Austral Gold Posts US$1.3M HY25 Loss, Completes Casposo Plant Refurbishment

Half-Year Financial Performance

Austral Gold Limited (ASX – AGD) has released its half-year report for the six months ended 30 June 2025, revealing a net loss of US$1.292 million. This marks a significant improvement from the prior year’s loss of nearly US$18 million, driven largely by a stronger gross profit margin of 23.1%, up from 6.1% in HY24. Revenue slipped slightly to US$18.57 million, impacted by a 31% decline in gold equivalent ounces sold, but this was partially offset by a 40% increase in realised gold prices.

The company produced 5,996 gold equivalent ounces from its flagship Guanaco/Amancaya mine complex in Chile, maintaining steady output despite operational headwinds. However, production costs rose, with cash costs per gold equivalent ounce increasing to US$2,253 and all-in sustaining costs climbing to US$2,448, reflecting equipment failures and reduced operational days.

Casposo Plant Refurbishment and Strategic Positioning

One of the report’s highlights is the substantial completion of the refurbishment of the Casposo Agitation Leaching Processing Plant in Argentina. This milestone positions Austral Gold to diversify its revenue streams by bringing a second mine complex into production. The company secured a US$7 million loan facility from Banco San Juan to fund this refurbishment, with repayments extended to 30 months and monthly installments commencing in November 2025.

Additionally, Austral Gold maintains a significant equity stake in ASX-listed Unico Silver Limited, enhancing its exposure to exploration projects in Argentina’s Santa Cruz Province. The company also entered a Toll Processing Agreement with Challenger Gold Limited, under which Casposo will process material from Challenger’s Hualilan project, providing a guaranteed throughput and upfront payment of US$2 million.

Liquidity and Going Concern Challenges

Despite operational progress, Austral Gold faces liquidity pressures. Cash and cash equivalents fell to US$1.05 million at June 30, 2025, down from US$3.59 million at year-end 2024. Net current liabilities increased to US$10.7 million, and combined net financial debt rose to US$27.5 million. The company recorded a net cash outflow from operating activities of US$664,000, reflecting ongoing working capital demands and supplier payments.

The directors acknowledge a material uncertainty regarding the company’s ability to continue as a going concern, primarily due to the net current liability position and the need to secure additional capital within the next 12 months. However, they express confidence based on projected cash flows from Guanaco, the anticipated restart of Casposo, ongoing financial support from major shareholders, and access to liquid equity investments that can be monetised if necessary.

Operational and Safety Update

The report also disclosed a tragic fatality at the Guanaco mine in August 2025 involving a contractor employee. Emergency protocols were activated, and investigations are underway. The financial impact of this incident remains uncertain at this stage.

Looking ahead, Austral Gold aims to increase production guidance for FY2025 to 14,000–16,000 gold equivalent ounces, leveraging the refurbished Casposo plant and ongoing operations at Guanaco. The company’s ability to manage costs, secure financing, and safely ramp up production will be critical to restoring profitability and strengthening its balance sheet.