Diamond Drilling Returns Gold and Silver Intercepts at Jaguelito Project, Argentina

HIGHLIGHTS

• Gold and silver mineralisation intersected by diamond drilling at the Jaguelito Project, located within Argentina's prolific El Indio Gold Belt close to the Barrick's Veladero gold mine and Altura's project.
  
  
• Best intercepts from assays of seven drill holes received:
  
  Capote-Alcatraz target DJN-003: 26m @ 0.60 grams per tonne (gpt) gold and 7 gpt silver
  (Norte Zone) Including 1.5m @ 1.12 gpt gold and 45 gpt silver
  
  DJN-004: 21m @ 1.24 gpt gold and 1 gpt silver
  Including 3.0m@ 3.32 gpt gold and <0.5 gpt silver
  
  La Cuña Norte target DJN-006: 4m@ 1.40 gpt gold and 26 gpt silver
  (Norte Zone)

Sydney, April 24, 2023 - Established gold producer Austral Gold Ltd. (ASX: AGD) (TSXV: AGLD) (the "Company" or "Austral") has encountered gold and silver mineralisation in drilling at the Jaguelito Project, within Argentina's prolific El Indio Gold Belt.

In accordance with our option agreement with Mexplort Perforaciones Mineras SA ("Mexplort") ^[1], Austral has completed 3,744m over 14 holes of its 5,000m diamond drilling campaign since December 2022 to acquire 50% of the advanced exploration project, which has a high-potential for high-sulfidation epithermal gold and silver deposits.

Up to eight targets have been identified across two zones, Norte and Sur. Further drilling is underway at La Cuña Norte (Norte) and Sagitario (Sur) targets.

Austral Gold's Chief Executive Officer, Stabro Kasaneva said: "We are encouraged by the program, the initial results confirm our geological understanding of the structural mineralisation controls of the project related to the northwest direction, which are key in the development of important HS-type epithermal deposits during the Miocene period in the region. We expect to complete the drill program and announce the remaining assay results in Q2 2023."

Figure 1. Jaguelito Project in close proximity to Barrick's Veladero Gold Mine and Alturas project.

To view an enhanced version of this graphic, please visit:
https://images.newsfilecorp.com/files/690/163535_f8a3e39fa41caa2e_003full.jpg

Figure 2. Jaguelito Project showing Norte and Sur geographical target areas.

To view an enhanced version of this graphic, please visit:
https://images.newsfilecorp.com/files/690/163535_f8a3e39fa41caa2e_004full.jpg

FIRST EXPLORATION STAGE

5,000m drilling program in Jaguelito Norte and Jaguelito Sur target areas.

Jaguelito Norte Target Area

Five drilling targets were identified and three targets were tested, Alcatraz, La Cuña Norte, and La Cuña Sur.

The program prioritises the Capote - Alcatraz sector under a new concept of gold ore controlled northwest direction and drilling of the La Cuña maar-diatreme complex, which we recently identified as the major control of the hydrothermal system in the region. The third target corresponds to the satellite body of the Guanaco Breccia.

Figure 3. Jaguelito Norte target area showing Alcatraz and La Cuña drill targets.

To view an enhanced version of this graphic, please visit:
https://images.newsfilecorp.com/files/690/163535_f8a3e39fa41caa2e_005full.jpg

Alcatraz target

• This target consists of a 120 x 80m mineralised body controlled by the contact between phreatomagmatic breccias and a dacite dome, developed mainly in the dacitic rocks.
• Results from drill hole DJN-003 validate Au mineralisation (< 1gpt) in the phreatomagmatic breccia, vectoring eastward towards the high-grade shell hosted on dacitic rocks.
• Drillhole DJN-004 intercepted mineralisation associated to strongly advanced argillic alteration (vuggy silica ± quartz-alunite + Jar/Hem), confirming the presence of mineralisation hosted in dacites in the contact zone with phreatomagmatic breccias and the continuity of the Alcatraz >1gpt Au mineralisation to the Northwest.

La Cuña Norte target

• Drill holes DJN-006 and DJN-010 intersected extensive columns of phreatomagmatic rocks from surface, with mineralised intercepts associated with the contact between the dacite domes and the basement (Choiyoi), similar to the structural control validated in the Capote-Alcatraz targets.
• Drill holes DJN-008 and DJN-009 intersected several intervals of phreatomagmatic tuff breccias with intermittent alteration to vuggy silica ± quartz-alunite and silicification. The Company interprets this as peripheral facies of a larger phreatomagmatic system located to the southeast (Cerro Jaguelito), and also limits the southward extension of the La Cuña Norte phreatomagmatic complex.

La Cuña Sur target

• Drill holes DJN-011 and DJN-012, aimed to intercept diatremes associated with crater facies identified on the surface at elevations greater than 4,500 m.a.s.l., traversed thick columns of dacitic rocks, suggesting the presence of post-phreatomagmatic domes emplaced within the ducts.

Guanaco Breccia target

• Drill hole DJN-005 confirmed the existence of a concealed phreatomagmatic system. At least two brecciation events where identified which imply a multistage evolution. Both the strong illite-smectite-pyrite alteration and the lack of fertile advanced argillic alteration in the expected mineralisation level (3,915 to 3,990 m.a.s.l.) suggests an extension towards the La Cuña target in the East.

Jaguelito Sur Target Area

Preliminary work identified five structures related to phreatomagmatic activity that suggest alteration and potential mineralisation in the sector. Three targets will be tested by approximately 1,500m of drilling.

Sagitario target

• Sagitario target shows, in outcrops and historical drillings, conduit facies of a phreatomagmatic complex with intense silicification and coincident geochemical anomalies of gold, silver and toxic elements. Initial drilling is currently underway.

Alumbre target

• Alumbre target is located in the central part of Jaguelito Sur and consists of at least three phreatomagmatic breccia conduits that cut the andesitic basement. Five historic drill holes (1,777m) only superficially tested the edges of the area.

Brecha Siete target

• Brecha Siete, located on the eastern slope of Jaguelito Sur, is an early-stage target characterised by strongly altered phreatomagmatic breccias that cut through the basement following a NW structural control.

Figure 4. Jaguelito Sur target area showing Alumbre and Sagitario drill targets.

To view an enhanced version of this graphic, please visit:
https://images.newsfilecorp.com/files/690/163535_f8a3e39fa41caa2e_006full.jpg

Table 1: Jaguelito Drill results

JAGUELITO OPTION AGREEMENT OVERVIEW

The drill program is being conducted in accordance with the option agreement with Mexplort announced on 11 February 2022 whereby Austral may acquire a 50% interest in the Jaguelito Project by performing the following work commitments within the next three years:

• US$2 million in exploration expenditures, including drilling a minimum of 5,000m at Jaguelito by 10 August 2024, two years after the Agreement was approved by the Instituto Provincial de Exploraciones y Explotaciones Mineras de la Provincia de San Juan IPEEM, and
• US$2 million in exploration expenditures within two years after completing the First Stage (the "Second Stage").

Austral has invested US$2.7 million and drilled 3,744m of the 5,000m required in the First Stage. Any funds exceeding the initial US$2.0 million will be allocated towards the Second Stage.

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 more information please contact:

Jose Bordogna
Chief Financial Officer
Phone: +61 466 892 307
jose.bordogna@australgold.com

Gareth Quinn
Media and Investor Relations
Phone +61 417 711 108
gareth@republicpr.com.au

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 the Company's expectations to complete the drill program and announce the remaining assay results in Q2 2023 and the Company's interpretations of drill results as peripheral facies of a larger phreatomagmatic system located to the southeast (Cerro Jaguelito).

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.

Competent Person

Technical information in this media release that relates to Exploration Results is based on work supervised, or compiled on behalf of Robert Trzebski, a Director of the Company. Dr. Trzebski, who is a member of the Australasian Institute of Mining and Metallurgy (AusIMM) and qualifies as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves' consents to the inclusion of the technical information that he has reviewed and approved or has been compiled on his behalf.

About Jaguelito

The Jaguelito Project is an advanced exploration stage project located in located in one of the main districts of precious metals worldwide; the El Indio - Pascua Lama district in the Province of San Juan, Argentina. Its deposits, of the high sulfidation epithermal type of Miocene age, include mines in production, construction and exploration.

The Jaguelito project covers an area of 11,000 approximately hectares, and over 150 holes (~30,000m) were drilled by previous owners (Minera Peñoles, Minera IRL) between 1996 and 2009. It is located approximately 225km northwest of the city of San Juan in Valle del Cura, Iglesias Department, San Juan Province, Argentina. Its central coordinates are 29° 46' 20" West Latitude, 69° 38' 15 South Longitude and a variable altitude between 3,600 and 4,300 meters above sea level. Jagüelito is a high sulfidation epithermal deposit related to a Miocene volcanism hosted in basement of Permo-Triassic age. Its mineralisation is related to a hydrothermal system controlled by northeast-southwest oriented faults and hosted in porouspermeable volcaniclastic units. These rocks allowed the circulation of precursor acidic hydrothermal fluids that strongly altered the rocks through which they circulated, generating a secondary porosity or vuggy silica, in the alteration cores. The high porosity product of the alteration served as a conduit for the posthumous hydrothermal fluids responsible for the mineralisation of gold and silver.

About Austral Gold

Austral Gold is a growing gold and silver mining producer building a portfolio of quality assets in the Americas. Austral continues to lay the foundation for its growth strategy by advancing its attractive portfolio of producing and exploration assets.

OPERATIONS

• Guanaco and Amancaya mines, Antofagasta Province, Chile (100% interest)

Open pit and underground.

2022 Production: 27,686 gold equivalent ounces

2023 Forecast: 34,000-38,000 gold equivalent ounces

Recently extended the life of mine with an expected production level of 30,000-35,000 gold equivalent ounces per year over the next three to four years, plus a further 10,000 gold equivalent ounces of production per year for the following seven to eight years until 2033 per the 43-101 Technical Report on the Guanaco-Amancaya Operation, Antofagasta Region, Chile, dated 25 March, 2022, with an effective date of 31 December 2021.

• Casposo/Manantiales Mine Complex, San Juan Province, Argentina (100% interest)

Gold and silver mine currently in care and maintenance. Strategy is to restart profitable mining operations.

EXPLORATION

EQUITY INVESTMENTS

• Unico Silver Limited, an ASX listed company (17% interest)
  
  
• Rawhide Mine, private vehicle, Fallon, Nevada, USA (24% interest)
  
  
• Ensign Minerals Inc., private vehicle, Utah, USA (12% interest)
  
  
• Pampa Metals Corp., a CSE listed company (5.5% interest)

^[1] Refer Media Release dated 2 December 2022 Austral Gold begins drilling at Jaguelito in Argentina

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/163535