TriStar Gold

Overview

It’s no secret that the mining sector is capital intensive. Finding gold alone is a lengthy process that involves discovery, development, and production. Without reliable financing, proven leadership, access to stable mining regions and industry expertise, navigating through these critical stages can be challenging.

TriStar Gold (TSXV:TSG,OTCQX:TSGZF) is a fully funded gold exploration and development company focused on expanding its resources in Brazil, which is one of the world’s largest gold producers, in the state of Pará, one of the country’s major mining jurisdictions. The company recently completed a US$8 million agreement with Royal Gold (NASDAQ:RGLD) regarding its acquisition of a 1.5 percent net smelter royalty (NSR) on TriStar’s Castelo de Sonhos property.

The company’s wholly owned Castelo de Sonhos property covers 17,177 hectares and a large-scale paleoplacer gold deposit. Resource development is expected to be direct and unchallenging due to widespread, shallow-dipping surface mineralization, a predicted rate of 98 percent gold recovery and the absence of sulphides, greatly simplifying extraction processes and maximizing sustainability for years to come.

TriStar Gold’s Castelo de Sonhos project has a combined total 2-million-ounce National Instrument 43-101 resource estimate of 17.7 million tonnes of gold in the indicated category at 1.2 grams per tonne (g/t), totaling 0.7 million ounces of gold. In the Inferred category, the estimate highlights 39.8 million tons at 1 g/t, meaning 1.3 million ounces of gold. However, 20,000m of infill drilling has been completed in areas of inferred resource, so an update is anticipated. The project is located in a mining-friendly jurisdiction and benefits from excellent access and infrastructure.

A preliminary economic assessment (PEA) conducted in November 2018 indicates a pre-tax internal rate of return (IRR) of 51 percent at a gold price of US$1,250, a pre-tax net present value (NPV) of US$319 million and a post-tax NPV of US$264 million. At $1,750 gold and 5:1 exchange rate pre-tax IRR is 100% and NPV is US$730 million. The company has initiated a prefeasibility study( PFS) with results aimed for the second quarter of 2021. The 20,000 meters of infill drilling is mostly completed and published, we are waiting for the modeling and the engineering now.

In October 2020, the company began a major exploration drill campaign at its Castelo de Sonhos property to test new targets and expand known resources. Multiple discoveries have been identified in collaboration with artificial-intelligence-powered algorithms provided through GoldSpot’s (TSXV:SPOT) leading technologies.

The company’s president and CEO, Nick Appleyard, commented, “We’re pleased with the results we’re getting from the infill drill program, not only for the occasional high-grade findings, but for the entirety of the infill drilling program, which is producing results consistent with our PEA resource model. With these additional 20,000 meters of infill drilling now complete, we anticipate that we’ll be able to convert much of the inferred resource in Esperança South into indicated resources, which can serve as a solid base for reserve estimations in the PFS.”

The company’s Castelo de Sonhos project benefits from significant exploration upside potential, with multiple regions identified as potential hosts of gold-bearing conglomerates at or near the surface. While drilling has confirmed the presence of gold in many areas of the property, including Esperança South, Central and East, large areas remain unexplored. To date, TriStar has drilled only a fraction of the property’s near-surface, shallow-dipping mineralization potential.

TriStar Gold’s Company Highlights

• TriStar Gold is a fully funded gold exploration development company with a wholly owned 17,177 property in Pará, one of Brazil’s major mining jurisdictions.
• The company completed a US$8 million agreement with Royal Gold for an acquisition of 1.5 percent NSR on TriStar’s flagship Castelo de Sonhos project.
• The Castelo de Sonhos project has a combined total 2-million-ounce NI 43-101 resource estimate of
  • 17.7 million tonnes of gold at 1.2 g/t and 0.7 million ounces of gold in the Indicated category and
  • 39.8 million tonnes at 1 g/t containing 1.3 million ounces gold in the Inferred category.
• The company has completed a PEA indicating:
  • pre-tax IRR of 51 percent at a gold price of US$1,250
    • 100% at US$1,750 and current exchange rate
  • pre-tax NPV 5% of US$319 million and a post-tax NPV 5% of US$264 million
    • US$730 million at US$1,750 and current exchange rate
• A PFS is close to being complete, with results expected to increase valuations.
• The project benefits from significant exploration upside potential.