Austral Gold Reports New High Grade Gold Vein Discovery in Trenching at Amancaya Project Including 2.5 Metres @ 9.70 g/t Gold

Vancouver, British Columbia--(Newsfile Corp. - August 21, 2017) - Austral Gold Limited (ASX: AGD) (TSXV: AGLD) (the "Company" or "Austral") is pleased to announce that it has received the first batch of geochemical results from the maiden regional trenching program on its 100% owned Amancaya property, where the Company commenced open pit mining operations earlier this year.Results have indicated the presence of high grade gold hosted by quartz veining along a 2.8 km long structure (the "Nueva Vein"), identified from previous float sampling and geophysics.

Highlights:

"The discovery of high grade gold mineralisation along the Nueva Vein is very exciting.The high grade results obtained in the first batch of assays received indicate that the vein field at Amancaya potentially hosts more deposits similar to the high grade Central Vein, which we began mining earlier this year. The proximity of these veins to the existing operation and the fact that the veins sub outcrop or are under shallow cover is very encouraging for future development potential," said Stabro Kasaneva, CEO of Austral Gold. "We expect to start planning exploration drilling to follow up these promising results upon receipt of all assays."

Highlights from the assays received (44 trenches) are shown in the following table:

Trenches not included in the above table returned insignificant results, based on grade and/or width of intersect, or did not reach mineralization due to post-mineral cover and/or presence of salt crust (caliche).Widths are very close to true widths, given veins are sub vertical and trenches were cut perpendicular to the structures. Grades are weighted averages over the respective total sampled interval.

Trenching was undertaken to test potential structures identified through float sampling of quartz and geophysical surveys undertaken by the Company during the previous year.Assays from 44 out of a total of 136 trenches have been received to date and those with notable results are reported in this release.

The Nueva Vein was identified from quartz float sampling (see Company news release on October 6, 2016) and subsequent geophysical surveys.The results indicate that mineralisation is hosted by quartz veining, veinlets, breccias and stockwork, which appears to have structural continuity for at least 2.8 km from trenches excavated.The vein is sub-vertical in sub outcrop and has a northerly strike. Nueva Sur is approximately one km to the NW of the reserve and resource on the Central Vein (see Company news release dated June 8, 2017) and is believed to be the northerly extension of the Julia vein.

Trenching to the north of the Julia vein, which was drilled by Austral Gold in 2016 (see Company news release January 25, 2017) shows that mineralisation on this vein remains open to the north. The Julia vein was not included in the Amancaya reserve and resource estimate (see Guanaco and Amancaya Project Technical Report, 31 December 2016 on the Company's SEDAR profile.)

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Quality Assurance

Trenches were excavated by an excavator until bedrock was reached. Where caliche was encountered (in a majority of the trenches) and could not be broken through the surface was soaked overnight in water then broken through. Following hand cleaning the trenches were mapped then sampled using a portable diamond cutting machine to collect a continuous channel sample over the interval to be sampled.

During the sampling processes, as per Company QA/QC protocols, blanks and standards were submitted into the sample stream at regular intervals. Duplicate samples were also taken. Samples were labelled and bagged and sent to the Actlabs laboratory in Coquimbo, Chile, where they were crushed and prepared. Gold assays were done using 1A2-30 code FA-AAS procedure on a 30g sample. Base metal assaying was done by multi-element 5AAS-07 AR-AAS 2g/100ml ICP-MS analysis. Samples over limit in silver, lead, zinc, and/or copper are reanalysed by a high detection limit ICP-ES analysis (7AR procedure). Activation Laboratories Ltd.is an ISO 17025 certified full-service commercial laboratory, with its head office located in Ancaster, Ontario, Canada.

Qualified Persons

The scientific and technical content of this news release has been prepared by, or under the supervision of Michael Brown, MAIG, and has been reviewed and approved by him. Mr Brown is a Geologist and Member of Australian Institute of GeoScientists and an employee of Austral Gold Limited. Mr. Brown is a "qualified person" for the purposes of National Instrument 43-101, Standards of Disclosure for Mineral Projects.

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. Austral commenced open-pit mining operations at Amancaya in 2017. The Company also owns 70% and is operator of the underground silver-gold Casposo mine in San Juan, Argentina. 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 (TSXV: 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:

Mike Brown, VP Corporate Development
Mike.brown@australgold.com
Canada: +1 604 568 2496
Argentina: + 54 11 4323 7558

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; that the Amacaya property potentially hosts more deposits similar to the high grade Central Vein, the belief that the veins sub outcrop or are under shallow cover is very encouraging for future development potential and the Company's expectation to start planning exploration drilling .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.