Austral Gold Extends Amancaya High Grade to Depth

Newsfile Corp.
·21 min read

Highlights from reported assays:

  • DAM-002 1.35 meters @14.65 g/t gold and 50.60 g/t silver including 42.43 g/t gold and 124 g/t silver over 0.44 meters

  • DAM-003 2.07 meters @12.13 g/t gold and 57.50 g/t silver including 21.01 g/t gold and 142.8 g/t silver over 0.88 meters

  • DAM-008 2.53 meters @12.18 g/t gold and 8.50 g/t silver in the Central Vein and 30m at 4.04 g/t gold and 7.50 g/t silver including 4.14 meters @23.50 g/t gold and 29.30 g/t silver in a newly discovered mineralized breccia zone at depth

  • DAM-012 0.40 meters @41.89 g/t gold and 7.50 g/t silver

Sydney, Australia--(Newsfile Corp. - January 26, 2021) - Austral Gold Limited (ASX: AGD) (TSXV: AGLD) (the "Company" or "Austral") is pleased to announce that it has received assay results for the first fifteen drill holes reflecting 4,806m at its Amancaya mine.

Extending the known veins to depth
The drilling program started in the fourth quarter of 2020 in order to extend resources and reserves at the Amancaya mine at depth. Previous exploration was not successful in intercepting the veins at depth when drilling was performed from east to west. Austral mapped out the contact between two breccia zones at the location of the veins and observed a steepening of this contact zone. Consequently, drilling was undertaken from west to east, and intersected the vein with similar widths and tenor that is currently being mined 50m to 100m under previous intersections. See attached longitudinal sections.

New Discovery - New Mineralized Breccia Zone
In addition, drill hole DAM-008 successfully extended the eastern edge of the Amancaya diatreme as a major mineralization control, intercepting 30m @ 4.04 gpt Au which contains high-grade veins and hydrothermal injection breccias. This zone also included a high-grade intersection on the hanging wall of 4.1m of 23.5 g/t Au and 29 g/t Ag.

Chief Executive Officer, Stabro Kasaneva commented: "I am delighted with the success of the exploration team - they discovered a new wide zone of hydrothermal breccia that could transform the production profile at the Amancaya mine and are on the right track to extend the mine life of this low cost operation."

Table 1: Drill Intersections

Hole

Sector

Section

Intercept

From (m)

To (m)

Length (m)

Au gpt

Ag

Significant intercepts reported at 1 gpt Au cutoff; include at 3 gpt Au cutoff, sub-include at 10 gpt Au cutoff
True widths are 30-50% of drilled widths

DAM-002

Veta Sur

150 SE


70.21

71.56

1.35

14.65

50.7

Include

71.12

71.56

0.44

42.43

124.0

DAM-003

Veta Sur

200 SE


307.89

309.96

2.07

12.13

57.5

Include

308.38

309.26

0.88

21.01

142.8

DAM-004

Veta Norte

175 NE


348.80

349.96

1.16

4.02

3.0

DAM-005

Veta Norte

325 NE

No significant intercepts


DAM-006

Veta Central

0


313.37

314.42

1.05

4.18

3.5

DAM-007

Veta Central

100 NE


311.38

312.68

1.30

6.97

6.0

DAM-008

Veta Central

100 SW


266.08

268.61

2.53

12.18

8.5


New Zone

100 SW


308.85

312.99

4.14

23.50

29.3




Include

309.24

310.14

0.90

17.24

50.59




Include

311.29

312.99

1.70

44.46

25.25




sub-include

312.47

312.99

0.52

89.70

44.30





314.98

316.93

1.95

3.55

4.6




Include

315.32

315.66

0.34

10.81

16.20





319.37

321.60

2.23

3.77

11.1





332.81

334.06

1.25

2.90

5.8





334.60

337.57

2.97

3.04

6.7

DAM-009

Veta Sur

50 NW

No significant intercepts


DAM-010

Veta Sur

175 NW


98.78

99.13

0.35

4.88

0.6

DAM-011

Veta Sur

250 SE


119.27

119.92

0.65

2.78

0.5

DAM-012

Veta Sur

200 SE


104.21

104.61

0.40

41.89

7.5

DAM-013A

Veta Sur

175 SE


66.05

66.36

0.31

19.25

0.3

DAM-014

Veta Sur

126 SE

No significant intercepts


DAM-015

Veta Sur

250 SE


192.56

194.65

2.09

6.56

13.3

Include

192.56

193.18

0.62

12.36

12.5

AMANCAYA MINE Plan View Map

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AMANCAYA MINE DAM-008 Section – New Mineralized Breccia Zone

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AMANCAYA MINE North, Central & Sur Veins – Au Longitudinal Sections – Image 1

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AMANCAYA MINE North, Central & Sur Veins – Au Longitudinal Sections – Image 2

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Quality Assurance

Industry standard practices were used for sampling of diamond drilling. Drilling Samples were sent to the Activation Geological Services (AGS) chemical laboratory, located in the city of Coquimbo, Chile, where the samples were mechanically prepared (crushed and pulverized according to standard protocol). Chemical gold analyzes were performed using Au50 FA-AAS procedures (50 gram weight used for assays). Fusion with final determination performed by Atomic Absorption; The results obtained equal to or greater than 5gr / ton., were analyzed by Au30GRAV, fusion with final gravimetric determination. For the base metal assays, acid digestion was performed with final determination by ICPMS (Ultra-trace multi-element package). AGS has NCh 17025-2005 accreditation for the aforementioned tests and its central laboratory is located at Avenida La Cantera 2270, Coquimbo, Chile.

Competent Person

The information in this press release that relates to Exploration Results listed in the table above is based on work supervised, or compiled on behalf of, Robert Trzebski, a Director of the Company. Technical Information in this press release has been reviewed by Robert Trzebski, who is a member of the Australian Institute of GeoScientists (MAIG) and qualifies as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Robert Trzebski consents to the inclusion in this presentation of the technical information that he has reviewed and approved.

Robert Trzebski has sufficient experience which is relevant to the style of mineralisation and types of deposits under consideration and to the activity which he has undertaken to qualify as a Competent Person as defined in the JORC Code 2012.

About Amancaya

Amancaya is located approximately 60km south-west of the Guanaco mine. Amancaya is a low sulphidation epithermal gold-silver deposit consisting of eight mining exploration concessions covering 1,755 hectares (and a further 1,390 hectares of second layer mining claims). Underground operations at Amancaya started in 2018 and the ore at Amancaya is trucked to the agitation leaching plant at Guanaco for processing.

About Austral Gold

Austral Gold Limited is a growing gold and silver mining, development and exploration company building a portfolio of quality assets in Chile, the USA and Argentina. Austral owns 100% interest in the Guanaco/Amancaya mine in Chile and the Casposo Mine (care and maintenance) in Argentina, and a 26.46% 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% interest in the Pingüino project in Santa Cruz, Argentina. Austral Gold Limited is listed on the TSX Venture Exchange (TSXV: 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:

Jose Bordogna
Chief Financial Officer
Austral Gold Limited
jose.bordogna@australgold.com
+54 (11) 4323 7558

Ben Jarvis
Director
Austral Gold Limited
info@australgold.com
+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, 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 exploration team discovered a new wide zone of hydrothermal breccia that could transform the production profile at the Amancaya mine and are on the right track to extend the mine life of this low cost operation.

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 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 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.

AMANCAYA MINE EXPLORATION

JORC Code, 2012 Edition - Table 1 Report
Section 1 Sampling Techniques and Data
(Criteria in this section apply to all succeeding sections.)

Criteria

JORC Code Explanation

Commentary

Sampling techniques


Drilling techniques

Drill sample recovery

Logging

Sub- sampling techniques and sample preparation

Quality of assay data and laboratory tests

Verification of sampling and assaying

Location of data points

Data spacing and distribution

Orientation of data in relation to geological structure

Sample security

Audits or reviews

SECTION 2 REPORTING OF EXPLORATION RESULTS
(Criteria listed in the preceding section also apply to this section)

Criteria

JORC Code Explanation

Commentary

Mineral tenement and land tenure status


















Acknowledgement and appraisal of exploration by other parties

The properties are located approximately 220km SSE of Antofagasta, Chile, in Region III. The Amancaya project is comprised of the Amancaya property and the San Guillermo property.
The Amancaya property consists of eight individual exploitation mining concessions covering a total area of 1,755 ha and is 100% owned by Guanaco Compañia Minera.
The San Guillermo properties cover an area of 12,500 ha. The surface rights are controlled by the federal government and access is normally granted as required.

Exploration done by other parties

Geology

The Amancaya project represents a low sulphidation gold-silver epithermal deposit. The critical features that define the mineralisation at Amancaya include lithological and structural control. The mineralisation and alteration are focused along high- angle structures in a dacite-andesite volcanic dome. The structural system provided a pathway for rising hydrothermal fluids. The Central Vein exhibits banded textures, with bands of grey chalcedonic quartz, clear crystalline quartz, amethyst, and dark bands containing sphalerite, silver, and lead sulphosalts. Other textures include coliform texture, sinuous alternating bands of chalcedonic quartz and amethyst, and crustiform quartz. Interstices are filled with clays, limonite, manganese oxide, and carbonates (ankerite).

Drill hole Information

Data aggregation methods

Relationship between mineralisation widths and intercept lengths

Diagrams

Balanced reporting

Other substantive exploration data

Further work

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