Ternera Open Pit Study Shows US$663M NPV and 51% IRR at US$2,750 Gold
Tesoro Gold has released an expanded and upgraded scoping study for its Ternera open pit project in Chile, revealing strong economics and a 1.82 million ounce gold resource. The study highlights a straightforward development path with low capital costs and excellent gold recoveries.
- 1.82 million ounce constrained mineral resource with 62% indicated
- Post-tax NPV of US$663 million and IRR of 51.3% at US$2,750/oz gold price
- Low upfront capital expenditure of US$247.9 million
- Average annual gold production of 111,000 ounces over 14 years
- Simple CIP processing with gold recoveries exceeding 94%
Expanded Ternera Scoping Study Highlights
Tesoro Gold Limited has unveiled the results of its expanded and upgraded scoping study for the Ternera open pit gold deposit, part of the broader El Zorro Gold Project in Chile. The study confirms a robust mineral resource of 1.82 million ounces of gold, with a strong classification of 62% indicated resources, underpinning confidence in the project's scale and continuity.
The project economics stand out with a post-tax net present value (NPV) of US$663 million and an internal rate of return (IRR) of 51.3%, based on a conservative gold price assumption of US$2,750 per ounce. These figures underscore the financial viability of Ternera as a significant new gold development opportunity in a premier mining jurisdiction.
Operational and Financial Metrics
The study outlines a 14-year mine life with an average annual production of approximately 111,000 ounces of gold. The operation is designed around a single open pit mine with a throughput of 3 million tonnes per annum, employing a simple carbon-in-pulp (CIP) processing route that achieves gold recoveries exceeding 94%. This metallurgical simplicity reduces technical risk and supports a relatively low upfront capital requirement of US$247.9 million, including US$40.1 million in pre-strip costs.
Operating costs are competitive, with an all-in sustaining cost (AISC) averaging US$1,216 per ounce over the life of mine. The project’s payback period is estimated at 20 months post-tax, reflecting strong cash flow generation potential. Sensitivity analyses indicate the project maintains robust value across a range of gold price scenarios, with upside potential if prices rise.
Strategic Location and Growth Potential
Located in Chile’s Coastal Cordillera, the El Zorro Gold Project benefits from proximity to established infrastructure, including ports, power, and transport links, as well as a supportive mining jurisdiction with streamlined permitting processes. Tesoro highlights the district-scale potential of the project, with ongoing exploration targeting extensions to the Ternera deposit and additional nearby prospects such as La Brea.
The company is advancing environmental baseline studies and permitting activities in parallel with detailed prefeasibility workstreams. Managing Director Zeff Reeves has invited shareholders and interested parties to submit questions about the study, which he will address in an upcoming video presentation, signaling Tesoro’s commitment to transparency and stakeholder engagement.
Sustainability and Corporate Strength
Tesoro emphasizes its alignment with United Nations Sustainable Development Goals, focusing on health and safety, environmental stewardship, and community partnerships. The company benefits from a seasoned board and management team with deep Chilean expertise, supported by a strategic investment from global gold producer Gold Fields, which holds a 5.5% stake and continues to collaborate on exploration efforts.
With a straightforward development pathway, strong economics, and significant exploration upside, the Ternera open pit project positions Tesoro Gold as a compelling player in the Chilean gold sector, poised for value creation in the coming years.
Bottom Line?
As Tesoro advances Ternera towards development, investors will watch closely for permitting progress and exploration results that could unlock further value.
Questions in the middle?
- How will Tesoro prioritize exploration targets beyond Ternera to expand the resource base?
- What are the key permitting milestones and timelines for the El Zorro project?
- How might fluctuations in gold prices impact the project's financing and development schedule?