Austral Gold acquires a further 19% of Casposo Mine
Austral Gold Limited ABN 30 075 860 472 ASX:AGD TSXV:AGLD
Suite 203, 80 William St, Sydney NSW 2011 | T +61 2 9380 7233 | F +61 2 8354 0992 | [email protected] | www.australgold.com.au
MEDIA RELEASE
Austral Gold Limited
6 March 2017
Austral Gold acquires a further 19% of Casposo Mine
Austral Gold Limited (‘Austral’ or ‘the Company’) (ASX: AGD; TSXV: AGLD) is pleased to announce that
the Company has paid US$1 million to Troy Resour ces Limited (‘Troy’) (ASX: TRY) to acquire an
additional 19% interest in the Casposo silver-gold mine located in San Juan, Argentina (‘Casposo’).
Highlights:
Austral has paid US$1 million to increase its stake in Casposo silver-gold mine by 19%,
bringing total ownership to 70% as per the agreement with Troy.
A further US$1 million was also paid from Casposo to Troy as part of the agreement
related to the collection of VAT credits outstanding at the time of Austral acquisition (the
“Deferred Payment”).
Austral has markedly improved Casposo’s operations since assuming management of the
mine.
Following Austral acquiring operatorship through an agreement entered into with Troy in March 2016,
Austral recommissioned the mine and plant and commenced full operations in November 2016.
Since it started operating Casposo, Austral has made significant progress in a number of areas including
changes to the workforce, key changes to the e quipment used in underground production, economies of
scale, amongst others. Operational benefits have also been realised from implementing processes used
in Austral’s other producing mine, Guanaco Mine, and though improvements in the processing plant.
“The Casposo mine is a key piece of our growth strategy, with a large resource and significant potential
for growth in the resource and new discoveries through brownfield and regional exploration”, stated
Stabro Kasaneva, CEO of Austral. “We are working towards our targeted production rates as we adapt
the mine and workforce to narrow vein mining methodology. This has brought its challenges, but we are
confident we are now on the path to meet our targets”.
To date, Austral has invested US$5.8 million on developing Casposo and recommissioning operations,
US$4.3 million from internal cash reserves and US$1.5 million through external financing.
Casposo agreement
Under the agreement between Austral and Troy signed in March 2016, Austral paid US$1 million for 51%
operatorship and undertook to fund up to US$10 million in studies and CAPEX to recommission the mine.
Austral was entitled to acquire a further 19% of Casposo by paying US$1 million.
Troy was also entitled to receive US$2 million in deferred payments, with US$1 million paid in September
2016 and the remaining US$1 million being the Deferred Payment.
Austral still has options to acquire the remaining 30% as follows:
Austral Gold Limited ABN 30 075 860 472 ASX:AGD TSXV:AGLD
Suite 203, 80 William St, Sydney NSW 2011 | T +61 2 9380 7233 | F +61 2 8354 0992 | [email protected] | www.australgold.com.au
10% for US$1,500,000 in December 2018;
10% for US$2,500,000 in December 2019; and
10% for US$3,000,000 in December 2020.
The exercise price of each option is subject to adjustment if the price of silver is at US$16/oz Ag or
greater.
Qualified Persons
The scientific and technical content of this news re lease has been prepared by, or under the supervision
of Michael Brown, MAIG, and has been reviewed and approved by him. Mr Brown is a Geologist and
Member of Australian Institute of GeoScientists and an employee of Austral Gold Limited. Mr Brown is a
“qualified person” for the purposes of National Instrument 43-101, Standards of Disclosure for Mineral
Projects.
About Austral Gold
Austral Gold Limited is a growing precious me tals mining, development and exploration company
building a portfolio of quality assets in Chile and Argentina. The Company's flagship Guanaco mine in
Chile is a low-cost gold and silver producing mine with further exploration upside. The Company is also
operator of the underground silver-gold Casposo mine in San Juan, Argentina. With an experienced
local technical team and highly regarded major shareho lder, Austral’s goal is to continue to strengthen
its asset base through acquisition and discovery. Austral Gold Limited is listed on the TSX Venture
Exchange (TSX-V:AGLD), and the Australian Securities Exchange (ASX: AGD). For more information,
please consult the company’s website www.australgold.com.
Neither TSX Venture Exchange nor its Regulation Servic es Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this
release.
On behalf of Austral Gold Limited:
"Stabro Kasaneva"
CEO
For additional information please contact:
Alison Crealy (Australia) Mike Brown (Canada)
[email protected] [email protected]
61 (2) 9380 7233 1 604 568 2496 ext 21
José Bordogna (South America)
54 11 4323 7558
Austral Gold Limited ABN 30 075 860 472 ASX:AGD TSXV:AGLD
Suite 203, 80 William St, Sydney NSW 2011 | T +61 2 9380 7233 | F +61 2 8354 0992 | [email protected] | www.australgold.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 consis t 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 expectation that it could be in
a position to make a production decision on Casposo very shortly; its anticipation that the new mining methods
being adopted at Casposo will impact operations positively going forward; the Company’s production projection for
Guanaco for calendar 2017 of 45,500-51,000 ounces of Gold (AuEq oz); its expectation that construction of the
new agitation leach plant (Merrill-Crowe circuit) will be completed by the end of March 2017 and that the pre-
feasibility study from Roscoe Postle & Associates should be completed by the end of the first quarter of 2017; and
its expectation that production for the calendar year 201 7 will be 50,000 gold equivalent ounces with a goal of
reaching an AISC of US$957 per ounce, and expectation that it will pay $1 million to Troy Resources in March
2017 to earn an additional 19% of Casposo. All of these fo rward-looking statements are subject to a variety of
known and unknown risks, uncertainties and other factors t hat 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, 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 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.