AuStar Gold Limited (ASX: AUL) (Austar Gold or the Company) is pleased to announce the lodgment of its Prospectus with ASIC for the Capital Raising announced by the Company on 5 December 2019.

The Prospectus includes a pro-rata, non-renounceable entitlement offer to Eligible Shareholders (Entitlement Offer) of 1 New Share in the Company for every 2 Shares (New Share) held by Eligible Shareholders on the Record Date (7.00pm AEDT on 17 December 2019), at the Offer Price of $0.30 per New Share together with 1 New Option for every 3 New Shares exercisable at $0.60 and expiring 30 June 2022 (New Option), to raise up to approximately $5,085,545 (before costs).

The Entitlement Offer is non-renounceable. Eligible Shareholders (being Shareholders on the Record Date with a registered address in Australia and New Zealand) are also invited to apply for additional New Shares and additional New Options in excess of their entitlement if there is a shortfall between applications received from Eligible Shareholders and the number of New Shares and New Options proposed to be issued under the Entitlement Offer.

The Entitlement Offer is partially underwritten to the amount of $1,000,000 by Claymore Capital Pty Ltd (Underwriter) pursuant to an underwriting agreement, the terms of which are summarised in the Prospectus.

The opening date for the Entitlement Offer is 18 December 2019 and the Entitlement Offer's closing date is 5pm (AEDT) 9 January 2020.

The Directors have reserved the right to place any shortfall of any entitlement not taken up under the Entitlement Offer or by the Underwriter at their discretion within 3 months of the closing date of the Offer under a Shortfall Offer also included in the Prospectus.

The Prospectus also provides an offer to certain sophisticated, institutional and/or professional Investors to apply for up to $2,500,000 worth of New Shares at the Offer Price per Placement Share plus one free attaching New Option for every three Placement Shares applied for (Placement Offer) and an offer to Avior Consulting and Gandel Metals to apply for up to a combined amount of $900,000 worth of New Shares at the Offer Price per Subscription Share plus one free attaching New Option for every three Subscription Shares applied for (Subscription Offer).

The funds raised from the Offers under the Prospectus will be used to contribute $2.4 million to the completion of the Deed Of Company Administration (DOCA) as part of the consideration for the acquisition of Centennial, capital development at the A1 mine, capital improvements at both the Maldon and Morning Star processing plants, in-mine resource drilling, regional exploration, working capital and transaction costs, and potential further growth initiatives.

On completion of the Placement Offer, the Entitlement Offer (subject to completion of the Underwriting) and the Subscription Offer, AuStar will have raised a minimum of $4.4 million, satisfying one of the remaining conditions precedent to the acquisition of Centennial under the DOCA.

The issue of shares under the Placement Offer and the Subscription Offer, the issue of Underwriter Options under the Underwriting Agreement and the issue of Additional Consideration Shares to the Centennial Vendors are subject to Shareholder Approvals at a General Meeting of the Company which is expected to be held in mid-January 2020. The Shareholder Approvals, (other than the approval to issue the Underwriter Options), will be interdependent, with the result that each of the resolutions must be passed in order for completion of each of the issues to occur. If Shareholder Approvals are not obtained, the Company's acquisition of Centennial may not proceed. Please refer to the Prospectus for further details regarding the requirements of the DOCA, the Company's acquisition of Centennial and the Shareholder Approvals.

Further information on the Entitlement Offer and the other Offers is set out in the Prospectus, which will be mailed to Eligible Shareholders with a personalised Entitlement and Acceptance Form shortly after the Record Date. Shareholders may view all the Company's ASX announcements, including those relating to the Offer, on the Company's website: www.austargold.com.au.

The Board recommends that Eligible Shareholders and prospective Investors should read the Prospectus in its entirety before deciding whether to participate in the Offers. There are a number of risks factors that should be considered in relation to making a decision on whether to participate in any of the Offers, which are summarised in the Prospectus.

Contact:

Mr. Frank Terranova

Tel: + 61 3 5777 8268

Email: info@austargold.com

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