Lightly traded Chilean gold producer Austral Gold (ASX:AGD) will...

Lightly traded Chilean gold producer Austral Gold (ASX:AGD) will acquire a Toronto listed junior exploration company Argentex Mining Corporation (TSXV:ATX; OTCQB: AGXMF) in a proposed share acquisition.

Argentex Shareholders will receive 0.5651 shares in Austral Gold valuing the former at C$0.08 per share or C$5.8 million in total.

Austral Gold's Guanaco mine in Chile produced 51,534 ounces in line with guidance of over 50,000 ounces at an all-in sustaining cost (AISC) of just US$771/AuEq ounce, and for the full financial year, AISC of US$694/AuEq ounce.

This saw cash proceeds from the sale of gold and silver of US$12.4 million for the June quarter and a total cash position of US$7 million as at 30 June 2015.

The plum for Austral Gold is Argentex's Pingüino silver-gold project in the Santa Cruz Province of Argentina includes 26.7 million silver-equivalent-ounces in the Indicated category at grades of 103.4 g/t silver and 0.58 g/t gold.

It is aligned along the Pingüino system where over 70 individual vein segments have been identified with a combined strike length of over 113 line kilometres.

A Toronto listing is also on the cards for Austral Gold.