Austral Gold Announces Filing of Q2 2021 Quarterly Activity Report

Sydney, July 30, 2021 - Austral Gold Ltd. (ASX: AGD) (TSXV: AGLD) (the "Company") is pleased to announce that it has filed its Q2 2021 Quarterly Activity Report. The complete Report is available under the Company's profile at www.asx.com.au, www.sedar.com and on the Company's website at www.australgold.com.

Chief Executive Officer, Stabro Kasaneva commented, "We have seen consistent monthly improvements at the Guanaco-Amancaya mine complex and expect production to gradually increase to achieve our annual guidance of 45,000-50,000 gold equivalent ounces. Our focus in 2021 is to extend the mine life at this operation. During the second quarter, we discovered two new veins at Amancaya as previously disclosed on 19 May 2021 and have extended the Central Vein at depth. We also continue to target high sulfidation gold and silver Tier 1 deposits in the Paleocene Belt in Chile consistent with our exploration strategy disclosed in our FY 2020 annual report. We currently have four exploration HS projects in the belt; Sierra Inesperada, Cerro Buenos Aires, and now an option agreement on Morros Blancos (adjacent to Amancaya) and Cerro Blanco. Additionally, we are drill testing Sierra Inesperada and plan to start drilling at Cerro Buenos Aires in September 2021."

Key quarterly highlights are as follows:

• Q2 2021 production gradually improving after completion of outsourcing to new UG mine contractor at Amancaya. A total of 8,351 gold equivalent ounces ("GEOs") (7,966 gold ounces and 26,332 silver ounces) were produced during the quarter, a 78% increase from Q1 2021.

• Cost of production ("C1") per GEO reduction to US$1,115 in Q2 2021, a 29% decrease from US$1,574 in Q1 2021 while all-in-sustaining cost ("AISC") was US$1,647 in Q2 2021, a 38% decrease from US$2,659 in Q1 2021. The quarterly average GEO selling price was US$1,830/oz.

• As previously announced in the Company's March 2021 quarterly activity report, the Company expects production to increase during the second half of the year and meet its 45,000-50,000 GEOs guidance provided for 2021. Consequently, we forecast average annual 2021 C1 and AISC per GEO to decrease to a range of US$850-US$950 and US$1,050- US$1,150 per GEO, respectively.

• Operating cash flow before changes in working capital was positive at US$3.3 million during Q2 2021 following the sale of 6,856 GEOs for proceeds of US$12.5 million. Cash at the end of the quarter was US$1.8 million and combined with the fair value of unsold ~2,000 gold ounces in inventory totaled US$5.4 million.

• Continued focusing on exploration and organic growth at its flagship Guanaco/Amancaya mine complex and discovered two new veins. Highlights from reported assays reported in our 19 May 2021 media release include:
  • DAM-024 2.41 meters @ 10.19 g/t gold and 55.2 g/t silver
  • DAM-026 1.17 meters @ 24.98 g/t gold and 77.3 g/t silver
  • DAM-019 4.27 meters @ 7.81 g/t gold and 33.0 g/t silver
  • DAM-016 1.8 meters @ 3.1 g/t gold and 1.5 g/t silver

• The work commitment program at Sierra Blanca project in Santa Cruz, Argentina, continued in accordance with the Option Agreement executed with New Dimension Resources on 13 October 2020.

• All resolutions were passed at the Company's 27 April 2021 Annual General Meeting.

• Executed an Option agreement with Pampa Metals where Austral may acquire up to an 80% interest in the Cerro Blanco and Morros Blancos properties (Chile) held by Pampa Metals. Further details are provided in the Company's 28 July 2021 announcement.

• At the end of Q2 2021, Austral participated in a cash call by Rawhide Acquisition Holding LLC ("Rawhide") and invested US$1 million. Austral's equity interest in Rawhide is now 23.25%.

• Ensign Gold ("Ensign") executed an option agreement with Barrick Gold for US$0.8 million (CDN$1.0 million) paid on signing, US$4.8 million (C$6 million) in exploration work commitments over a two-year period and a final cash payment of US$16 million (C$20 million) if Ensign exercises the option to acquire Barrick's 2,869 acre of mostly private ground. Barrick retained royalties over the properties under the agreement and was granted 3 million warrants at C$0.25 per share. The transaction would allow Ensign to fully consolidate the Mercur project. During July 2021, Ensign raised gross proceeds of US$7.4 million (C$9.16 million) through the issuance of equity. As a result of the financing, Austral's ownership in Ensign was diluted from 19.9% to 12.3%. The shares in the financing were issued at C$0.50/share, a 100% increase from the Austral investment of C$0.25/share.

About Austral Gold

Austral Gold Ltd. is a growing gold and silver mining, development and exploration company building a portfolio of quality assets in Chile, the USA and Argentina. 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 recent acquisition of Revelo Resources Corp.), a non-controlling interest in Pampa Metals and a 100% interest in the Pingüino project 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
+54 (11) 4323 7558

David Hwang
Company Secretary
Austral Gold Ltd.
info@australgold.com
+61 (2) 9698 5414

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/91662