Austral Gold’s Q3: 22% Production Drop, Costs Surge, Casposo Reboots

Production Setback at Guanaco

Austral Gold Limited’s latest quarterly report for Q3 2025 paints a challenging picture for its flagship Guanaco mine in Chile. Production fell 22% quarter-on-quarter to 2,244 gold equivalent ounces (GEOs), primarily due to a tragic fatal accident in late August that forced the temporary suspension of the agitation leach circuit. Compounding the disruption were intermittent power outages linked to third-party network constraints, further limiting throughput.

This operational pause has had a pronounced impact on unit costs, with cash costs (C1) soaring 36% to US$3,475 per ounce and all-in sustaining costs (AISC) climbing 37% to US$3,768 per ounce. These figures reflect the cost pressures of lower production volumes and higher plant operating expenses. As a result, Austral Gold has revised its 2025 production guidance downward to 11,000-12,000 GEOs from an earlier estimate of 14,000-16,000 GEOs.

Casposo’s Revival and Strategic Growth

In contrast, the Casposo mine in Argentina marked a significant milestone with the successful completion of its plant refurbishment and commissioning phase. The plant produced 232 GEOs during Q3, with 80% of this output sold at an impressive average price of US$3,857 per GEO, generating approximately US$714,000 in sales revenue. This restart positions Casposo as a key growth asset, supported by an updated mineral resource and reserve estimate underpinning a net present value of US$72.7 million over a 74-month production period.

Looking ahead, Casposo’s production is forecast between 4,000 and 6,000 GEOs for the remainder of 2025, with operating costs expected to be significantly lower than Guanaco’s, at US$1,700-1,900 per ounce for C1 and US$1,750-1,950 for AISC. The company is also preparing to process ore from Challenger Gold’s Hualilán Project under a toll processing agreement starting in early 2026, which could further enhance throughput and revenue streams.

Financial Position and Equity Moves

Austral Gold’s financials reflect the operational challenges and strategic adjustments. The company ended Q3 with US$1.3 million in cash, or US$2.5 million including unrefined inventory, while financial debt remained stable at US$28.6 million. Notably, net current liabilities increased to US$17.1 million, influenced by related party loans reclassified as current and new pre-export facilities.

In equity investments, Austral reduced its stake in ASX-listed Unico Silver Limited by approximately 11 million shares during the quarter. This included transferring shares to repay a US$2 million related-party loan and selling shares on-market to raise around US$1.3 million for working capital. Despite these sales, Austral remains Unico’s largest shareholder and holds options exercisable until March 2026.

Exploration and Future Outlook

Exploration efforts continue to underpin Austral Gold’s growth strategy. In Chile’s Guanaco district, geological modelling updates and planned drilling aim to expand and upgrade mineral resources, with results expected in Q4 2025. Similarly, at Casposo, geological interpretations and sampling are advancing to support resource expansion and potential open-pit development.

While the fatal accident at Guanaco has introduced operational and reputational challenges, the company’s swift response and ongoing safety protocol enhancements demonstrate a commitment to responsible mining. Meanwhile, Casposo’s refurbishment and commissioning mark a pivotal step in diversifying Austral Gold’s production base and improving cost profiles.