AGLD.V · 2017-06-08 12:00:00

Austral Gold Announces Maiden Reserve Estimate for Amancaya Project and Updated Reserve and Resource Estimate at Guanaco Mine, Chile

Resource Estimates

Austral Gold Announces Maiden Reserve Estimate for

Amancaya Project and Updated Reserve and Resource

Estimate at Guanaco Mine, Chile

Vancouver, British Columbia--(Newsfile Corp. - June 8, 2017) - Austral Gold Limited (ASX: AGD) (TSXV: AGLD) ("Austral" or

the "Company") is pleased to announce that Roscoe Postle Associates Inc. ("RPA") has completed a new independent

resource and reserve estimate in accordance with CIM Definition Standards, 2014 as incorporated in National Instrument ("NI")

43-101 and Joint Ore Reserves Committee Code, 2012 (JORC12) for the Company's 100% owned Amancaya project and

Guanaco Mine, Chile. The Amancaya reserve estimate is the first in that project's existence.

Highlights:

Amancaya*:

●

Total Indicated resource at Amancaya of

804,690 t

onnes at 9.64 g/t gold and 80.7

g/t silver for 277,352 Gold

Equivalent ("AuEq") ounces

, including;

A maiden

probable reserve

948,053 tonnes grading 6.77 g/t gold and 63.

g/t silver for 232,07

AuEq ounces,

including

;

A maiden open pit

probable reserve

254,596 tonnes grading 7.56 g/t gold and 119.

g/t silver for

74,993 AuEq ounces

●

Total inferred resource at Amancaya of

959,554 t

onnes at 6.79 g/t gold and 36.1

g/t Ag for 220,000 AuEq

ounces.

Guanaco*:

●

Measured and Indicated resource of

2,193,000 tonnes gra

ding 2.9 g/t gold and 13.0

g/t silver for 217,000

AuEq ounces,

including

;

●

Total reserve

of 489,635 tonne

s grading 2.99 g/t gold and 3.6

g/t silver for 47,907 AuEq ounces,

including;

Proven reserve

189,613 tonnes grading 3.41 g/t gold a

nd 4.1

g/t silver for 21,106 Au

Eq ounces,

and,

Probable reserve

300,022 tonne

s grading 2.73 g/t gold and 3.4

g/t silver for 26,801 AuEq

ounces.

●

Inferred resource:

1,200,000 tonnes grading 2.6 g/t gold and

12.9

g/t silver for 110,000 AuEq ounces.

*See tables below for assumptions used in the estimates.

"We are very pleased with this maiden reserve and resource estimate at Amancaya. It confirms the high grade nature of the

Amancaya project and our expectation that Amancaya will play a significant part in our growth plans," stated Stabro Kasaneva,

CEO of Austral Gold. "The Amancaya project is a unique asset; high grade gold and silver vein outcropping at surface that is

fully permitted, pre-stripping has commenced and ore is being stock piled, pending the imminent commissioning of the new

processing plant. The pre-feasibility study that evaluates the combined production from the Amancaya project with the operating

Guanaco mine, including its new processing plant, is expected shortly. We are expecting that this study will reveal a financially

robust combined operation located in a very attractive jurisdiction."

Amancaya Reserve and Resource Estimate

RPA undertook the study based on company infill drilling and exploration activities completed in 2016 and previous work done

on the project by other companies. Full details and assumptions used will be available when the Technical Report summarizing

the Pre-Feasibility study is filed on SEDAR and ASX within 45 days.

Table 15

Amancaya Mineral Reserves — as at December 31, 2016

Austral Gold Ltd. — Guanaco and Amancaya Gold Project

Category

Area

Tonnage

AuEq

(t)

(g/t)

(oz)

Underground

Proven

Cachinalito West

172,468

3.47

2.9

3.51

19,238

15,876

19,451

Probable

Cachinalito West

281,971

2.77

3.0

2.81

25,141

27,302

25,507

Total

Cachinalito

West

454,439

3.04

3.0

3.08

44,379

43,178

44,958

Proven

Dumbo West

11,178

3.38

4.7

3.44

1,215

1,695

1,238

Probable

Dumbo West

14,256

2.29

7.5

2.39

1,049

3,446

1,095

Total

Dumbo West

25,434

2.77

2.85

2,264

5,141

2,333

Proven

Perseverencia

5,967

1.67

37.8

2.18

321

7,242

418

Probable

Perseverencia

3,795

1.43

14.4

1.63

175

1,755

198

Total

Perseverencia

9,762

1.58

28.

1.96

496

8,998

616

Total Proven

All

189,613

3.41

4.1

3.46

20,774

24,813

21,106

Total Probable

All

300,022

2.73

3.4

2.78

26,365

32,503

26,801

Total Reserves

All

489,635

2.99

3.04

47,139

57,316

47,907

Notes:

Mineral Reserves followed CIM definitions, 2014 and are compliant with the JORC Code.

Mineral Reserves are estimated at a break-even cut-off grade of 2.0 g/t AuEq for stopes and an incremental cut-off grade of

1.0 g/t AuEq for drifts.

Mineral Reserves are estimated using an average long-term gold price of US$1,300 per ounce and silver price of US$20 per

ounce.

Gold Equivalents (AuEq) were calculated as AuEq = Au + 0.0134 x Ag, based on a Au and Ag price of $1,300/oz and $20/oz

and recoveries of Au and Ag of 92% and 80%, respectively.

A minimum mining width of 1.5 m was used for stopes and 3.5 m for drifts.

Stope dilution: 0.5 m in the hanging wall and 0.5 m in the footwall (1.0 m total).

Drift dilution: 0.25 m in each of the side walls (0.5 m total).

Bulk density is 2.5 t/m

Numbers may not add due to rounding.

Resources

Table 14-2

Guanaco

Mineral Resources — as at December 31, 2016

Austral Gold Ltd. — Guanaco & Amancaya Gold Project

Tonnes

Grades

Ounces

Deposit

(kt)

Au (g/t)

Ag (g/t)

AuEq (g/t)

Au (koz)

Ag (koz)

AuEq

(koz)

Measured

Cachinalito Central

111.4

4.37

3.7

4.42

15.6

12.4

15.8

Cachinalito West

164.0

3.03

3.5

3.08

16.0

18.3

16.2

Defensa

81.9

2.52

25.7

2.86

6.63

67.5

7.54

Dumbo West

102.9

3.43

9.7

3.56

11.3

31.9

11.8

Perseverancia

180.8

2.17

23.4

2.48

12.6

136

14.5

Natalia

Total Measured

641

3.02

12.9

3.19

62.2

266

65.8

Indicated

Cachinalito Central

235.3

3.98

3.9

4.03

30.1

29.4

30.5

Cachinalito West

350.0

2.91

3.6

2.95

32.7

41.0

33.2

Defensa

303.0

2.56

22.3

2.86

25.0

217

27.9

Dumbo West

320.8

3.13

10.6

3.28

32.3

110

33.8

Perseverancia

Natalia

342.5

2.03

23.0

2.34

22.4

253

25.8

Total Indicated

1,552

2.86

13.0

3.03

143

650

151

Inferred

Cachinalito Central

197

3.9

4.7

3.9

Cachinalito West

2.7

4.0

2.7

Defensa

2.4

22.0

2.7

Dumbo West

693

2.4

17.0

2.7

369

Perseverancia

134

2.1

10.0

2.2

Natalia

2.2

12.0

2.4

Total Inferred

1,200

2.6

12.9

2.8

100

500

110

Underground

Measured

641

3.02

12.9

3.19

266

65.8

Indicated

1,552

2.86

13.0

3.03

143

650

151

Total M + I

2,193

2.90

13.0

3.08

205

916

217

Inferred

1,200

2.6

12.9

2.8

100

500

110

Notes:

Mineral Resources followed CIM definitions, 2014 and are compliant with the JORC Code.

Mineral Resources are reported exclusive of Mineral Reserves and do not include dilution.

Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.

Mineral Resources are reported at a 1.5 g/t AuEq cut-off grade where AuEq = Au + (0.0134 * Ag).

Mineral Resources are estimated using a long-term gold price of US$1,300 per ounce, and a silver price of US$20 per

ounce.

Gold Equivalents (AuEq) were calculated as AuEq = Au + 0.0134 x Ag, based on a Au and Ag price of $1,300/oz and $20/oz

and recoveries of Au and Ag of 92% and 80%, respectively.

A minimum mining width of 1.5 m was not used for the estimation of the Mineral Resource.

Bulk density is 2.50 t/m

Numbers may not add due to rounding.

There are no known legal, political, environmental, or other risks that could materially affect the potential development of the

Guanaco and Amancaya mineral resources or mineral reserves.

QUALIFIED PERSONS

The Amancaya and Guanaco Reserve and Resource Estimate was prepared in accordance with CIM Definitions 2014 in NI 43-

101 and a Technical Report will be filed under the Company's profile on SEDAR and ASX within 45 days of this press release.

The RPA Qualified Persons (QPs) for the Amancaya and Guanaco Reserve and Resource Estimate include:

●

Jason J. Cox, P.Eng. (Mineral Reserves)

●

Ian Weir, P.Eng. (Mineral Reserves)

●

Ian Weir, P.Eng. (Mineral Reserves)

●

Chester M. Moore, P.Eng., (Mineral Resources)

This press release has been reviewed and approved by the RPA Qualified Persons.

About Austral Gold

Austral Gold Limited is a growing precious metals mining, development and exploration company building a portfolio of

quality assets in Chile and Argentina. The Company's flagship Guanaco project 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, where it has 70% ownership. With an experienced local technical team and highly regarded major

shareholder, 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 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.

On behalf of Austral Gold Limited:

"Stabro Kasaneva"

CEO

For Further Information Please Contact:

Alison Crealy

[email protected]

+61 (2) 9380 7233

Mike Brown

[email protected]

+1 604 568 2496

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 the Company's expectation that the project will play a significant part in its growth plans, its expectation the

commissioning of its new processing is imminent, its expectation that the complete pre-feasibility study the combined production

at Amancaya and Guanaco is expected shortly, as well as its expectation of what that study will reveal. 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, 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.

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