Austral Gold Files Q2 2022 Quarterly Activity Report

Sydney, July 28, 2022 - Austral Gold Ltd. (ASX: AGD) (TSXV: AGLD) (the "Company") is pleased to announce that it has filed its Q2 2022 Quarterly Activity Report. The complete Report is available under the Company's profile at www.asx.com, www.sedar.com and on the Company's website at www.australgold.com/.

KEY QUARTERLY HIGHLIGHTS

• At the Casposo-Manantiales mine complex in Argentina, the second drilling campaign which started in Q1 2022 continued as part of our strategy to restart mining operations. Results were announced on 27 July 2022 and obtained from 5 new drillholes at the Manantiales vein. Best intercepts were at:

  • MDH-02-63: 4.40 meters @ 18.65 g/t gold and 58 g/t silver
    • including: 3.12 meters @ 26.04 g/t gold and 37 g/t silver
    • sub-including: 0.75 meters @ 76.26 g/t gold and 75 g/t silver
  • MDH-02-64: 2.35 meters @ 15.61 g/t gold and 81 g/t silver
    • including: 1.58 meters @ 22.30 g/t gold and 116 g/t silver
  • MDH-02-60: 2.50 meters @ 9.73 g/t gold and 49 g/t silver
    • including: 0.90 meters @ 25.48 g/t gold and 125 g/t silver
      
      

• At the Guanaco-Amancaya mine complex (Chile), production was 6,375 gold equivalent ounces ("GEOs") in Q2 2022 (13,868 GEOs during the first half of the year (1H 2022)). The Group expects production to increase during the second half of the year and meet its revised annual production guidance of 30,000-35,000 GEO's.

• Cost of production ("C1") per GEO was US$1,435 in Q2 2022 (US$1,404 in 1H 2022) while All-in-sustaining cost ("AISC") per GEO was US$1,850 in Q2 2022 (US$1,766 in 1H 2022).

• Average GEO selling price was US$1,879 per GEO in Q2 2022 (1H 2022 in US$1,869 per GEO). Cash flow generated from operating activities was US$3.7 million in Q2 2022 (1H 2022: US$4.5 million). Cash on hand was US$1.6 million and combined with the fair value of unsold and unrefined GEOs in inventory totaled US$3.9 million at 30 June 2022.

• During the June 2022 quarter, the Company invested US$1.1 million in exploration (US$2.4 million in 1H 2022) which also included the required expenditures to complete the first year work commitments at the Cerro Blanco and Morros Blancos projects in Chile and to advance with the second tranche of the Sierra Blanca project option in Argentina to acquire an additional 29% interest.

• All resolutions were passed at the Company's 27 May 2022 Annual General Meeting.

PRODUCTION

• Guanaco/Amancaya gold and silver production during the June 2022 quarter totaled 6,375 GEOs (or 6,165 gold ounces and 18,104 silver ounces), a 15% decrease from the March 2022 quarter and a 24% decrease from the June 2021 quarter. Total production for the first half of the year ended June 2022 (1H 2022) was 13,868 GEOs, a 6% increase from the 6-month period ended June 2021 (1H 2021).

• Quarterly production at Amancaya was lower than forecasted during the period mainly due to lower throughput, lower gold and silver grades, and lower plant inventory. The full impact of the Q1 2021 initiatives to increase production (hiring a new contractor as mining operator and another contractor to maintain the mining fleet and leasing additional mainly vertical drilling equipment) is expected to result in increased production during the second half of 2022 along with the Company's plan to mine higher grade ore. Q2 2022 production from Guanaco included 122 GEOs (Q1 2022: 211 GEOs, Q2 2021: nil GEOs) from historical heap material processed through the agitation leaching plant.

Quarterly and YTD Production figures

* Quarterly Weighted average of 24.84% (March 2022-24.84% and June 2021-26.46%).
** Au:Ag ratio is calculated at 86:1 Ag:Au for the June 2022 Quarter; 79:1 Au:Ag for the March 2022 Quarter and 68:1 Au:Ag for the June 2021 Quarter; 82:1 Ag:Au for 1H 2022 and 68:1 Ag:Au for 1H 2021 .

Forecasted Calendar 2022 Production and Costs:

• Production guidance for 2022 for the Guanaco and Amancaya Mine complex has been revised to 30,000-35,000 gold-equivalent ounces from 35,000 to 40,000 with forecasted C1 and AISC of US$1,250-US$1,350 and US$1,500-US$1,650 per GEO.

EXPLORATION

• During Q2 2022, the main exploration activities were as follows:

  • Brownfield:

    • Guanaco-Amancaya mine complex (Chile): Designed a new exploration program named "Near Mine" with the goal of reviewing opportunities to increase the mineral reserves, which are close to the existing infrastructure of the Amancaya Mine.

    • Casposo-Manantiales mine complex (Argentina): Completion of 1,234 meters of drilling at Manantiales and La Puerta Oeste veins, continuing with channel sampling at the La Puerta and Awada areas, and reviewing remnant mineral resources at the Casposo property. The most significant results were the extension of the south ore shoot (MDH-22-060) and the extension at depth of the north ore shoot (MDH-22-063) in Manantiales as follows:

      • The best result obtained to date is drillhole MDH-22-63, which intercepted a high-grade gold structure with a width of more than 4 meters. This intercept indicates that the best mineralisation control in Manantiales vein is related to the lower contact of the dacitic intrusive opening the potential along this discontinuity and at depth.

      • Results from the holes MDH-022-60 and MDH-022-64, confirmed the continuity of the blind ore-shoot previously intercepted by drillings MDH-022-57/58. In the case of hole MDH-022-60, opening the mineralisation at depth, while drillhole MDH-22-64 indicates mineralisation closer to the surface.

  • Greenfield:

    • Morros Blancos and Cerro Blanco (Chile): Designed the next drilling campaign for 1H 2023 as work commitments for 2022 under the option agreement were completed.

    • At Morros Blancos, all drillholes were relogged and surface rock geochemistry was revised. Field mapping commenced on the area named Morro Colorado with focus on the structural setting and the identification of phreatomagmatic centers. At Cerro Blanco, expansion of the high-resolution ground magnetometry was completed.

    • Sierra Inesperada (Chile): A new drilling program of 800 to 1,000 meters was designed and is expected to commence in Q4 2022. The plan is to drill intercepts obtained in previous drilling campaigns and test new conceptual target.
      
      Sierra Blanca-Pinguino (Argentina): The relogging and the first schematic section of the Chala Vein confirmed historic economic intercepts. We expect to perform follow-up exploration activities this year including a systematic grid sampling that we started designing.

About Austral Gold
Austral Gold Ltd. is a growing gold and silver mining, development and exploration company whose strategy is to expand the life of its cash generating assets in Chile, restart its Casposo mine in Argentina and build a portfolio of quality assets in Chile, the USA and Argentina organically through a Tier 1 or 2 exploration strategy and via acquisitions and strategic partnerships. Austral owns a 100% interest in the Guanaco/Amancaya mine in Chile and the Casposo Mine (currently on care and maintenance) in Argentina, a non-controlling interest in the Rawhide Mine in Nevada, USA and a non-controlling interest in Ensign Gold which holds the Mercur project in Utah, USA.

In addition, Austral owns an attractive portfolio of exploration projects in the Paleocene Belt in Chile (including those acquired in the 2021 acquisition of Revelo Resources Corp.), a noncontrolling interest in Pampa Metals and a 100% interest in the Pingüino project and a 51% interest in the Sierra Blanca project, both in Santa Cruz, Argentina. Austral Gold Ltd. is listed on the TSX Venture Exchange (TSXV: AGLD) and the Australian Securities Exchange. (ASX: AGD). For more information, please consult Austral's website at www.australgold.com.

Neither 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.

Release approved by the Chief Executive Officer of Austral Gold, Stabro Kasaneva.

For additional information please contact:

Jose Bordogna
Chief Financial Officer
Austral Gold Ltd.
Jose.bordogna@australgold.com
+61 4666 892 307

Ben Jarvis
Director
Austral Gold Ltd.
info@australgold.com
+61 413 150 448

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 the Company's the Company's 2022 forecasted production guidance and costs, the Company's expectation for production to increase during the second half of the year and meet its revised annual production guidance of 30,000-35,000, due to the Company's plans to mine higher grade ore, and planned future exploration activities.

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 especially in light of the effects of the novel coronavirus,, uncertainty in the measurement of mineral reserves and resource estimates, Austral's 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 the ASX and 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.

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