Ausgold : Excellent Gold Recoveries from Metallurgical Testwork at KGP

ASX Release

31 March 2022

Excellent Gold Recoveries from Metallurgical Testwork at Katanning Gold Project

Highlights:

•  Excellent results from first phase metallurgical test work for the 1.8 Moz Katanning Gold Project (KGP)

•  The test work demonstrates the KGP ore is free milling and amenable to a conventional CIL processing flowsheet

•  New test work highlights exceptional gold recoveries:

  • - Recoveries of coarse gravity gold between 40 - 69%

  • - Preliminary leach extractions demonstrate average total gold recoveries of between 88 - 94% for the

    Central Zone ores at a 75 µm grind and 24 hour leach time. Higher total gold recoveries of 91 - 96% achieved at finer grinds and longer leach times are to be optimized as part of the current test work program

  • - Low cyanide consumption of 0.5-0.7 kg/t

•  Resource upgrade on track for late April 2022 and Prefeasibility Studies (PFS) targeted for completion late Q2 CY2022

Ausgold Limited (ASX: AUC)(Ausgold or the Company) is pleased to provide an update of exploration and development activities at the Company's 100%-owned Katanning Gold Project (KGP).

Ausgold has now completed its planned 30,000m multi-rig drilling campaign which will add Resource ounces. An additional 2,500m of RC and diamond drilling will continue to further extend areas, including targets within the Jinkas underground and exploration targets within the Rifle Range areas.

Metallurgical Test Work Program

Ausgold has completed a comprehensive metallurgical test work program on five composites from 13 diamond drill holes in the Central and Southern Zones. Initial results have been received from ALS Metallurgy under the supervision of an independent metallurgical consultant, and GR Engineering is progressing pre-engineering works based on the test results.

Leach tests have been completed on five composites (refer Table 1). Three of these composites are from the Central Zone (Jinkas and Jinkas South lodes) and the Southern Zone (Dingo deposit). Recoveries from these samples indicate a consistently high gravity component from all samples with recoveries ranging between 40% up to 69% of total gold recovered. Leach test work indicates between 88-94% recoveries based on a 75 micron grind and 24 hour CIL residence time, with a low residue (tail) grade of 0.15g/t gold across the project. With most of the Central Zone ores, which reflect the majority of the current Resource being in the range of 88-94%. At a 53 micron grind and 48 hour residence, overall average gold recovery increases to 91-96%.

Reagent usage was relatively low with less than 0.7 kg of cyanide (NaCN) consumed per tonne of ore on the Central Zones and less than 1kg/t on Southern Zones. Further studies will consider pre-oxidation to further reduce reagent consumption.

ABN 67 140 164 496

Level 4, 251 St Georges Terrace, Perth WA 6000

1

T: 08 9220 9890 F: 08 9220 9820 E:[e-mail] W: www.ausgoldlimited.com

Further test work is now underway which will support the Prefeasibility Study, including an additional seven composites which will examine the variability along strike and at higher gold grades to confirm these excellent recoveries. This will provide a robust understanding of the overall physical characteristics of crushing and grinding, as well as gold recoveries and processing costs across the project. A low-grade sample is being tested to confirm recoveries at lower grades and inform the cut-off grade determination for the Prefeasibility Study.

Management Comment

Ausgold Managing Director, Matthew Greentree, commented:

"The new metallurgical test work results have exceeded our expectations and now provide a positive foundation for our view that Katanning can support a meaningful high margin gold-producing operation.

These excellent results include a high gravity component reflecting the coarse-grained gold within the deposit and coupled with the free milling ores and high overall gold recoveries, we have a simple, low risk flowsheet that gives us a high level of confidence on project economics as we work to deliver a Prefeasibility Study by mid year."

Work Programs

At present one RC rig is operating at the KGP drilling in both the Central and Southern Zones, with the results of this drilling to support a Resource upgrade early in Q2 CY2022.

•  Resource Drilling - Ausgold has now completed 30,000m of its RC drilling campaign focusing on high-priority targets in the Central and Southern Zones of the KGP, with a further Resource upgrade planned for April 2022.

•  Rifle Range Drilling - RC drilling has been completed along the eastern edge of the Rifle Range Area targeting the down-dip portions of the Dingo deposit. Further drilling is planned for a low-impact small track-mounted diamond drill rig for the Rifle Range area, further expanding the Resource potential over 2.5km strike length for the Southern Zone.

Prefeasibility Studies (PFS) are rapidly advancing with results of metallurgical test work expected to be available in early Q2 CY2022 and completion of PFS late in the same quarter.

•  Mine Development Studies - Work is underway to support studies for the Katanning Gold Project, which will assess potential mine development scenarios for the KGP. GR Engineering has been engaged to lead the engineering studies and the Company anticipates that a Prefeasibility Study for the initial stage of development at the KGP will be completed in Q2 2022.

•  Geotechnical, hydrogeology and metallurgical drilling is planned in the Central Zone and Dingo Resource areas to support future open pit and underground mining studies. This follows recent diamond drilling to collect geotechnical data, supported by down-hole televiewer programs in RC and diamond holes. Additional diamond drill holes will follow to collect samples for metallurgical optimisation testwork. Furthermore, additional groundwater monitoring wells will be installed to complement existing groundwater monitoring data.

•  Metallurgical test work - ongoing test work is now focused on optimisation of comminution process flow sheets and leach test work on fresh composites. Initial waste rock and tailings characterisation test work continues.

•  Community and environmental studies - stakeholder engagement is underway along with development of the approvals pathway.

Table 1 - Summary of results from leach tests (gold only)

SAMPLE ID	GRIND SIZE (P80, mm)	GRAVITY GOLD %	GOLD EXTRACTION (%)	REAGENTS (kg/t)
24 hrs	48 hrs	NaCN	Lime
JINKAS SOUTH FRESH	125	31.4	80.8	82.1	0.57	5.18
JINKAS SOUTH FRESH	106	41.2	85.8	87.6	0.60	4.97
JINKAS SOUTH FRESH	75	40.5	88.2	90.0	0.77	5.16
JINKAS SOUTH FRESH	53	42.1	89.8	91.8	0.57	5.12
JINKAS FRESH MAIN	125	61.4	87.6	88.8	0.60	5.06
JINKAS FRESH MAIN	106	67.9	92.2	93.2	0.46	5.01
JINKAS FRESH MAIN	75	59.6	91.5	91.9	0.43	4.96
JINKAS FRESH MAIN	53	69.1	95.4	95.4	0.46	5.16
JINKAS TRANSITIONAL	125	60.2	92.6	92.6	0.74	4.18
JINKAS TRANSITIONAL	106	49.7	90.1	90.7	0.74	4.08
JINKAS TRANSITIONAL	75	55.2	93.5	93.8	0.68	4.59
JINKAS TRANSITIONAL	53	56.3	95.3	95.6	0.82	4.16
DINGO FRESH MAIN	125	45.1	86.0	86.6	0.85	3.81
DINGO FRESH MAIN	106	34.9	83.6	84.3	0.99	3.76
DINGO FRESH MAIN	75	38.3	87.9	88.7	0.93	3.77
DINGO FRESH MAIN	53	43.3	90.8	92.9	0.92	3.97
DINGO TRANSITIONAL	125	36.3	82.1	83.2	0.71	4.27
DINGO TRANSITIONAL	106	36.7	84.5	85.7	0.81	3.98
DINGO TRANSITIONAL	75	37.0	86.5	87.8	0.92	4.07
DINGO TRANSITIONAL	53	39.8	89.9	91.1	0.81	4.05

The Board of Directors of Ausgold Limited approved this announcement for release to the ASX.

On behalf of the Board

Matthew Greentree Managing Director Ausgold Limited

For further information please visit Ausgold's website or contact:

Matthew Greentree

Managing Director, Ausgold Limited T: [phone]

E:[e-mail]

About Ausgold Limited

Tonnes (Mt)	Grade (g/t)	Ounces ('000)
Measured	6.59	1.65	349
Indicated	21.97	1.19	841
Inferred	17.58	1.14	647
Total	46.14	1.24	1,837

Ausgold Limited is a gold exploration and development company based in Western Australia.

The Company's flagship project is the Katanning Gold Project, located 275km south-east of Perth and approximately 40km north-east of the wheatbelt town of Katanning. Ausgold holds a dominant ground position in this relatively underexplored greenstone belt, an area prospective for Archean gold deposits. The current Resource at Katanning is 1.84 Moz gold (Table 2).

Ausgold's portfolio also includes the Doolgunna Station Cu-Au project and the Yamarna Ni-Cu-Co project in Western Australia and the Cracow Au Project in Queensland.

Table 2 - Current Mineral Resource (Details in ASX release 7 December 2021)

Figure 1 - Regional map showing the KGP, other Ausgold projects and mineralised greenstone belts

The information in this report that relates to the Mineral Resource in Table 2 is based on information announced to the ASX on 7 December 2021. Ausgold confirms that it is not aware of any new information or data that materially affects the information included in the relevant market announcement and that all material assumptions and technical parameters underpinning the estimates in that announcement continue to apply and have not materially changed.

Competent Person's Statements

The information in this statement that relates to the Mineral Resource Estimates is based on work done by Dr Michael Cunningham of Sonny Consulting Pty Ltd, Daniel Guibal of Condor Consulting Pty Ltd and Mr Michael Lowry of SRK Consulting (Australasia) Pty Ltd and Dr Matthew Greentree of Ausgold Limited in 2021.

Dr Greentree is Managing Director and is a Shareholder in Ausgold Limited. Dr Greentree takes responsibility for the integrity of the Exploration Results including sampling, assaying, QA/QC, the preparation of the geological interpretations and Exploration Targets. Dr Michael Cunningham is an option holder in Ausgold takes responsibility for the Mineral resource Estimate for the Jackson and Olympia deposits and Mr Daniel Guibal takes responsibility for the Jinkas and White Dam Resources. Mr Michael Lowry takes responsibility for the Mineral Resource Estimates for Datatine deposit.

Dr Cunningham, Mr Guibal, Mr Lowry and Dr Greentree are Members of The Australasian Institute of Mining and Metallurgy and have sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration, and to the activity they are undertaking, to qualify as Competent Persons in terms of The Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code, 2012 edition).

The Competent Persons consent to the inclusion of such information in this report in the form and context in which it appears.

Forward-Looking Statements

This announcement includes "forward-looking statements" as that term within the meaning of securities laws of applicable jurisdictions. Forward-looking statements involve known and unknown risks, uncertainties and other factors that are in some cases beyond Ausgold Limited's control. These forward-looking statements include, but are not limited to, all statements other than statements of historical facts contained in this presentation, including, without limitation, those regarding Ausgold Limited's future expectations. Readers can identify forward-looking statements by terminology such as "aim," "anticipate," "assume," "believe," "continue," "could," "estimate," "expect," "forecast," "intend," "may," "plan," "potential," "predict," "project," "risk," "should," "will" or "would" and other similar expressions. Risks, uncertainties and other factors may cause Ausgold Limited's actual results, performance, production or achievements to differ materially from those expressed or implied by the forward-looking statements (and from past results, performance or achievements). These factors include, but are not limited to, the failure to complete and commission the mine facilities, processing plant and related infrastructure in the time frame and within estimated costs currently planned; variations in global demand and price for coal and base metal materials; fluctuations in exchange rates between the U.S. Dollar, and the Australian dollar; the failure of Ausgold Limited's suppliers, service providers and partners to fulfil their obligations under construction, supply and other agreements; unforeseen geological, physical or meteorological conditions, natural disasters or cyclones; changes in the regulatory environment, industrial disputes, labour shortages, political and other factors; the inability to obtain additional financing, if required, on commercially suitable terms; and global and regional economic conditions. Readers are cautioned not to place undue reliance on forward-looking statements. The information concerning possible production in this announcement is not intended to be a forecast. They are internally generated goals set by the board of directors of Ausgold Limited. The ability of the Company to achieve any targets will be largely determined by the Company's ability to secure adequate funding, implement mining plans, resolve logistical issues associated with mining and enter into any necessary off take arrangements with reputable third parties. Although Ausgold Limited believes that its expectations reflected in these forward-looking statements are reasonable, such statements involve risks and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements.