Mr. Stabro Kasaneva reports

AUSTRAL GOLD ANNOUNCES US$1M NON-BROKERED PRIVATE PLACEMENT

Austral Gold Ltd. has entered into an agreement to issue up to approximately 1.6 million non-transferable unsecured convertible notes, each having a face value of $1 (Australian), to one arm's-length accredited and sophisticated investor for gross proceeds of $1-million (U.S.), or approximately $1.6-million (Australian).

The number of notes will be determined by converting the gross proceeds into equivalent Australian dollars. The notes are to bear interest at a rate of 9% per annum and mature on the second anniversary of the date they are issued. Each note will entitle the holder to convert the notes into ordinary shares of the Company at the holder's option at a conversion price of AUD$0.059 (approximately C$0.051) per share during the first year and AUD$0.118 (approximately C$0.103) during the second year.

The Company intends to use the proceeds raised from this private placement for working capital and to repay outstanding debt.

The transaction is subject to acceptance by the TSX Venture Stock Exchange and the notes and the underlying conversion shares will be subject to a four month hold period as required by applicable Canadian law. The notes will not be listed on any public market. The convertible notes may not be converted until after four months and one day from the date the unsecured convertible notes are issued.

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.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

CHILE

Paleocene Belt, Chile

Guanaco District

Amancaya District

Las Pampa District

ARGENTINA

Triassic Choiyoi Belt

Indio Belt

Deseado Massif

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)

We seek Safe Harbor.