Austral Gold Announces Filing of Technical Report on the Casposo Gold-Silver Mine

Vancouver, British Columbia--(Newsfile Corp. - October 13, 2016) - Austral Gold Limited. (ASX: AGD) (TSXV: AAM) ("Austral" or the "Company") is pleased to announce that it has filed on SEDAR a National Instrument 43-101 ("NI 43-101") and JORC 2012 compliant Technical Report on the Casposo Gold-Silver Mine, Department of Calingasta, San Juan Province, Argentina (the "Casposo Technical Report" or "Technical Report") dated September 7, 2016. The Casposo Technical Report has also been filed on the ASX website (www.asx.com.au).

As announced in the Company's news release on the 27^th of September, 2016, commercial operations have recommenced at Casposo. Austral Gold is operator of the Casposo mine with 51% ownership, with the right to acquire up to 100% ownership over the next five years.

Life of Mine Plan Highlights

• Changes in underground mining methods are expected to reduce dilution;

• Optimisation of processing plant is expected to improve efficiency of the plant;

• Mine life: 4 years;

• Pre- Tax NPV(5%) of $53 million and After-tax NPV(5%) of $37 million;

• Proven and Probable Mineral Reserves as of June 30, 2016, totaling 972,000 tonnes at 2.53 g/t Au and 231 g/t Ag, containing approximately 79,000 ounces of gold and 7.2 million ounces of silver;

• Measured and Indicated Mineral Resources as of June 30, 2016, inclusive of Mineral Reserves, totalling 1.4 million tonnes at 3.0 g/t Au and 238 g/t Ag, containing approximately 136,500 ounces gold and 10.8 million ounces silver;

• Average production of 800 tonnes per day (tpd) from underground (300,000 tonnes per year)

• All-In Sustaining Cost (AISC) of $1,038 per oz gold equivalent.

• Metallurgical recovery based on operating data averaging 91% for gold, 83% for silver;

• Average annual gold production of 21,000 ounces of gold and 1.7 million ounces of silver per year;

• Life of Mine (LOM) capital totals $41.7 million, including reclamation and closure costs.

The Casposo Technical Report summarizing the results of the Life of Mine Plan and updated Mineral Resource and Mineral Reserve Estimate is filed on the Company's profile on SEDAR (www.sedar.com) and the ASX website (www.asx.com.au). The RPA Qualified Persons (QPs) for the Casposo Technical Report include:

• Kathleen A. Altman, Ph.D., P.E. (metallurgy, processing, and environmental)

• Jason J. Cox, P.Eng. (mining, Mineral Reserves, costs, and economic analysis)

• Chester M. Moore, P.Eng., (geology and Mineral Resources)

This press release has been reviewed and approved by the RPA Qualified Persons.

About Austral Gold

Austral Gold Ltd. is a growing precious metals mining, development and exploration company building a portfolio of quality assets in Chile and Argentina. The Company's flagship Guanaco project in Chile is a low-cost gold and silver producing mine with further exploration upside. The company is also operator of the underground silver-gold Casposo mine in San Juan, Argentina. With an experienced local technical team and highly regarded major shareholder, Austral's goal is to continue to strengthen its asset base through acquisition and discovery. Austral Gold Ltd. is listed on the TSX Venture Exchange (TSXV: AAM) and the Australian Securities Exchange (ASX: AGD). For more information, please consult the company's website www.australgold.com

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.

For further information please contact:

Alison Crealy
info@australgold.com.au
+61 (2) 9380 7233

Mr Mike Brown
VP Corporate Development
mbrown@australgold.com.au
+1 604 568 2496

Forward Looking Statements

Statements in this news release that are not historical facts are forward-looking statements. Forward-looking statements are statements that are not historical, and consist primarily of projections - statements regarding future plans, expectations and developments. Words such as "expects", "intends", "plans", "may", "could", "potential", "should", "anticipates", "likely", "believes" and words of similar import tend to identify forward-looking statements. Forward-looking statements in this news release include; expectation that dilution will be reduced; expectation that optimisation of plant will improve operational efficiency; LOM, cash flow and other economic projections;; the future mine grades, recovering and production rates expected from Casposo; the estimation of mineral reserves and mineral resources; the realization of mineral reserve and mineral resource estimates; and the outlook for prices of gold and silver. All of these forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ from those expressed or implied, including, without limitation, business integration risks; uncertainty of production, development plans and cost estimates, commodity price fluctuations; political or economic instability and regulatory changes; currency fluctuations, the state of the capital markets, uncertainty in the measurement of mineral reserves and resource estimates, Austral's ability to extract mineralization at Casposo profitably and its ability to attract and retain qualified personnel and management, potential labour unrest, reclamation and closure requirements for mineral properties; unpredictable risks and hazards related to the development and operation of a mine or mineral property that are beyond the Company's control, the availability of capital to fund all of the Company's projects and other risks and uncertainties identified under the heading "Risk Factors" in the Company's continuous disclosure documents filed on SEDAR. You are cautioned that the foregoing list is not exhaustive of all factors and assumptions which may have been used. Austral cannot assure you that actual events, performance or results will be consistent with these forward-looking statements, and management's assumptions may prove to be incorrect. Austral's forward-looking statements reflect current expectations regarding future events and operating performance and speak only as of the date hereof and Austral does not assume any obligation to update forward-looking statements if circumstances or management's beliefs, expectations or opinions should change other than as required by applicable law. For the reasons set forth above, you should not place undue reliance on forward-looking statements.