Ausgold Limited (Ausgold, or the Company) announced the results of the Prefeasibility Study (PFS) and Maiden Ore Reserve for the Company's 100%-owned Katanning Gold Project (KGP or the Project) located 275km south-east of Perth, Western Australia. The Project's underlying Mineral Resource is technically robust, being based on almost 234,137 m of RC and diamond drilling providing a high confidence geological model. The current mining areas are located on granted Mining Leases where small scale mining has been undertaken in the past and provides context for a large open cut mining development demonstrated within the current PFS.

The current PFS forecasts that the Project will generate AUD 981 million of EBITDA over the LOM and an average post-tax free cashflow during production of AUD 70 million a year. Over the first six years of production the Project is modelled to generate $92 million post tax free cashflow per annum during production. This projected cashflow underpins an outstanding internal rate of return of 40.7% (post tax) and a payback period of just 1.7 years required to payback expected pre-production capital expenditure.

Ausgold's forecast strong financial performance is based upon an annual production rate of 126,000oz per annum and an all-in sustaining cost (AISC) of $1,370/oz for the first six years of production. The maiden Probable Ore Reserve is 32Mt at 1.25 g/t for 1.28 Moz gold. The Project also has significant growth potential, with new drilling and additional high-grade mineralisation identified after the May 2022 Resource upgrade.

Current mining studies have considered the economics at a 0.6 g/t Au cut-off grade. It was noted at current economics lower grade ore is economic (>0.4 g/t Au) which realises a larger Resource base beyond the current PFS. The potential of a large mining operation at the KGP will be considered in optimisation studies over the coming months.

Material Assumptions & Outcomes - Open pit mine scheduling is based on realistic mining productivity, with readily achievable mining rates and consistent material movements. This is based on a typical mining fleet for a gold mining operation in Western Australia. Pit optimisations have been conducted at a A$2,200 gold price and mine planning developed using a 0.85 Revenue Factor and will produce 1.16 Moz gold over an 11-year LOM.

An open-cut mine production plan was generated around the mining inventory which targeted 3 Mt/a of ore processing and a mining rate limitation of 33 Mt. These targets can be achieved for a mine life in excess of 10 years, excluding Inferred Mineral Resource material and applying a 0.6 g/t Au cut-off grade. The onsite processing plant will treat a blend of oxide, transitional and fresh gold-bearing ores from the open pits at the KGP and is designed to operate at a throughput capacity of 3 Mt/a. The crushing circuit will be a conventional open circuit jaw crusher which will feed a SABC (SAG mill, ball mill and recycle crushing) comminution circuit.

Gold extraction will occur through conventional gravity and Carbon in Leach (CIL) with gold recovery via electro-winning. Metallurgical recoveries are based on recent test work which has been used to develop a recovery curve, an average recovery of greater than 90% is expected over LOM. Cut-off Grades (CoG) are based on project economics with open pit mining optimised to a 0.6g/t Au CoG, although lower CoG >0.4 g/t Au are considered economic under the study cost assumptions.

The production targets and key financial estimates included within this announcement and derived from the PFS are based on the Company's Maiden Ore Reserve, established in accordance with clause 29 of the JORC Code as an economically mineable Mineral Resource. All forward-looking financial and economic statements contained within this announcement regarding the Maiden Ore Reserve rely on compliance with the parameters of JORC Code ore reserve reporting and are accordingly established on reasonable grounds. Realisation of production targets and key financial estimates arising out of the PFS are dependent upon, and subject to, the assumption that the Company will have the necessary financial capacity to deliver those results.

The PFS estimates a funding requirement of A$225 million to cover the capital and operating costs applicable from the start of plant production to the end of plant construction and to the end of plant commissioning and the start of gold production. The Company intends to meet this funding requirement with a mixture of debt and equity which will need to be raised before construction can begin. Further, in the interim, the Company will likely require additional funds to progress the Project through to completion of a final Definitive Feasibility Study and financial investment decision.

The Company anticipates that it will be able to raise such funds through further equity issues.