Kerr Mines Inc. (TSX: KER, OTC: KERMF, FRA: 7AZ1) ("Kerr" or the "Company") is pleased to announce that the Phase II Resource Expansion Program will begin mid- January, 2019 at the Copperstone Mine located in Arizona, USA. In addition, Kerr is progressing with environmental and operating permit modifications and continuing with advanced metallurgical testwork.

Highlights:

-- Major Drilling Group International Inc. ("Major") has been awarded the contract and is preparing to commence with drilling.

-- 15,000 meter underground resource expansion program will culminate in Q3 2019 with an updated Resource Statement and Reserve Study intended to increase the 38,000 gold ounce per annum mine life by 3-4 years to total of 8 years.

-- Phase II Resource Expansion Program consists of exploration drilling with the purpose of adding new resources and in-fill drilling for the purposes of converting existing resources to higher classification and potential inclusion into reserves.

-- Existing operating permit modifications are well underway and are expected to be received by end of Q1 2019.

-- All remaining permits required for mine operations and gold production are in place and do not require modification.

-- Metallurgical testing to provide information for detailed gold processing plant design is expected to be complete during Q1 2019.

-- Additional metallurgical testwork to provide the information needed for the potential monetization of Copper as a by-product revenue stream.

The Phase II Resource Expansion Program

The 15000 meter resource expansion program will be stationed from the 4 kilometers of existing underground access and focused primarily on the C & D Zones of the Copperstone Zone. The objective of the resource expansion program is to increase reserves and increase mine life by 3-4 years to a total of 8 years. As such, the focus will be on targeting areas of Measured and Indicated that are not already included in Proven and Probable reserves as well as converting Inferred tons to Measured and Indicated classification. In addition, the program will target areas along strike and down dip with the intent of growing the existing Inferred ore tons and ounces of gold. Any newly identified Inferred will then be available for conversion into higher classifications with future drilling. The program will be executed by Major, a multinational provider of drilling services with a strong record of safety and performance.

Permit Modifications

Certain existing permits require minor modification in order to facilitate changes in key attributes of the project as it progresses to gold production. Among the changes are higher throughput of 600 ore tons per day and the use of a whole ore leaching process for recovery of the gold ore. State of Arizona environmental permits governing air and water and the Federal operating permit are slated to be received by the end of Q1 2019. The approval of these changes indicate a benefit to the mine economics because of the increased throughput and the higher recoveries allowed by leaching as discovered in the 2018 43-101 engineering study (see press release April 10, 2018), 600 ore tons per day and 95% average gold recoveries with no concentrate charges.

Metallurgical Testing

The primary purpose is to validate prior results of average 95% recovery of gold and to refine reagent consumption and leach times. The results of these tests will be for final detailed plant design. The secondary purpose is to perform testing to evaluate the economic viability of incorporating a Sulfidization-Acidification-Recycle-Thickening ("SART") circuit to the planned mineral processing plant. A SART circuit can reduce operating costs by reducing reagent consumption and add revenue from the recovery of Copper from the gold ore.

"We are looking forward to this underground drilling program and subsequent update of Resources and Reserves. The Company will release drill results once adequate drilling has been completed" said Martin Kostuik, President. "Other catalysts for the Copperstone Mine such as the receipt of the permit modifications and the conclusion of our detailed metallurgical testing are significant milestones for the first part of this year".

About Kerr Mines Inc.

Kerr Mines is an Emerging American Gold Producer currently advancing the 100% owned, fully permitted past-producing Copperstone Mine project to production. Copperstone is a high-grade gold project located along a detachment fault mineral belt in mining-friendly Arizona. This gold project in Arizona demonstrates tremendous exploration potential targeting multi-million ounce prospects within a 4,775 hectare (11,800 acres) land package.

PDF Version of 43-101 technical report available:

http://kerrmines.com/wp-content/uploads/KerrCopperstone_PFS_43-101.pdf

YouTube: Copperstone Gold Mine KER:TSX 3 min. Investor Tour Video

For further information contact:

Claudio Ciavarella

Chief Executive Officer

[email protected]

416-855-9305

Cautionary Note Regarding Forward Looking Statements