Austral Gold Obtains US$2M Related Party Loan

Sydney, September 25, 2024 - Established gold producer Austral Gold Ltd. (ASX: AGD) (TSXV: AGLD) (OTCQB: AGLDF) ("Austral" or the "Company") is pleased to announce that Inversiones Financieras del Sur SA ("IFISA") has agreed to lend it the sum of US$2.0 million (the "Loan").

IFISA is the Company's largest shareholder and two of the Company's directors, Mr. Eduardo Elsztain and Mr. Saul Zang, are also directors and shareholders of IFISA, and the loan is therefore considered to be a 'related party' transaction.

Material terms of the Loan:

• Amount: US$2.0 million;
• Interest Rate: 7% per annum;
• Term: 24 months;
• Use of proceeds: working capital;
• Collateral: Up to 20,190,791 shares of Unico Silver Ltd. ("Unico") shares ("Unico Shares") held by Austral Gold Canada Limited ("AGCL"), a wholly owned Canadian subsidiary of the Company. The grant of the Collateral as security and guarantee is conditioned on receipt of shareholder approval on a majority of the minority basis;
• Shareholder Approval: The Company will hold a meeting to obtain shareholder approval, with IFISA and its related parties to abstain from voting, to grant a security interest in the Unico Shares.
• Repayment: Repayment of the Loan will be in cash and/or in Unico Shares (at the election of Austral). Where repayment is to occur in part (or in whole) by Unico shares then the value of the Unico shares will be equal to the greater of:
  • the 5-day volume-weighted average price; and
  • the closing price,

of the shares of Unico on the ASX on the trading day immediately prior to the date of transfer of the Unico Shares to IFISA;

• Early repayment: No cost at the Company's discretion; and
• Share Restriction: AGCL cannot sell the Unico Shares (which form the Collateral) prior to the repayment of the Loan (in full) without written authorisation from IFISA.

The Loan is exempt from the shareholder approval requirements provided for in TSXV Policy 5.9 as contemplated in Part 5.7(a) Multilateral Instrument 61-101, although the sale of the Unico Shares, when aggregated with prior sales to IFISA (as the lender) and its principals, would exceed the exemption amount. It is for this reason that the security interest over the Unico Shares is conditioned on shareholder approval as described above.

The Board of Directors of Austral, with the exception of the interested directors (being Mr. Eduardo Elsztain and Mr. Saul Zang) who excused themselves, have approved the Loan, including the terms described above (noting that the security interest is subject to shareholder approval). The Board, with the exception of those interested directors, are of the view that the terms of the Loan, and the form of the underlying loan agreement, without regard to the security interest, are as reasonable (or better) than if Austral and IFISA were dealing at arm's length.

It is intended that the aggregate number of Unico shares available for recovery on enforcement under the security interest would be equivalent to the amount owed under the Loan and interest.

If Austral does not repay the Loan by way of transfer of the Collateral, the Company plans to repay the Loan in cash by the repayment date of September 2026 from future gold and silver sales from its 100%-owned Guanaco-Amancaya mine complex.

The Company's requirement for cash outside of operations in the near term is primarily due to delays in repairing critical equipment (high-pressure grinding roll HRC 800 equipment) which adversely impacted production during the six months ended 30 June 2024 as previously announced through press releases and quarterly reports during 2024.

The transaction reflects the continued ongoing financial support from the Company's major shareholder to partially fund operations while it completes the installation and commissioning of equipment at its 100%-owned Guanaco-Amancaya mine complex and monthly production gradually increases.

About Austral Gold Limited

Austral is a growing gold and silver mining producer building a portfolio of quality assets in the Americas based on three strategic pillars: production, exploration and equity investments. Austral continues to lay the foundation for its growth strategy by advancing its attractive portfolio of producing and exploration assets.

For more information, please visit the Company'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 Company's Chief Executive Officer of Austral Gold, Stabro Kasaneva.

For additional information please contact:

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 those concerning the timing of the Loan, the Company's use of the proceeds, the Company's plan to hold a meeting to obtain shareholder approval on a majority of the minority basis, to use the Collateral to repay the Loan, and the Company's intent to repay the Loan in cash if the shareholders do not approve application of the Collateral for that purpose.

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, uncertainty of exploration programs, 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 resources and reserves and other risks and hazards related to the exploration of a mineral property, and the availability of capital. 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.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/224647