Tesoro Gold: Develeping a Gold Project in Chile - DFS Coming by End of 2026

Key Concepts

• Eloro Gold Project: The flagship asset of Tesoro Gold, located in Chile, currently hosting a 2-million-ounce gold resource.
• Definitive Feasibility Study (DFS): A comprehensive study to determine the economic viability of a mining project, expected by the end of 2026.
• Infill Drilling: A drilling methodology used to increase the confidence level of a mineral resource estimate.
• Environmental Baseline Study: A mandatory process to assess the environmental impact of a project before development.
• Permitting: The regulatory process required to obtain government approval for mine construction and operation.
• District-Scale Exploration: The strategy of exploring a large, contiguous geological area (30 km long) for multiple gold deposits rather than focusing on a single site.

1. Company Overview and Strategic Focus

Tesoro Gold is currently focused on fast-tracking its Eloro Gold Project in Chile. The company is transitioning from an exploration-focused entity to a developer, with a primary goal of completing a Definitive Feasibility Study (DFS) and reaching a Final Investment Decision (FID) by the end of 2026.

• Key Asset: The Tanera gold deposit, which currently holds a 2-million-ounce resource.
• Exploration Upside: Beyond the Tanera deposit, the company is exploring a 30-km-long gold district that remains largely underexplored.

2. Infrastructure and Location Advantages

A significant competitive advantage for Tesoro Gold is the project's location, which avoids the common logistical hurdles associated with high-altitude Andean mining.

• Proximity: The site is located only 13 km from the ocean and 13 km from the Pan-American Highway.
• Utilities: Existing agreements are in place with owners of nearby desalination plants and power lines (located 20 km away) to supply water and electricity to the future mine.
• Accessibility: The site is at low altitude and easily accessible via a one-hour drive from the Copiapó airport.

3. Operational Roadmap and Methodology

Tesoro Gold is well-funded following a 34-million AUD capital raise, allowing for a dual-track strategy:

• Drilling Program: The company has allocated 38,000 meters of drilling for 2026.
  • 20,000 meters are dedicated to infill drilling at Tanera to support the DFS.
  • 18,000 meters are allocated to district-wide exploration.
• Development Timeline:
  • Mid-2026: Publication of an updated mineral resource estimate.
  • End of 2026: Submission of development/mining permit applications and completion of the DFS.
  • Mid-2029: Targeted date for first gold production, with management actively seeking to compress this timeline.

4. Geopolitical Environment

Managing Director Zev Reeves expressed optimism regarding the current political climate in Chile.

• Government Stance: The new administration is described as "pro-mining," with strong signals toward fast-tracking permitting processes.
• Regional Influence: The company notes a positive "spillover" effect from the pro-market policies of the Milei government in neighboring Argentina, which is influencing the regional investment climate.

5. Share Structure and Institutional Support

• Institutional Backing: Gold Fields remains a major shareholder, holding just under 13% of the company.
• Capital Structure: The company has approximately 175 million shares on issue and a cash position of roughly 25 million AUD.
• Ownership: Approximately 65% of the share capital is held by Gold Fields, institutional investors, and the board/management, indicating strong long-term support.

6. Market Perspective and M&A

• Valuation: Management argues that Tesoro Gold is currently undervalued compared to Australian-based peers, attributing this to a historical lack of investor familiarity with the Chilean jurisdiction.
• M&A Activity: As gold prices remain high, major producers are actively looking to replenish their production profiles. Reeves noted that Chile is viewed as a premier jurisdiction for companies looking to enter South America, leading to consistent "inbound traffic" and interest from potential partners or acquirers.

Synthesis/Conclusion

Tesoro Gold is positioned as a high-potential developer with a clear path to production. By leveraging a low-altitude, infrastructure-rich location and a supportive political environment in Chile, the company aims to de-risk the Tanera deposit while simultaneously unlocking value through district-scale exploration. The primary catalysts for the company in the near term are the completion of the DFS, the updated resource estimate, and the ongoing exploration results, all of which are expected to drive a potential market re-rating.