Austar Gold : January Operational Update

ASX Release

20 February 2020

AUSTAR GOLD JANUARY OPERATIONAL UPDATE

PRODUCTION CONTINUES TO IMPROVE AT MORNING STAR WITH HIGH GOLD GRADES (>15 g/t) MAINTAINED

Highlights

• Gold sales of $726,202 banked for the month of January with a substantial concentrate contribution from both prior periods and this month remaining to be refined;
• Prior processing performance issues have been resolved with good uptime being achieved by plant;
• 319 Oz fine gold and 43 Oz silver produced and sold for the month;
• A further 750 kg of gold bearing concentrate was produced containing an estimated 1.2
  - 1.5kg Au;
• Both Stones and McNally reefs continued to perform with average feed grade of >15g/t estimated for the month.

AuStar Gold Limited (ASX: AUL, or the Company) is pleased to provide shareholders with an operational update at its Morning Star production operations in Woods Point, Victoria.

Gold sales of $726,202 were received for January including $48,365 gold refined from prior period concentrates delivered in the month. Concentrate of 750kg containing an estimated 1.2 - 1.5kg gold was produced in the month (39 - 48 Oz Au) and remains to be refined, along with concentrate from earlier periods. These gold sales will be realised in February and recognised in the current quarter report.

Milling processed 960 dry tonnes in January with mining hoisting 872 tonnes of feed material to surface in the month. Average grade for the month was 15.6g/t Au. Waste production was minimal with only 10 tonnes of waste material needing to be hoisted to surface.

There were no lost time, safety, or environmental incidents for the month.

A continued focus on cost control saw the business as a whole generate net cash for the month.

Production outlook and initiatives:

Mining continues from the Stones and McNally reefs in February with Stones expected to complete mining in late February/early March. The McNally reef structure continues to extend down-dip with evident thickening on the main quartz vein structure apparent.

The Company's mining team are accessing lower production panels at McNallys via a decline drive from the McNally railhead and planning is now being undertaken to partially mechanise production form this zone to increase productivity.

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AuStar Gold Limited: ACN 107 180 441 | Registered office: 6 Bridge Street, Woods Point, VIC 3723

ASX Release

20 February 2020

The Company is also planning further operational enhancements at Morning Star, including:

• Installation of a pre-crushing circuit to the site ROM pad, to ensure a standardised feed size to mill. This is expected to increase mill throughput while reducing load on components, as well as potentially enhance gravity recoveries;
• Adding an additional gravity recovery circuit to the site tails stream. Presently, despite relatively high gravity recoveries at Morning Star, tails gold loss of up to 2-3g/t is occurring, partly due to the high feed grade being achieved by the Company's mining and geology teams. Test work undertaken by the Company's metallurgical team and external consultants indicates that a majority of this gold can be recovered by simple gravity methods, producing additional gold-rich concentrate available for leach recoveries;
• Upgrading of mining plant, including mechanisation to remove reliance on rail for ore movements.

Exploration:

Both in-mine and regional drilling programs are currently being planned and will be updated to shareholders as campaigns commence. Continued in-mine drilling success is obviously key to continuing and growing production at Morning Star.

A wealth of targets have been identified which the Company believes have the potential to deliver near-term gold production increases, and the identification of new resource definition opportunities, respectively. With AUD gold approaching $2,400/Oz the AUL board believes a more aggressive exploration profile now represents a compelling application of resources.

Site operations 6pm, Wednesday 19 February 2020

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AuStar Gold Limited: ACN 107 180 441 | Registered office: 6 Bridge Street, Woods Point, VIC 3723

ASX Release

20 February 2020

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Processed dry tonnes - Morning Star

Released on behalf of the board of AuStar Gold Limited.

AuStar Gold welcomes shareholder communication and invites all interested shareholders to make contact at any time.

For Further Information:

Mr. Bill Frazer	Mr. Philip Amery
Chief Executive Officer	Chairman
AuStar Gold Limited	AuStar Gold Limited
[e-mail]	[e-mail]
T: + 61 3 5777 8268	T: [phone]

About AuStar Gold Limited:

AuStar Gold is focused on building a valuable minerals inventory to generate sustainable economic production from its portfolio of advanced high-grade gold projects - with significant infrastructure including processing plant, a strategic tenement footprint, and prospectively-well positioned for near-term mining. In addition, AuStar Gold intends to develop its adjoining tenements in the Walhalla to Jamieson gold district (particularly the prolific Woods Point Dyke Swarm) into low-costhigh-grade gold production projects.

Disclaimer:

Statements in this document that are forward-looking and involve numerous risk and uncertainties that could cause actual results to differ materially from expected results are based on the Company's current beliefs and assumptions regarding a large number of factors affecting its business. There can be no assurance that (i) the Company has correctly measured or identified all of the factors affecting its business or their extent or likely impact; (ii) the publicly available information with respect to these factors on which the Company's analysis is based is complete or accurate; (iii) the Company's analysis is correct; or (iv) the Company's strategy, which is based in part on this analysis, will be successful.

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AuStar Gold Limited: ACN 107 180 441 | Registered office: 6 Bridge Street, Woods Point, VIC 3723