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Austral Gold Ltd
Symbol AGLD
Shares Issued 566,065,407
Close 2020-12-21 C$ 0.205
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Austral Gold to outsource Amancaya mine operation

2020-12-21 10:12 ET - News Release

Mr. Stabro Kasaneva reports

AUSTRAL GOLD PROVIDES OPERATIONS UPDATE

Austral Gold Ltd. has decided to outsource its underground mine operation at its 100-per-cent-owned Amancaya mine and certain maintenance activities at its Guanaco processing plant, effective January, 2021. Austral is in final negotiations with contractors that will bring new technologies and skills that the company expects will increase the efficiency and stability of its operations.

The outsourcing decision was based on the company's focus to increase its mineral reserve inventory in Argentina and Chile and the challenges of operating at deeper underground levels. Amancaya is a high-grade satellite mine located about 60 kilometres from the Guanaco mining complex.

As a result of the restructuring, Austral plans to take an after-tax charge of $3-million (U.S.). It is expected that the transition to the mining contractor at Amancaya will impact production in January, 2021, with operations resuming in February. Austral will continue to provide mine planning and grade control at the operation.

2020/2021 guidance

Production at the Guanaco/Amancaya mines was 52,487 gold equivalent ounces for the 11-month period ended Nov. 30, 2020 (49,718 gold ounces and 244,961 silver ounces); and the company remains on track to achieve its guidance of about 55,000 gold equivalent ounces provided for calendar year 2020.

Production guidance for 2021 is estimated in the range of 50,000 to 55,000 gold equivalent ounces. Further details of the projected cash cost (C1) and all-in-sustaining cost (AISC) will be included in the December, 2020, quarterly report and is expected to remain in the lower quartile of industry costs.

Chief executive officer Stabro Kasaneva commented, "We expect the outsourcing of our mining operations at Amancaya will lead to production efficiencies as we increase our focus on exploration in Chile and Argentina with the goal of building a growing sustainable future."

About Austral Gold Ltd.

Austral Gold is a growing gold and silver mining, development and exploration company building a portfolio of quality assets in Chile, the United States and Argentina. Austral owns a 100-per-cent interest in the Guanaco/Amancaya mine in Chile and the Casposo mine (care and maintenance) in Argentina and a 26.46-per-cent interest in the Rawhide mine in Nevada. In addition, Austral owns an attractive portfolio of exploration projects in the Paleocene belt in Chile and a 100-per-cent interest in the Pinguino and Sierra Blanca projects in Santa Cruz, Argentina. Austral Gold is listed on the TSX Venture Exchange and the Australian Securities Exchange.

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