Austral Gold Delivers Updated Mineral Reserve and Resource Estimates in Chile
MEDIA RELEASE
Austral Gold Limited
29 March 2022
Austral Gold Delivers Updated Mineral Reserve and Resource
Estimates in Chile
Sydney, Australia (March 29, 2022) Austral Gold Limited (“Austral” or the “Company”) (ASX:
AGD; TSX-V: AGLD) is pleased to announce the positive results of updated Mineral Reserve
and Mineral Resource Estimates prepared by SLR Consulting (Canada) Ltd. (“SLR”) in
accordance with CIM Definitions 2014, National Instrument 43-101 (“NI 43-101”) and Joint Ore
Reserves Committee Code, 2012 (JORC 2012) for the Company’s 100% owned Guanaco-
Amancaya Operation in Chile. The Guanaco-Amancaya Operation consists of the Guanaco
Mine (Guanaco) and Inesperada satellite deposit (Inesperada), the Amancaya Mine
(Amancaya), and the Guanaco heap leach pads (Heap Reprocessing project). The updated
Mineral Reserve and Mineral Resourc e estimates will be supported by a technical report
prepared in accordance with NI 43-101 that will be filed on SEDAR (www.sedar.com) within 45
days of this news release (the “Technical Report”).
Highlights:
• Proven and Probable Mineral Reserves for the Guanaco-Amancaya Operation are estimated
to be 12.1 Mt grading 0.84 g/t Au and 4.89 g/t Ag and containing 0.326 million ounces (Moz)
Au and 1.91 M oz Ag. The Heap Reprocessing material provides the majority of the increase
from previous estimates.
• Measured and Indicated Mineral Resources for the Guanaco -Amancaya Operation are
estimated to be 14.9 million tonnes (Mt) grading 1.03 g/t Au and 5.89 g/t Ag
• Inferred Mineral Resources are estimated to be approximately 2.4 Mt grading 1.18 g/t Au
and 3.93 g/t Ag
• After-Tax Net Present Value (NPV) at 6.89% discount rate is US$77.0 million
• Undiscounted pre-tax free cash flows of US$132.7 million (post tax US$102.6 million)
• All-in Sustaining Cost (AISC): US$1,050/oz Au
• The mine life is 12 years, based on Mineral Reserves.
• Combined estimated annual average production of 17, 400 ounces recovered for gold and
52,800 ounces recovered for silver
• Mine life capital totals US$20.9 million, consisting of installation of a new crusher and heap
leach pad for heap reprocessing, capitalized waste stripping, and closure costs (offset by
salvage value).
• Average operating cost over the mine life is $17.51 per tonne milled.
• Metallurgical recovery averages 60.4% for gold and 31.7% for silver over the LOM (the
average is highly influenced by the Heap Reprocessing material, higher-grade feed has higher
recoveries).
• Metal prices: Life of Mine (“LOM”) average of US$1, 686/oz gold a nd US$22.88/oz silver ,
based on consensus of independent forecasts for annual prices.
*See tables below for assumptions used in the estimates.
Chief Executive Officer of Austral, Stabro Kasaneva commented, “We are excited at the prospect
of continuing to increase shareholder value by extending the mine life of Guanaco-Amancaya. The
Heap Reprocessing project is expected to utilize excess processing capacity to provide a solid
long-term basis for mine operation s, covering costs and providing a return at current financial
inputs. Opportunities for higher-grade ore sources from exploration or acquisition could be easily
integrated into the Life of Mine plan, and would benefit from lower unit costs.”
The updated estimates are based on Company infill drilling and exploration activities since the
December 31, 2016 Technical Report filed on SEDAR , as well as metallurgical testwork and
engineering studies on the Heap Reprocessing project.
Mining at Guanaco was discontinued in February 2020. Amancaya is currently in production, while
Guanaco Heap Reprocessing and Inesperada are new projects that are anticipated to commence
operations in 2023. Amancaya's Mineral Reserves are expected to be exhausted in 2023 when
Inesperada commences production. It is anticipated that the Inesperada open pit Mineral
Reserves will be exhausted by the end of 2025. Reprocessing of the heaps is schedul ed to
commence in 2023 and continue through to the end of mine life in 2033. Heaps I, II, and III are
expected to be reprocessed in reverse order of their numbering, beginning with Heap III, continuing
with Heap II, and finishing with Heap I. Approximately 15% of the Mineral Reserve contained
ounces comes from Amancaya, 68% from Heaps Reprocessing, and 17% from Inesperada.
Summary of Mineral Resources – December 31, 2021
Austral Gold Limited– Guanaco-Amancaya Operation
Classification Tonnes
(000 t)
Grade Contained Metal
(g/t Au) (g/t Ag) (000 oz Au) (000 oz Ag)
Guanaco
Underground
Measured 581 2.61 12.67 48.7 236.6
Indicated 868 2.31 17.67 64.5 492.9
M + I 1,448 2.43 15.67 113.3 729.5
Inferred 250 3.42 6.26 27.6 50.4
Amancaya
Underground
Measured 49 7.96 16.60 12.6 26.4
Indicated 249 6.32 15.96 50.6 127.9
M+I 299 6.59 16.06 63.3 154.3
Inferred 61 5.05 11.02 9.9 21.5
Classification Tonnes
(000 t)
Grade Contained Metal
(g/t Au) (g/t Ag) (000 oz Au) (000 oz Ag)
Classification Tonnes Grade Contained Metal
(000 t) (g/t Au) (g/t Ag) (000 oz Au) (000 oz Ag)
Amancaya Julia and Cerro Amarillo Projects
Underground
Measured - - - - -
Indicated 72 5.36 9.50 12.4 21.9
M+I 72 5.36 9.50 12.4 21.9
Inferred 91 5.80 13.04 16.9 38.0
Inesperada
Open Pit
Measured - - - - -
Indicated 1,682 1.05 14.38 56.7 778.0
M+I 1,682 1.05 14.38 56.7 778.0
Inferred 74 0.91 12.40 2.2 29.5
Heap Leach Pads
Measured 11,417 0.67 3.10 247.5 1,139.1
Indicated - - - - -
M+I 11,417 0.67 3.10 247.5 1,139.1
Inferred 1,907 0.55 2.64 33.6 161.8
Total Measured 12,047 0.80 3.62 308.9 1,402.1
Total Indicated 2,871 2.00 15.39 184.2 1,420.7
Total M+I 14,918 1.03 5.89 493.0 2,822.8
Total Inferred 2,383 1.18 3.93 90.1 301.3
Notes:
1. Mineral Resources followed CIM (2014) definitions and are compliant with the JORC Code.
2. Mineral Resources are reported on a 100% ownership basis.
3. Mineral Resources are inclusive of Mineral Reserves.
4. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
5. Mineral Resources are estimated at the following cut-off grades:
• Amancaya and Guanaco underground Mineral Resources: 2.90 g/t AuEq and 1.50 g/t AuEq, respectively.
• Inesperada open pit Mineral Resources: 0.38 g/t Au.
• Heap Leach Pads Mineral Resources: zero cut-off grade – the entire volume is included.
6. Mineral Resources at Guanaco and Amancaya are estimated using a long-term gold price of US$1,750/oz and a silver
price of US$22/oz. Mineral Resources at Inesperada and Heap Leach Pads are estimated using a long-term gold price of
US$1,750/oz.
7. Gold equivalency (AuEq) was calculated as follows:
• Guanaco: AuEq = Au + 0.0106 x Ag based on a gold and silver price of $1,750/oz and $22/oz respectively and
recoveries of gold and silver of 95% and 80%, respectively.
• Amancaya: AuEq = Au + 0.0107 x Ag based on a gold and silver price of $1,750/oz and $22/oz respectively and
recoveries of gold and silver of 93% and 79%, respectively.
8. Metallurgical recoveries are 93% for gold and 79% for silver for Amancaya, 95% for gold and 80% for silver for Guanaco,
80% for gold for Inesperada, and 54%, 70%, and 46% for gold for Heaps I, II, and II, respectively.
9. A minimum mining width of 1.5 m is used for resource underground shapes for the Amancaya and Guanaco mines.
10. Bulk densities are 2.5 t/m3 for Amancaya and Guanaco, 2.44 t/m3 for Inesperada, and 1.77 t/m3 for Heap I, 1.50 t/m3
for Heap II, and 1.70 t/m3 for Heap III, respectively.
11. Numbers may not add due to rounding.
Guanaco-Amancaya Operation Mineral Reserves – December 31, 2021
Austral Gold Limited– Guanaco-Amancaya Operation
Category Tonnes
(000 t)
Grades Contained Metal
(g/t Au) (g/t Ag) (000 oz Au) (000 oz Ag)
Underground (Amancaya)
Proven 47 5.74 11.51 9 17
Probable 251 5.01 12.95 40 105
Subtotal Underground 298 5.13 12.72 49 122
Open Pit (Inesperada)
Proven - - - - -
Probable 1,607 1.05 14.39 54 744
Subtotal Open Pit 1,607 1.05 14.39 54 744
Guanaco Heap Leach Pads
Proven 10,240 0.68 3.17 223 1,043
Probable - - - - -
Subtotal Heap Leach Pads 10,240 0.68 3.17 223 1,043
Total
Proven Total 10,287 0.70 3.21 232 1,060
Probable Total 1,859 1.58 14.2 95 848
Total Proven + Probable 12,146 0.84 4.89 326 1,909
Notes:
1. Mineral Reserves follow CIM (2014) definitions and are compliant with the JORC Code.
2. Mineral Reserves are reported on a 100% ownership basis and estimated at the following cut-off grades:
• Amancaya: break-even cut-off grade of 3.04 g/t AuEq, and marginal cut-off grades of 2.37 g/t AuEq and 1.37 g/t
AuEq for SLS stopes and drifts respectively.
• Inesperada - pit discard cut-off grade of 0.40 g/t Au.
• Heap Leach Pads - Marginal cut-off grades for Heap Reprocessing have been estimated as 0.20 g/t Au and 0.15 g/t
Au for Heaps I and Heap II respectively, and at zero cut-off for Heaps III.
3. Mineral Reserves are estimated using an average long term gold price of US$1,700/oz and silver price of US$22/oz.
4. Amancaya AuEq was calculated as AuEq = Au + 0.0110 x Ag, based on prices of US$1,700/oz Au and US$22/oz Ag and
recoveries of Au and Ag of 93% and 79%, respectively.
5. The following parameters were used for the Amancaya Mineral Reserve estimate:
• A minimum mining width of 1.5 m was used for SLS 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).
6. Metallurgical recovery is 93% for gold and 79% for silver.
7. Bulk density is 2.5 t/m3.
8. The following parameters were used for the Inesperada Mineral Reserve estimate:
• Dilution and mining recovery factors of 0% and 100% respectively were applied.
• Metallurgical recovery is 80% for gold.
• Bulk density is 2.44 t/m3.
9. The following parameters were used for the Mineral Reserve estimate for the Guanaco Heaps:
• Heap Leach Pad I: maximum of 5% dilution. The average dilution over the LOM is 3.5%. Dilution grades are 0.18
g/t Au and 1.50 g/t Ag.
• Heap Leach Pad II: maximum of 5% dilution. The average dilution over the LOM is 2.5%. Dilution grades are 0.13
g/t Au and 1.40 g/t Ag.
• Heap Leach Pad III: All internal dilution within the heap limits was included.
10. Metallurgical recoveries for Heaps I, II, and II are 54%, 70%, and 46% for gold respectively.
11. Bulk density is 1.77 t/m3 for Heap I, 1.50 t/m3 for Heap II, and 1.70 t/m3 for Heap III.
12. 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 mineral resources or mineral reserves.
TECHNICAL CONTENT AND QUALIFIED PERSONS
The Technical Report for the Guanaco-Amancaya Operation referenced in this news release was
prepared under the supervision of the following persons, each an Independent “Qualified Person”
as defined by NI 43-101:
• Orlando Rojas, MAIG, SLR Associate Principal Geologist,
• Rodrigo Barra, MAIG, SLR Associate Principal Geologist,
• Stephan R. Blaho, MBA, P.Eng., SLR Principal Mining Engineer,
• Varun Bhundhoo, ing., SLR Project Mining Engineer,
• Andrew P. Hampton, M.Sc., P.Eng., SLR Principal Metallurgist, and
• Luis Vasquez, M.Sc., P.Eng, SLR Senior Environmental Consultant and Hydrotechnical
Engineer
The technical content of this news release has also been reviewed and approved by the above
Qualified Persons.
The Technical Report to support the updated Mineral Reserve and Mineral Resource estimates for
the Guanaco-Amancaya Operation, prepared in accordance with NI 43-101, will be filed on SEDAR
(www.sedar.com) within 45 days of this news release.
About Austral Gold
Austral Gold Limited is a growing gold and silver mining, development and exploration company
whose strategy is to expand the life of its cash generating assets in Chile, restart its Casposo mine
in Argentina and build a portfolio of quality assets in Chile, the USA and Argentina organically
through a Tier 1 or 2 exploration strategy and via acquisitions and strategic partnerships. 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 2021 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 Limited is listed on the TSX Venture Exchange (TSX -V: 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:
David Hwang Ben Jarvis
Company Secretary Director
Austral Gold Limited Austral Gold Limited
[email protected] [email protected]
+61 (2) 9698 5414 +61 413 150 448
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, expectation s 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 intention to file the Technical Report within
45 days of the news release; the expectation of increased shareholder value from the extension
of mine life; the expectation that the Heap Reprocessing project is expected to utilize excess
processing capacity for stated benefits; and that stated opportunities can be integrated into the
Life of Mine plan that would benefit from lower unit costs.
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 especially in light of the effects of the novel coronavirus, 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 proper ty 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 the ASX and 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.
Austral Gold Limited| Guanaco-Amancaya Operation, SLR Project No.: 233 03497 R0000
JORC Code Table 1 – March 25, 2022 1
JORC CODE (2012) TABLE 1
The following table provides a summary of important assessment and reporting criteria used at the Guanaco-Amancaya Operation for the reporting of Mineral
Resources in accordance with the Table 1 checklist in The Australasian Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves
(The JORC Code, 2012 Edition). Criteria in each section apply to all preceding and succeeding sections.
Reference is made to Competent Persons from SLR Consulting (Canada) Ltd. (SLR), namely:
• Orlando Rojas, MAIG (responsible for Sections 1.3.1, 1.3.2, 1.3.3, 1.3.4, 1.3.5, 4, 5, 6, 7, 8, 9, 10, 11, 12, 23 and contributions to Sections 2 and 27).
• Rodrigo Barra, MAIG (responsible for Sections 1.1.1.1, 1.1.2.1, 1.3.6, 14 (with the exception of Sections 14.5.10 and 14.5.14 (Heap III resources)), 25.1,
26.1, and contributions to Sections 2 and 27).
• Stephan R. Blaho, MBA , P.Eng. (responsible for Sections 1.2, 1.3.7.1, 1.3.7.2, 1.3.8.1, 1.3.8.2, 1.3.13, 14.5.10 and 14.5.14 (Heap III resources), 15.1,
15.2, 15.4, 16.1, 16.2, 16.4, 19, 21, 22, and 24 and contributions to Sections 1.1.1.2, 1.1.1.4, 1.1.2.2, 2, 3, 25.2, 25.4, 26.2, and 27 of the Technical
Report).
• Varun Bhundhoo, ing. (responsible for Sections 1.1.1.4, 1.3.7.3, 1.3.8.3, 1.3.10, 15.3, 15.5, 15.6, 16.3, 18 (except 18.6) and contributions to Sections
1.1.1.2, 1.1.1.4, 1.1.2.2, 2, 25.2, 25.4, 26.2, and 27 of the Technical Report).
• Andrew P. Hampton, M.Sc., P.Eng. (responsible for Sections 1.1.1.3, 1.1.2.3, 1.3.9, 13, 17, 25.3, 26.3, and contributions to Sections 2 and 27 of the
Technical Report).
• Luis Vasquez, M.Sc., P.Eng. (responsible for Sections 1.1.1.5, 1.1.2.4, 1.3.12, 18.6, 20, 25.5, 26.4, and contributions to Sections 2 and 27 of the Technical
Report)
The Competent Persons (CP) prepared a NI 43-101 Technical Report (CPR) on the property, dated March 25, 2022.
Austral Gold Limited| Guanaco-Amancaya Operation, SLR Project No.: 233 03497 R0000
JORC Code Table 1 – March 25, 2022 2
Section 1 – Sampling Techniques and Data
Criteria Commentary
Sampling Techniques
Guanaco
• From project inception, staff employed by the respective project owners were responsible for sample collection, core splittin g, density
determinations, sample storage, and sample security.
• Every underground face advance (3.5 m average) is channel-sampled. The channel-sample length ranges from 0.4 m to 1.0 m in mineralized
portions. No fixed lengths have been established for samples in barren zones. The intervals between marks are sampled by chipping the
walls with a chisel and a hammer on a 20 cm to 30 cm width. The sample weight is 5 kg to 8 kg on average.
• Previous owners (1980 to 2000) collected reverse circulation (RC) samples at 1 m, 1.5 m, and 2.0 m intervals.
• Guanaco Compañía Minera SpA (GCM) RC samples were collected every 1.5 m in 2004, and every one metre or two metres in the 2006 –
2021 drilling campaigns. A riffle splitter was installed just below the cyclone to divide the whole sample. The sample was split and collected
in two metallic trays. One portion was selected for analysis and the second was retained for back up. A small portion of the sample was
collected by a spoon and placed in a chip sample tray for geological logging. Samples were weighed and bagged into pre -labelled plastic
bags. The average estimated sample weights were 52 kg and 26 kg for 2 m and 1 m samples , respectively.
• GCM diamond-drill sampling from the 2015-2021 campaigns consisted of splitting the core in half using a manual splitter, and following a
line marked by the logging geologists.
Amancaya
• Recent Amancaya sampling was completed in three main phases:
1. Yamana Gold Inc. (Yamana) trenching and RC drilling – 2004 to 2008
2. Grupo Minero Las Cenizas S.A. (Cenizas) resampling of trenches and drilling – 2009.
3. Austral Gold Limited (Austral Gold) diamond drilling – 2015 and 2021.
• Yamana trench samples were collected by channel sampling of freshly exposed bedrock in surface trenches. The channel samples were a
standard one metre in length, however, they were occasionally shorter depending on geological boundaries. Standards, blanks, and
duplicate chip samples were inserted into the sample stream.
• For Yamana and Cenizas RC drilling, two chip samples were collected using a cyclone, one to be sent for analysis and one to be saved as a
reject sample. Sample intervals were generally two metres, but occasionally one metre, and the size of collected sample rang ed from eight
kilograms to ten kilograms. A sample number was assigned to each sampled interval. Quality Assurance (QA) and Quality Control (QC)
samples were inserted into the sampling stream for each vein intersection. Sample intervals were determined by both litholog y and a visual
estimate of quartz veining and quartz stockworks/breccia. Sampling of mineralized zones was generally on one metre intervals , however,
mineralized contacts were also considered.