NEWS RELEASE Merrex Gold - Shareholder Update: Convertible Loan and AGM Results

HALIFAX, NOVA SCOTIA -- (October 13, 2016) - Greg Isenor, President and CEO of Merrex Gold Inc., ("Merrex" or the "Company") (TSX Venture: MXI) is pleased to provide shareholders with the following update:

C$4,000,000 Convertible Loan Facility

Further to the Company's news release of August 24, 2016, the Company and the lender have agreed to amend certain terms of the C$4,000,000 convertible loan facility.

Rather than the entire loan principal being convertible at C$0.21 per share as previously announced, only the first up to C$1,000,000 of loan principal which will be available for draw down during 2016 will be convertible at C$0.21/share if and only if funds are advanced into trust for the Company by November 25, 2016. All drawdowns advanced after November 25, 2016 will be priced at market on the date of request for drawdown as evidenced by concurrent news release and the conversion pricing of each individual drawdown shall be subject to separate TSX Venture Exchange approval. Additionally, all loan interest may be paid either in cash or in shares after the due date of April 28, 2018 provided that if such payment is to be made in shares then a separate shares-for-debt filing will be made and TSX Venture Exchange approval received before any shares are issued as an interest payment.

All other terms of the loan facility remain the same; specifically the loan will bear interest at 9% per annum with repayment due on April 28, 2018 and the loan proceeds remain restricted to the exploration costs of the Company's joint venture Siribaya Gold Project, particularly the Diakha deposit, in West Mali, and general and administrative corporate expenses.

To date, C$500,000 has been drawn on the loan facility. The drawdown proceeds are allocated to exploration costs for the Company's 2016 drilling program at Diakha.

The loan facility remains subject to the final approval of the TSX Venture Exchange.

Commentary

"There are two related subjects that I want to comment on" said Merrex president Greg Isenor.

"Firstly, I was immensely pleased with the 2016 drill results at Diakha. The objectives of both the RC and DD drill programs accomplished.

The 41 hole 'first pass' reconnaissance RC drill program returned significant gold mineralization in 34 of 41 holes including hole #644 which returned 70 metres* of 1.55g/t Au, and extended the mineralized strike length of the Diakha deposit by approximately 600 metres from 800 metres to approximately 1.4 km. (see news release July 6, 2016). I also want to note that these initial drill results in the northern extension area are very comparable with the drill results from the 2014 'first pass' drill program what is now the southern Diakha resource area. In both cases over 80% of the RC holes drilled returned significant gold mineralization. (see historical news release July 2, 2014)

The 19 hole DD program within the southern Diakha resource area successfully targeted resource areas with high-grade intersections near the bottom of the resource pit shell testing the down dip extension of high-grade mineralization. All completed holes returned significant gold intercepts including hole 185 which returned 19 metres* of 9.28g/t Au, hole 189 returning 18 metres of 6.73g/t Au and hole 179 which returned 38 metres* of 2.37g/t Au. (see news release August 30,

2016) Although the interpretation of the drilling cross sections is still in progress, the 2016 diamond drilling results appear to have extended mineralized zones along strike and down-dip where tested.

Additionally, some of the best results are in holes at the north and south ends of the resource area. To the north, where the southern resource area meets the newly permitted northern Diakha strike extension area, the diamond drill assay intervals together with the 2016 RC drill results in the northern extension area, (see News Release July 6, 2016) provide further evidence of the potential to expand the resource to the north with additional drilling. To the south, the strong diamond drill assay intervals, particularly in hole #185, suggest continuity with high grade assay intervals previously reported in this area.

(*Reported intervals are drill hole lengths. True widths are no known at this time.)

The second subject I want to address is the convertible loan facility which we are very pleased to have available. Just as the drill results from Diakha continue to reduce the project risk, this loan facility reduces the financing risk by providing available funding for both Merrex's anticipated exploration costs in Mali and Merrex's general and administrative expenses through to the end of 2017. As detailed above, the loan is convertible at rates to be set at market from time to time and has an interest coupon commensurate with the risk assumed by the lender. Importantly to Merrex and to its shareholders, the loan had no set-up or standby fees, no commissions payable and no added warrants, but the most importantly, the availability of this project-dedicated funding provides financial stability to the Company through to the end of 2017."

Results of Annual General Meeting

The Annual and Special General Meeting of Shareholders (the "Meeting") of the Company was held on March 26, 2015 in Halifax, Nova Scotia. At the Meeting, shareholders approved all resolutions put before them by management including the election of all director nominees, the appointment of the auditor and the approval of the Company's incentive stock option plan.

A total of 72,429,122 shares representing 36.36% of the issued capital were voted at the annual meeting. No shares or proxies were disqualified.

The voting results for individual directors were as follows:

Directors

Votes For

Votes Withheld

Greg Isenor

68,495,650 (99.77%)

156,500 (0.23%)

John Cumming

68,170,963 (98.25%)

481,187 (0.70%)

Walter Henry

68,575,250 (99.89%)

76,900 (0.11%)

Jim Patterson

68,575,650 (99.89%)

76,500 (0.11%)

About Merrex's Siribaya Gold Project

The Siribaya Gold Project is a 50/50 joint Merrex-IAMGOLD advanced-stage gold exploration project in West Mali which consists of 11 contiguous exploration permits which cover a total area of 876.5 square kilometres and is located in the Kédougou-Kéniéba inlier of the West African Craton region of western Mali along the borders with Senegal and Guinea.

Qualified Person

Greg Isenor, P.Geo., President of Merrex Gold and a Qualified Person as defined by NI 43-101, has reviewed and approved the contents of this release.

The mineral resource estimate referred to above, including verification of the data disclosed, is at December 31, 2015, was prepared by RPA Inc. and reported in accordance with National Instrument 43-101 (NI43-101) requirements and CIM Estimation Best Practice Guidelines. The supporting NI 43-101 Technical Report is available on SEDAR at www.sedar.com and on the Company's website at www.merrexgold.com.

Merrex is primarily a West African focused gold exploration company with experienced management, a solid exploration team, a prominent gold-producer as a JV partner and an expanding gold resource.

For further details about the Company's exploration activities visit Merrex's website at www.merrexgold.com. To be added to Merrex's email contact list please email your request to info@merrexgold.com.

On Behalf of the Board

Gregory Isenor

Gregory Isenor, P.Geo. President & CEO

MERREXGOLD

Suite 802, 1550 Bedford Highway, Bedford, NS B4A 1E6

Tel.: (902) 832-5555 Fax: (902) 832-2223

Forward Looking Statement This news release contains forward-looking statements. All statements, other than of historical fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future (including, without limitation, statements regarding expected, estimated or planned gold and niobium production, cash costs, margin expansion, capital expenditures and exploration expenditures and statements regarding the estimation of mineral resources, exploration results, potential mineralization, potential mineral resources and mineral reserves) are forward-looking statements. Forward-looking statements are generally identifiable by use of the words "may", "will", "should", "continue", "expect", "anticipate", "outlook", "guidance", "estimate", "believe", "intend", "plan" or "project" or the negative of these words or other variations on these words or comparable terminology. Forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond the Company's ability to control or predict, that may cause the actual results of the Company to differ materially from those discussed in the forward-looking statements. Factors that could cause actual results or events to differ materially from current expectations include, among other things, without limitation: changes in the global prices for gold, niobium, copper, silver or certain other commodities (such as diesel, aluminum and electricity); changes in U.S. dollar and other currency exchange rates, interest rates or gold lease rates; risks arising from holding derivative instruments; the level of liquidity and capital resources; access to capital markets, financing and interest rates; mining tax regimes; ability to successfully integrate acquired assets; legislative, political or economic developments in the jurisdictions in which the Company carries on business; operating or technical difficulties in connection with mining or development activities; laws and regulations governing the protection of the environment; employee relations; availability and increasing costs associated with mining inputs and labour; the speculative nature of exploration and development; contests over title to properties, particularly title to undeveloped properties; and the risks involved in the exploration, development and mining business. Risks and unknowns inherent in all projects include the inaccuracy of estimated reserves and resources, metallurgical recoveries, capital and operating costs of such projects, and the future prices for the relevant minerals. Development projects have no operating history upon which to base estimates of future cash flows. The capital expenditures and time required to develop new mines or other projects are considerable, and changes in costs or construction schedules can affect project economics. Actual costs and economic returns may differ materially from estimates and the Company could fail to obtain the governmental approvals necessary for the operation of a project; in either case, the project may not proceed, either on its original timing or at all.

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

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Merrex Gold Inc. published this content on 13 October 2016 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 14 October 2016 03:04:02 UTC.

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