Established gold producer Austral Gold Limited (Austral or the Company) (ASX: AGD; TSX-V: AGLD; OTCQB: AGLDF) is pleased to announce that the first tranche of the previously announced non-brokered private placement financing (Convertible Note Offering) of up to US$1 million or approximately AUD$1.6 million has been completed. The Company has issued 919,158 non-transferable unsecured convertible notes for gross proceeds of US$590,503 (approximately AUD$919,158), immediately following execution by the parties of an amendment agreement to allow for closing the private placement in two tranches, with the second tranche due within 30 days of this announcement.

The convertible notes were purchased by one arm’s length accredited and sophisticated investor, and the gross proceeds raised are expected to be used for working capital.

The notes, nominated in Australian Dollars, bear a 9% per annum interest rate and mature on the second anniversary of the date they are issued. Each note entitles the holder to convert the notes into ordinary shares of the Company at the holder’s option at a conversion price of AUD$0.059 (approximately C$0.051) per share during the first year and AUD$0.118 (approximately C$0.103) during the second year.

The notes and the underlying conversion shares will be subject to a four month hold period as required by applicable Canadian law. The notes will not be listed on any public market. The convertible notes may not be converted until after four months and one day from the date they are issued.