Sydney, Australia--(Newsfile Corp. - December 21, 2020) - Austral Gold Limited (ASX: AGD) (TSXV: AGLD) (the "Company" or "Austral") has decided to outsource its underground mine operation at its 100% owned Amancaya mine and certain maintenance activities at its Guanaco processing plant, effective January 2021. Austral is in final negotiations with contractors that will bring new technologies and skills that the Company expects will increase the efficiency and stability of its operations.
The outsourcing decision was based on the Company's focus to increase its mineral reserve inventory in Argentina and Chile, and the challenges of operating at deeper underground levels. Amancaya is a high-grade satellite mine located about 60km from the Guanaco mining complex.
As a result of the restructuring, Austral plans to take an after-tax charge of US$3 million. It is expected that the transition to the mining contractor at Amancaya will impact production in January 2021 with operations resuming in February. Austral will continue to provide mine planning and grade control at the operation.
2020/2021 Guidance
Production at the Guanaco/Amancaya mines was 52,487 gold-equivalent ounces for the 11-months period ended November 30, 2020 (49,718 gold ounces and 244,961 silver ounces); and the Company remains on track to achieve its guidance of about 55,000 gold equivalent ounces provided for calendar year 2020.
Production guidance for 2021 is estimated in the range of 50,000-55,000 gold equivalent ounces. Further details of the projected cash cost (C1) and all-in-sustaining cost (AISC) will be included in the December 2020 quarterly report and is expected to remain in the lower quartile of industry costs.
Chief Executive Officer, Stabro Kasaneva commented: "We expect the outsourcing of our mining operations at Amancaya will lead to production efficiencies as we increase our focus on exploration in Chile and Argentina with the goal of building a growing sustainable future."