidated			Pilar Mine			Fazenda   Brasileiro Mine			RDM Mine
Cost of sales including  depletion, depreciation and amortization		140,542			65,737			48,998			25,807
Depletion, depreciation  and amortization		(40,494	)		(25,605	)		(12,822	)		(2,067	)
Adjustments:
Inventory movement and adjustments(1)		(670	)		5,162			(1,086	)		(4,700	)
Cash costs(2)		99,378			45,294			35,090			19,040
General and  administrative expenses attributable to all-in sustaining costs		16,426			560			214			34
Stock based compensation		(5,226	)		-			-			-
Sustaining capital  expenditures		23,755			11,501			11,150			2,580
All-in sustaining costs(2)		134,333			57,355			46,454			21,654
Cost of sales including  depletion, depreciation and amortization per gold ounce sold		1,001			1,023			901			1,189
Cash cost per gold ounce produced(2)		714			698			667			878
All-in sustaining costs per ounce  produced(2)		965			884			883			999
Gold ounces produced  during the period (oz.)		139,185			64,891			52,608			21,686
Gold ounces sold during the period (oz.)		140,403			64,289			54,408			21,706

Notes:
(1)	Inventory movement and adjustment represent the difference between the costs of production (which are based on ounces produced) and the cost of sales (which is based on ounces sold). The timing difference between the units sold and the costs of those units requires an adjustment to reflect the nature of the underlying metric.
(2)	A non-GAAP financial measure.

Quarterly trailing cost of sales including depletion, depreciation and amortization to cash costs consolidated and per mine

(Based on Condensed Consolidated Interim Financial Statements unless otherwise noted)

Brio Gold Consolidated
(In  thousands of  U.S. dollars, except per share and per ounce amounts)		Q3-17			Q2-17			Q1-17			Q4-16
Cost of sales including  depletion, depreciation and amortization		50,127			48,646			53,684			71,169
Depletion, depreciation  and amortization		(10,442	)		(11,541	)		(13,366	)		(26,275	)
Adjustments:
Inventory movement and adjustments(1)		(2,093	)		877			2,254			(2,897	)
Cash costs(2)		37,592			37,982			42,572			41,997
Cost of sales including  depletion, depreciation and amortization per gold ounce sold		1,160			1,139			1,082			1,421
Cash cost per gold ounce produced(2)		876			859			842			832
Gold ounces produced  during the period (oz.)		42,913			44,223			50,540			50,477
Gold ounces sold during the period (oz.)		43,228			42,691			49,615			50,092

Brio Gold Consolidated
(In  thousands of  U.S. dollars, except per share and per ounce amounts)		Q3-16			Q2-16			Q1-16			Q4-15
Cost of sales including  depletion, depreciation and amortization		53,009			54,265			33,111			39,812
Depletion, depreciation  and amortization		(13,936	)		(15,752	)		(10,855	)		(14,076	)
Adjustments:
Inventory movement and adjustments(1)		(1,614	)		(226	)		1,382			(1,850	)
Cash costs(2)		37,459			38,287			23,638			23,886
Cost of sales including  depletion, depreciation and amortization per gold ounce sold		1,132			1,037			803			1,016
Cash cost per gold ounce produced(2)		813			726			590			610
Gold ounces produced  during the period (oz.)		46,076			52,737			40,372			39,279
Gold ounces sold during the period (oz.)		46,808			52,351			41,243			39,194

Pilar Mine
(In  thousands of  U.S. dollars, except per share and per ounce amounts)		Q3-17			Q2-17			Q1-17			Q4-16
Cost of sales including  depletion, depreciation and amortization		22,348			22,635			20,953			36,843
Depletion, depreciation  and amortization		(5,868	)		(6,213	)		(5,070	)		(17,919	)
Adjustments:
Inventory movement and adjustments(1)		(387	)		436			258			408
Cash costs(2)		16,093			16,858			16,141			19,332
Cost of sales including  depletion, depreciation and amortization per gold ounce sold		1,212			1,144			1,024			1,687
Cash cost per gold ounce produced(2)		845			831			788			872
Gold ounces produced  during the period (oz.)		19,045			20,287			20,484			22,170
Gold ounces sold during the period (oz.)		18,444			19,793			20,465			21,837

Pilar Mine
(In  thousands of  U.S. dollars, except per share and per ounce amounts)		Q3-16			Q2-16			Q1-16			Q4-15
Cost of sales including  depletion, depreciation and amortization		23,787			22,554			19,726			19,237
Depletion, depreciation  and amortization		(9,295	)		(8,782	)		(7,577	)		(5,682	)
Adjustments:
Inventory movement and adjustments(1)		1,515			1,713			1,626			(374	)
Cash costs(2)		16,007			15,485			13,775			13,181
Cost of sales including  depletion, depreciation and amortization per gold ounce sold		1,152			1,023			914			851
Cash cost per gold ounce produced(2)		791			679			641			618
Gold ounces produced  during the period (oz.)		20,237			22,806			21,848			21,326
Gold ounces sold during the period (oz.)		20,656			22,047			21,586			22,617

Fazenda Brasileiro Mine
(In  thousands of  U.S. dollars, except per share and per ounce amounts)		Q3-17			Q2-17			Q1-17			Q4-16
Cost of sales including  depletion, depreciation and amortization		19,196			14,624			16,452			20,530
Depletion, depreciation  and amortization		(3,356	)		(3,189	)		(6,591	)		(5,870	)
Adjustments:
Inventory movement and adjustments(1)		(832	)		1,135			1,932			(896	)
Cash costs(2)		15,008			12,570			11,793			13,764
Cost of sales including  depletion, depreciation and amortization per gold ounce sold		1,152			1,145			1,188			1,074
Cash cost per gold ounce produced(2)		943			892			793			753
Gold ounces produced  during the period (oz.)		15,915			14,092			14,872			18,279
Gold ounces sold during the period (oz.)		16,658			12,776			13,849			19,110

Fazenda Brasileiro Mine
(In  thousands of  U.S. dollars, except per share and per ounce amounts)		Q3-16			Q2-16			Q1-16			Q4-15
Cost of sales including  depletion, depreciation and amortization		17,072			17,784			14,368			20,054
Depletion, depreciation  and amortization		(3,792	)		(5,484	)		(3,556	)		(8,394	)
Adjustments:
Inventory movement and adjustments(1)		(355	)		(50	)		(910	)		(914	)
Cash costs(2)		12,925			12,250			9,902			10,746
Cost of sales including  depletion, depreciation and amortization per gold ounce sold		998			1,008			731			1,210
Cash cost per gold ounce produced(2)		751			726			536			599
Gold ounces produced  during the period (oz.)		17,211			16,873			18,524			17,953
Gold ounces sold during the period (oz.)		17,100			17,650			19,657			16,577

RDM, Brazil
(In  thousands of  U.S. dollars, except per share and per ounce amounts)		Q3-17			Q2-17			Q1-17			Q4-16			Q3-16			Q2-16
Cost of sales including  depletion, depreciation and amortization		8,497			11,387			16,278			13,660			12,150			13,080
Depletion, depreciation  and amortization		(1,132	)		(2,139	)		(1,705	)		(2,477	)		(849	)		(1,217	)
Adjustments:
Inventory movement and adjustments(1)		(883	)		(694	)		64			(2,278	)		(2,794	)		(1,334	)
Cash costs(2)		6,482			8,554			14,637			8,905			8,507			10,529
Cost of sales including  depletion, depreciation and amortization per gold ounce sold		1,046			1,125			1,064			1,494			1,342			1,079
Cash cost per gold ounce produced(2)		815			869			964			888			986			807
Gold ounces produced  during the period (oz.)		7,953			9,844			15,184			10,028			8,628			13,058
Gold ounces sold during the period (oz.)		8,126			10,122			15,301			9,146			9,052			12,654

Notes:
(1)	Inventory movement and adjustment represent the difference between the costs of production (which are based on ounces produced) and the cost of sales (which is based on ounces sold). The timing difference between the units sold and the costs of those units requires an adjustment to reflect the nature of the underlying metric.
(2)	A non-GAAP financial measure.
(3)	RDM was acquired during Q2 2016, therefore Q4 2015 and Q1 2016 are not applicable

Adjusted EBITDA

The Company uses the non-GAAP financial measure "Adjusted EBITDA" because it believes it provides investors with useful information to evaluate its performance and understand its ability to service and/or incur indebtedness.

The Company defines Adjusted EBITDA as net loss, before income tax recovery (expense), depletion, depreciation and amortization, impairment and reversals of mining properties, interest expense, share-based compensation, and non-recurring provisions and other adjustments.

The term "Adjusted EBITDA" has no standard meaning and therefore, the Company's definitions are unlikely to be comparable to similar measures presented by other companies and should not be considered in isolation or as a substitute for measures prepared in accordance with IFRS and is not necessarily indicative of operating costs, operating profit or cash flows presented under IFRS.

Reconciliation of Net Loss to Adjusted EBITDA

(Based on Condensed Consolidated Interim Financial Statements unless otherwise noted)

		For the three months  ended September 30,								For the nine  months ended September 30,
(In  thousands of  U.S.  dollars)		2017				2016				2017				2016
Net (loss)/earnings			(10,003	)			(15,534	)			(14,987	)			5,255
Adjustments:
Income tax  expense/(recovery)			1,229				7,064				(5,458	)			(15,058	)
Depletion, depreciation  and amortization			10,442				13,936				35,348				40,494
Foreign exchange loss			2,563				4,171				2,558				7,188
Bank, financing fees, interest expense and other			1,734				1,653				3,647				2,196
Stock based compensation			1,888				1,742				5,632				5,226
Unrealized loss on  foreign exchange hedges			1,800				-				2,328				-
Adjusted EBITDA		$	9,653			$	13,032			$	29,068			$	45,301

Adjusted Earnings or Loss

The Company uses the non-GAAP financial measure "Adjusted earnings or loss" because it believes this measure provides useful information to investors to evaluate the Company's performance by excluding certain cash and non-cash charges. The presentation of Adjusted earnings or loss is not meant to be a substitute for net earnings or loss or net earnings or loss per share presented in accordance with IFRS, but rather should be evaluated in conjunction with such IFRS measures. Adjusted earnings or loss is calculated as net earnings excluding (a) stock based compensation, (b) unrealized foreign exchange (gains) losses related to revaluation of deferred income tax asset and liability on non-monetary items, (c) unrealized foreign exchange (gains) losses related to other items, (d) impairment losses and reversals, (e) deferred income tax expense (recovery) on the translation of foreign currency inter corporate debt, (f) periodic tax adjustments to historical deferred income tax balances relating to changes in enacted tax rates and (g) non-cash provisions and any other non-recurring adjustments. Non-recurring adjustments from unusual events or circumstances are reviewed from time to time based on materiality and the nature of the event or circumstance. Earnings adjustments for the comparative period reflect continuing operations.

The terms "Adjusted earnings or loss" has no standardized meaning prescribed by IFRS and therefore the Company's definitions are unlikely to be comparable to similar measures presented by other companies.

For more information, see the Condensed Consolidated Interim Financial Statements and the related notes.

Reconciliation of Net Loss to Adjusted Earnings or Loss

(Based on Condensed Consolidated Interim Financial Statements unless otherwise noted)

		For the three months ended September 30,								For the nine months ended September 30,
(In  thousands of  U.S.  dollars)		2017				2016				2017				2016
Net earnings		$	(10,003	)		$	(15,534	)		$	(14,987	)		$	5,256
Adjustments:
Foreign exchange loss			2,563				4,171				2,558				7,188
Unrealized loss on  foreign exchange hedges			1,800				-				2,328				-
Provisions on indirect  tax credits			1,672				1,117				555				5,452
(Gain)/loss on sale of  indirect tax credits			(4,365	)			890				(4,376	)			657
Business transaction  costs			-				618				848				4,481
Stock based compensation			1,888				1,742				5,632				5,226
Non-cash tax effect on  unrealized foreign exchange losses/(gains)			(1,587	)			1,120				(4,849	)			(28,161	)
Tax impact  of  adjustments			37				(1,441	)			119				(4,931	)
Other			1,243				631				4,353				1,695
Adjusted (loss)/earnings		$	(6,752	)		$	(6,686	)		$	(7,819	)		$	(3,137	)

Realized Price

The Company uses the non-GAAP financial measure "realized price" on a per ounce of gold sold basis because it believes this measure provides investors and analysts with a more accurate measure with which to compare to market gold prices and to assess the Company's gold sales performance. Management believes that this measure provides a more accurate reflection of past performance and is a better indicator of expected performance in future periods. Realized price excludes the impact of the mining royalty on revenue from mining operations. The term "realized price" has no standard meaning and therefore, the Company's definitions are unlikely to be comparable to similar measures presented by other companies and should not be considered in isolation or as a substitute for measures prepared in accordance with IFRS and is not necessarily indicative of revenue from mining operations, operating profit or cash flows presented under IFRS.

Reconciliation of Revenue from Mining Operations to Realized Price per Gold Ounce Sold

(Based on Condensed Consolidated Interim Financial Statements unless otherwise noted)

(In thousands of U.S. dollars, except price per ounce in dollars and ounces sold)		For the three months ended September 30,						For the nine months ended September 30,
		2017			2016			2017			2016
Revenue from mining  operations		$	54,126		$	60,559		$	166,478		$	172,846
Brazilian mining royalty (CFEM)			535			604			1,652			1,730
Revenue from mining  operations excluding CFEM			54,661			61,163			168,130			174,576
Gold ounces sold during  the period (oz.)			43,228			46,808			135,534			140,403
Realized price per gold ounce sold ($/oz.)		$	1,264		$	1,307		$	1,241		$	1,243

BRIO GOLD INC.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS)/INCOME
			For the three months ended September 30,								For the nine months ended September 30,
(In  thousands  of  United  States  Dollars, except share and per share amounts), (unaudited)			2017				2016				2017				2016
Revenue from mining  operations			$	54,126			$	60,559			$	166,478			$	172,846
Cost of sales excluding  depletion, depreciation and amortization				(39,685	)			(39,073	)			(117,108	)			(100,048	)
Gross margin excluding  depletion, depreciation and amortization				14,441				21,486				49,370				72,798
Depletion, depreciation  and amortization				(10,442	)			(13,936	)			(35,348	)			(40,494	)
Mine operating earnings				3,999				7,550				14,022				32,304
Expenses
General and  administrative				(5,470	)			(5,509	)			(17,041	)			(16,426	)
Other operating expense				(53	)			(3,859	)			(4,651	)			(14,123	)
Operating (loss)/earnings				(1,524	)			(1,818	)			(7,670	)			1,755
Foreign exchange loss				(2,563	)			(4,171	)			(2,558	)			(7,188	)
Unrealized foreign  exchange hedges loss				(1,800	)			-				(2,328	)			-
Finance expense				(2,887	)			(2,481	)			(7,889	)			(4,370	)
Loss before income taxes				(8,774	)			(8,470	)			(20,445	)			(9,803	)
Income tax (expense)/recovery				(1,229	)			(7,064	)			5,458				15,058
Net (loss)/earnings				(10,003	)			(15,534	)			(14,987	)			5,255
Other comprehensive (loss)/income
Items that may be reclassified subsequently to profit or loss:
	Change in fair value of hedging  instruments, net of tax			9,894				-				12,753				-
Total comprehensive (loss)/income			$	(109	)		$	(15,534	)		$	(2,234	)		$	5,255
Net (loss)/earnings per  share
	Net (loss)/earnings per share (basic)		$	(0.09	)		$	(0.63	)		$	(0.13	)		$	0.22
	Net (loss)/earnings per share (diluted)		$	(0.09	)		$	(0.63	)		$	(0.13	)		$	0.21
Weighted average number of shares outstanding
	Basic			112,527,429				24,467,689				112,527,429				23,824,918
	Diluted			112,527,429				24,467,689				112,527,429				25,341,058

BRIO GOLD INC.
CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS
(In  thousands  of  United  States  Dollars)		As at September 30, 2017 (unaudited)				As at December 31, 2016
Assets
Current assets:
Cash		$	9,698			$	7,014
Trade and other  receivables			8,587				154
Inventories			39,675				29,620
Derivative related assets			14,926				1,328
Other current assets			17,027				12,777
			89,913				50,893
Non-current assets:
Property, plant and equipment			495,566				481,746
Non-current derivative related  assets			1,540				-
Deferred tax assets			10,125				6,167
Other non-current assets			9,695				2,893
Total assets		$	606,839			$	541,699
Liabilities
Current liabilities:
Trade and other payables		$	45,945			$	56,066
Income taxes payable			6,165				2,998
Short-term debt			1,503				-
Other financial  liabilities			1,892				1,414
Other provisions and liabilities			3,964				5,243
			59,469				65,721
Non-current liabilities:
Long-term debt			60,166				-
Decommissioning, restoration and similar liabilities			41,315				36,871
Deferred income tax  liabilities			10,816				11,413
Other non-current provisions and  liabilities			8,882				4,902
Total liabilities			180,648				118,907
Equity
Share capital			427,858				427,858
Reserves			89,062				70,675
Deficit			(90,729	)			(75,741	)
Total equity			426,191				422,792
Total equity and liabilities		$	606,839			$	541,699

BRIO GOLD INC.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
			For the three months ended September 30,								For the nine months ended September 30,
(In  thousands  of  United  States  Dollars), (unaudited)			2017				2016				2017				2016
Operating activities
Loss before income tax  expense			$	(8,774	)		$	(8,470	)		$	(20,445	)		$	(9,803	)
Adjustments to reconcile  loss before income taxes to operating cash flows:
	Depletion, depreciation  and amortization			10,442				13,936				35,348				40,494
	Foreign exchange loss			2,563				4,171				2,558				7,188
	Unrealized foreign  exchange hedges loss			1,800				-				2,328				-
	Finance expense			2,887				2,481				7,889				4,370
	Other non-cash operating expenses (Note  17b)			2,242				4,380				4,225				12,256
	Decommissioning, restoration and similar liabilities paid			(258	)			(790	)			(1,199	)			(1,441	)
	Income taxes paid			-				(202	)			(88	)			(2,618	)
Cash flows from  operating activities before net change in working capital			$	10,902			$	15,506			$	30,616			$	50,446
Net change in working capital				(4,332	)			(1,508	)			(30,290	)			(11,586	)
Cash flows from  operating activities			$	6,570			$	13,998			$	326			$	38,860
Investing activities
Property, plant and  equipment expenditures				(21,370	)			(16,224	)			(55,915	)			(40,350	)
Acquisition of Mineração  Riacho dos Machados Ltda				-				-				-				(50,225	)
Cash flows used in  investing activities			$	(21,370	)		$	(16,224	)		$	(55,915	)		$	(90,575	)
Financing activities
Proceeds from debt			$	14,003			$	-			$	64,003			$	-
Related party financing				-				-				-				51,361
Cost of debt				(293	)			-				(3,442	)			-
Interest and other finance expenses  paid				(836	)			-				(1,643	)			-
Cash flows from  financing activities			$	12,874			$	-			$	58,918			$	51,361
Effect of foreign  exchange on cash				112				162				(645	)			919
(Decrease)/increase in  cash			$	(1,814	)		$	(2,064	)		$	2,684			$	565
Cash, beginning of  period			$	11,512			$	6,595			$	7,014			$	3,966
Cash, end of period			$	9,698			$	4,531			$	9,698			$	4,531

FOR FURTHER INFORMATION PLEASE CONTACT:

Brio Gold Inc.
Letitia Wong, Vice President, Corporate Development
Telephone: +1 (416) 860-6310
Email: info@briogoldinc.com