TriStar Gold Announces Positive PFS with 1.4 Moz Gold Reserves and Pre-Tax 33% IRR and $400 Million NPV After-tax NPV 5% of US$321 million at $1,550 base-case gold price A compelling after-tax IRR of 28% for a large scale, development asset in a mining-friendly
TriStar Gold Announces Positive PFS with 1.4
Moz Gold Reserves and Pre-Tax 33% IRR and
$400 Million NPV
After-tax NPV
5%
of US$321 million at $1,550 base-case gold price
A compelling after-tax IRR of 28% for a large scale, development asset in a mining-friendly
mining jurisdiction
Phase 1: average annual gold production of 146,000 ounces
Phase 2: average annual gold production of 91,000 ounces
LOM: average annual gold production of 121,000 ounces
AISC of US$900/oz
After-tax payback period of less than 3 years
Scottsdale, Arizona--(Newsfile Corp. - October 5, 2021) - On behalf of TriStar Gold Inc. (TSXV: TSG)
(OTCQX: TSGZF) (the "Company" or "TriStar"), GE21 Consultoria Mineral Ltda ("GE21") of Belo
Horizonte, Brazil, and Piteau Associates of Sandton, South Africa have completed the prefeasibility
study ("PFS") for the Company's Castelo de Sonhos gold project in southern Pará State, Brazil, which
includes an updated mineral resource estimate.
Nick Appleyard, TriStar's President and CEO, stated: "The prefeasibility study is a major step forward in
de-risking and advancing this compelling project. Mineral resources continue to grow, and we now have
a very significant 1.4 million ounces in probable reserves.
Additionally, the study indicates low costs from
a simple operation that results in anticipated payback in less than 3 years and an average Phase 1
production rate of about 150,000 ounces per year. This project has once again exceeded our
expectations, with 20% more gold production than was projected by our 2018 Preliminary Economic
Assessment".
The results of the PFS now replace the 2018 PEA, originally announced in the Company's press release
dated November 16, 2018. The PFS has incorporated several positive changes in the approach to the
planned development of Castelo de Sonhos compared with the 2018 PEA. The scope and other
changes incorporated in the PFS include:
Increased throughput
: Plant capacity has increased 21% from the PEA up to 10,000 tonnes per
day or 3.6 million tonnes per year.
Phased mining
: Mining operations will be conducted in 2 distinct phases:
Phase 1 is years 1 to 6 of operations and is 100% focused on mining the higher grade
Esperança South deposit.
Phase 2 is from year 7 to 11 and involves mining Esperança East and Center deposits.
Owner operator mining:
With the expanded operation and higher throughput, owning and
operating our own mine fleet is economically favorable compared to contract mining.
An Environment, Social Governance ("ESG") commitment:
a significant commitment to
ongoing environmental and social stewardship, LOM spending in excess of US$20 million.
Compelling economics notwithstanding the current inflationary pressures:
the initial
capital costs have increased from US$184 million in the 2018 PEA to US$261 million in the PFS.
The main components to this change in capex are:
21% increase in plant capacity
Inclusion of an owner operated mining fleet
Global market escalation, which may include short-term covid driven cost escalation factors
that will correct when the pandemic abates.
The Prefeasibility Study
The prefeasibility study was conducted by GE21 Consultoria Mineral Ltda ("GE21") of Belo Horizonte,
Brazil, and Piteau Associates of Sandton, South Africa, both of whom are independent of TriStar.
Key highlights of the PFS include:
Life-of-mine gold production of
1.3 million ounces
LOM average production of 121k oz per year in two phases:
Phase 1 (Esperança South, year 1-6) average production -
146k oz per year
Phase 2 (Esperança East and Center, year 7-11) average production - 91k oz per year
Cash cost of $877 per ounce
All in sustaining cost of
$900 per ounce
After-tax payback period of
less than 3 Years
Internal rate of return
pre-tax of 33%, post-tax 28%
Annual Gold production and AISC over the life of mine is presented in Table 1.
PERIOD
AVERAGE ANNUAL
GOLD PRODUCTION
CASH COST
US$/OZ
AISC
US$/OZ
PHASE 1 (YEAR 1 - 6)
146,000
$821
$854
PHASE 2 (YEAR 7 - 11)
91,000
$983
$990
LOM
121,000
$877
$900
Table 1, Average annual gold production, cash cost and AISC
The base case economics are calculated on a long-term gold price of US$1,550/oz, and a foreign
exchange rate of US$1 = BRL5.0.
The economics include the effect of the project royalties, including
NSR royalties totaling 3.5% and Brazilian federal gross royalty of 1.5%.
The figures and tables below show the sensitivity of pre-tax NPV and IRR to changes in the US dollar
gold price.
Figure 1, Sensitivity of pre-tax NPV5% (Millions) to gold price, base case highlighted in green, spot
price bracketed in teal.
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Figure 2, Sensitivity of pre-tax IRR% to gold price, base case highlighted in green, spot price
bracketed in teal blue.
To view an enhanced version of Figure 2, please visit:
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Figure 3, Gold production (Phase 1 in green) and AISC life of mine.
To view an enhanced version of Figure 3, please visit:
https://orders.newsfilecorp.com/files/4509/98543_fig3.png
Mineral Resource Estimate
This mineral resource estimate updates and replaces the last estimate that was published in a Company
press release dated March 16, 2021.
Geological model
In order to create a geological model that represents the Castelo de Sonhos Paleoplacer deposit.
Tristar, with the help of GoldSpot Discoveries, identified across the entire plateau, 15 litho-geochemical
units were interpreted and rendered as wire-framed solids. Some of these are sedimentary units that run
sub-parallel to the bowl-shaped stratigraphy of the plateau's meta-sediments. Others do not run parallel
to the general bedding direction; instead, they are non-sedimentary rocks that cut across the
stratigraphy. These were grouped into seven domains, separated by two erosional unconformities.
Block model
The resource block model uses 20×20×4m blocks, the horizontal dimension of the blocks is slightly less
than half of the 50m drill spacing. The block height is the same as the bench height chosen for the PEA
completed in 2018.
In each block, the volumetric contribution of the seven domains was calculated directly from the litho-
geochemical wireframes and the erosional unconformities. Approximately half of the blocks lie entirely
inside a single domain; the other half have a mixture of two or more domains.
All rock in the resource model is assumed to have a dry bulk density of 2.68 t/m
3
, the average of the
density measurements done on drill core in 2018.
For each domain that contributes to a block, Multiple Indicator Kriging (MIK) was used to estimate the
gold grade distribution of its selective mining units (SMUs) using nearby samples from the same
domain, with the SMU size based on planned equipment size, bench height, blast hole spacing, and on
the experience of the operating mine at Tarkwa, in the same type of paleo-placer gold deposit. A
200×200×25m search ellipsoid was used for the MIK estimates for every domain in every block, aligned
with the variogram model for the dominant domain.
Figure 4, Median indicator variography for the ferrous sediments, with the red line showing the
omnidirectional variogram in the bedding plane and the dotted dark red line showing the variogram
perpendicular to bedding.
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Resource Classification
Resource classification involved two steps: 1) conditional simulation of gold grades so that the
uncertainty on annual gold production could be evaluated; and, 2) development of an optimal pit shell to
ensure that reported resources could be reached by an open pit operation using realistic assumptions
for technical and economic parameters. 100 conditional simulations were created, ranked according to
the gold metal content within a flat ellipsoid centered on each block, with the ellipsoid set to a size that
captured one year of ore production at a rate of 10,000 tpd. If the 90% confidence interval for the local
distribution of gold metal content was less than ±15% of the mean, the block was classified as Indicated.
Blocks where this degree of certainty could not be achieved were classified as Inferred; because of the
search strategy used for grade estimation, blocks that do not have drill hole data within the range of the
variogram were not classified and do not contribute to the resource estimate. No blocks were classified
as Measured. Once the blocks had been classified using conditional simulation, a reporting pit shell was
developed using Whittle software, using all of the economic and technical parameters that were used to
calculate reserves, except for the gold price, which was set to a value slightly below the high of the past
decade, an intentionally optimistic assumption designed to ensure that the reporting pit shell includes
any resources that have reasonable prospects for economic extraction
by open pit methods during the
coming decade. Blocks outside the reporting pit shell were removed from the classified resource
inventory. Results are shown in Table 2 below.
Region
Classification
Tonnage (Mt)
Grade (g/t Au)
Metal Content
(Moz Au)
Esperança South
Indicated
29.0
1.3
1.2
Inferred
10.0
1.2
0.4
Esperança East
Indicated
5.0
0.8
0.1
Inferred
12.8
0.7
0.3
Esperança Center
Indicated
19.1
0.7
0.4
Inferred
3.3
0.9
0.1
Project Total
Indicated
53.1
1.0
1.8
Inferred
26.0
0.9
0.7
Table 2, Mineral resource estimate1 for the Castelo de Sonhos gold project (with an effective date of
October 4, 2021) above a reporting cutoff grade of 0.26 g/t Au. The Qualified Person is Leonardo de
Moraes Soares MAIG of GE21.
1
Project totals may appear not to sum correctly since all numbers have been rounded to reflect the precision of Inferred and Indicated mineral
resource estimates.
2
The reporting cutoff corresponds to the marginal cutoff grade for an open pit with processing + G&A cost of $US 12/t, metallurgical recovery of
98% and a gold price of $US 1,550/oz.
To meet the requirement of "reasonable prospect for eventual economic extraction" the mineral resources
must also fall within a bounding pit shell with 55° walls.
These are mineral resources and not reserves and as such do not have demonstrated
economic viability.
3
The metal content estimates reflect gold in situ, and do not include factors such as external dilution, mining losses and process recovery losses.
4
TriStar is not aware of any environmental, permitting, legal, title, taxation, socio-economic, marketing or political factors that might materially affect
these mineral resource estimates.
Mineral Reserve Estimate
The Mineral Reserves for Castelo de Sonhos are a subset of the Indicated Mineral Resources as
described above, as none of the mineral resources were classified in the Measured Category there are
no Proven Reserves.
Probable Mineral Reserves are modified from Indicated Mineral Resources and
are summarized in Table 3.
Inferred Mineral Resources are set to waste.
Region
Classification
Tonnage (Mt)
Grade (g/t Au)
Metal Content
(Moz Au)
Esperança South
Probable
24.2
1.28
0.99
Esperança East
Probable
3.1
0.82
0.08
Esperança Center
Probable
11.4
0.78
0.29
Project Total
Probable
38.7
1.1
1.4
Table 3, Mineral reserves for Castelo de Sonhos
The Mineral Reserve estimates were prepared by Guilherme Gomides Ferreira MAIG of GE21 , and have an effective date of October 4, 2021.
Mineral Reserves are reported using the 2014 CIM Definition Standards and are estimated in accordance with the 2019 CIM Best Practices
Guidelines. Mineral Reserves are based on the PFS LOM plan.
Mineral Reserves are mined tonnes and grade; and includes consideration for modifying factors such as loss and dilution.
Mineral Reserves are reported at a cut-off of 0.26 g/t gold.
The cut-off grade covers processing costs of $9.99/t, general and administrative
("G&A") costs of $2.00/t, a gold price of US$1,550/oz. and uses a 98% metallurgical recovery for gold.
Numbers have been rounded as required by reporting guidelines. There are no other known factors or issues that materially affect the Mineral
Reserve estimate other than which is disclosed above, and normal risks faced by mining projects in the jurisdiction in terms of environmental,
permitting, taxation, socio-economic, marketing, and political factors and additional risk factors as listed in the "Cautionary Note Regarding
Forward-Looking Information" section below.
Project Description
The Castelo de Sonhos operation will include an open pit gold mine and processing facilities with a
nominal milling rate of 10,000 tpd (3.6Mtpa).
Power will be supplied by a 17 km, 138 kV transmission line from a substation adjacent to Highway 163
near the town of Castelo de Sonhos.
At closure, all buildings will be removed, disturbed lands rehabilitated, and the property returned to
otherwise functional use according to future approved reclamation plans and accepted practices at the
time of closure.
Figure 5, Castelo de Sonhos project prefeasibility proposed layout.
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Mining
Mining will be based on conventional open pit methods (drill-blast-load-haul), which are suited to the
Project location, orebody and local site conditions.
Open pit operations are anticipated to run for 11 years including Phase 1 (Esperança South) for the first
6 years of operation, and Phase 2 (Esperança East and Esperança Center) for years 7 through 11. The
anticipated production rate is 3.6Mt of ore per year with a life-of-mine strip ratio of 9 : 1.
Owner-operated mining and fleet maintenance operations are planned for 365 days/year, with 3 8-hour
shifts planned per day with 4 operating teams. Initially, mining will be undertaken using 4.5m
3
bucket
hydraulic excavators and 42t payload haul trucks, with blasting of ore and waste.
Figure 6, Annual summary of tonnes mined and gold head grade.
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Metallurgy & Process
Process Flowsheet
Whole ore agitation leaching has been selected as the preferred process flowsheet for project
development. The plant will be designed to treat 10,000 tpd through crushing, grinding, hybrid
cyanidation and carbon in leach, carbon acid wash, pressure stripping, and thermal regeneration.
Electrowinning sludge will be dried and smelted to produce doré bars for shipment to third party refiners.
Based on the test work conducted this flowsheet is anticipated to result in a metallurgical recovery of
98% of the gold delivered to the plant.
Process Plant Operations
A run of mine stockpile area and the primary crusher dump hopper will be located adjacent to the
Esperança south pit rim close to the centroid of the deposit. ROM will be hauled from the pit and either
stockpiled for blending and/or subsequent reclamation by front end loader or direct dumped over a
400mm square opening stationary grizzly into the primary dump hopper, with a nominal capacity of 150
tonnes. Sonic fogger dust suppression will be provided above the hopper. A rock pick mounted on the
hopper will handle grizzly oversize. Material will be withdrawn from the dump hopper with a vibrating
grizzly feeder (1.6 x 3.7m with 150mm grizzly bar openings). Grizzly undersize will bypass the primary
crusher, oversize feeds the primary crusher (1.25 x 0.95m jaw, set at 150mm).
Combined grizzly undersize and crusher discharge will be conveyed to a conical, uncovered, 40,000
tonnes total capacity coarse pile (live capacity nominally 10,000 tonnes, equal to one day's production).
Material will be reclaimed by two vibrating grizzly feeders (1.6 x 3.7m with 150mm grizzly bar openings)
located in a tunnel beneath the pile.
The grinding circuit consists of an 8.5m diameter, 3.65m long (28 x 12 ft) fixed speed, 3,750 kilowatt
semi autogenous (SAG) mill operating in closed circuit with a 200 kilowatt pebble crusher and (primary)
cyclones followed by a 5.5m diameter, 7.5m long (18 x 25ft) fixed speed, 3,750 kilowatt, ball mill
operating in closed circuit with (secondary) cyclones. Lime and sodium cyanide will be added to the
SAG mill feed belt.