AuStar Gold Limited (ASX: AUL) is pleased to provide the following update on its activities for the quarter ended 31 December 2019.

Highlights

Gold sales revenue of A$1.813 million (inclusive of a small silver credit of $2,700) achieved at an average gold price of A$2,173 per ounce, an increase of 26% quarter on quarter (QOQ). The gold price for the quarter was modestly higher than the $2,146/Oz realised in the previous quarter; Quarterly gold production was 835.8 Oz Au (+ 24% QOQ) Oz fine Gold and 107.89 Oz silver (+ 7% QOQ); Minor milling interruptions occurred in November due to mechanical failures and site ceased activities 20th December for a two week Christmas break; Realised grade from the McNally's and Stones reefs continued to perform to forecast expectations over the quarter with drilling operations planned in Q1 2020 to identify additional mining inventory. Though highly variable, feed grade averaged in excess of 15 g/t for the Quarter; Improved gold production has continued into January with milling operations now achieving close to nameplate productivity with minimal operational downtime; There were nil lost time incidents, OHS or material environmental events for the quarter with AuStar Gold maintaining a high standard of Environmental, Safety and Community (ESC) outcomes; The Company completed a consolidation of its securities in December; The Company undertook substantial corporate activity in the quarter in connection with the acquisition of the Centennial and Maldon assets that were subject to a Deed of Company Arrangement (DOCA). Deed of Company Arrangement (DOCA) proposed by Avior Consulting Limited over Centennial Mining Limited, however sSubsequent to the quarter the Company announced the changed circumstances in relation to the DOCA and that it would not be proceeding with the acquisition.

Subsequent to the quarter mining and processing operations have continued strongly with the Company's focus now turning to in-mine and regional exploration.

Mining: Mining at the Morning Star Gold Mine continued during the Quarter with the 7 Level McNally reef and the 8 sub Level Stone reef contributing equally to the overall production. For the Quarter, the Morning Star mine delivered 2,737 tonnes of ore feed to the mill. Waste development metres were zero and waste hoisted from underground was only 28 tonnes, with the Company continuing to minimise waste development.

Mining on the 7 Level McNally reef continued with the development of down-dip scraper slots along a south easterly strike. This process creates multiple scraper slots to assist in maintaining production while up dip scraping is occurring and permitted continued following of the McNally reef down-dip with a limited loss of productivity. Ongoing mining modifications continued to be practiced in both stoping areas including split-firing of faces to maximise ore delivery grades. Waste generated from split-firing was stored into stope voids rather than hoisted. This mining approach is expected to continue as McNally reef is further developed.

The Company is also considering options to partially mechanise haulage and production off of rail as part of the future mining strategy at McNally. Mining continued in Stones via the access and ore-pass rises from 9 Level to the 8 Sub Level which were completed in the September quarter. A secondary access scraper drive developed within the reef continued along strike which confirmed future mining extensions. Available production from Stones is expected to be concluded in the current quarter.

Plant and equipment reliability continued to remain within expectations during the quarter as a consequence of the enhanced preventative maintenance program initiated and the continued replacement of older components within the mining fleet. The reliance on older style pneumatically operated mining equipment has still resulted in some minor unanticipated maintenance issues which are currently being addressed.

Contact:

Mr. Bill Frazer

Tel: + 61 3 5777 8268

Email: Bill.Frazer@austargold.com

Disclaimer Contains Forward Looking Statements

This presentation includes statements deemed to be 'forward-looking'. Although the Company believes the expectations expressed in such statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ. The Company, its directors, officers, agents, employees or advisors, do not represent, warrant or guarantee that the information in this presentation is complete or accurate.

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