Tesoro’s El Zorro Faces Execution Risks Despite Strong Exploration Progress
Tesoro Gold has reported strong progress at its El Zorro Gold Project with significant drilling results and a $34 million capital raise to advance development and exploration.
- Three fully funded diamond drilling programs totaling 38,000m underway
- High-grade gold intercepts at Ternera deposit support resource upgrades
- New discovery drilling at La Brea confirms promising gold mineralisation
- $34 million placement completed to fund feasibility studies and development
- Share capital consolidated 15-for-1 to streamline structure and improve market appeal
Exploration Momentum Accelerates
Tesoro Gold Limited (ASX, TSO) has delivered a compelling update on its El Zorro Gold Project in Chile, reporting significant progress in exploration and corporate developments for the quarter ended 31 December 2025. The company is currently executing three concurrent diamond drilling programs, fully funded and targeting a combined 38,000 metres of drilling. These programs focus on infill drilling to upgrade resource confidence, extensional drilling to expand known deposits, and new discovery drilling aimed at uncovering additional gold targets across the district.
The infill drilling at the Ternera deposit has returned encouraging results, including intercepts such as 43.08 metres at 1.98 grams per tonne gold from 476 metres depth, and a high-grade section of 5.87 metres at 7.86 grams per tonne. These results reinforce the continuity of mineralisation and are expected to underpin an updated Mineral Resource Estimate (MRE) and support ongoing feasibility studies.
Expanding the Gold Footprint
Extensional drilling has also yielded promising shallow, high-grade gold mineralisation at the northern extension of Ternera, with notable intercepts like 10.06 metres at 1.70 grams per tonne, including 2.21 metres at 7.20 grams per tonne. Meanwhile, the new discovery drilling program has made an early impact at the La Brea prospect, approximately 15 kilometres north of Ternera. All five maiden drill holes intersected gold mineralisation with broad alteration zones, mirroring the geological signatures seen at Ternera and suggesting the potential for multiple large-scale deposits within the El Zorro district.
Complementing these drilling efforts, surface sampling at the Pena Blanca target has identified three compelling gold zones along a 5-kilometre trend, with channel samples returning grades up to 12.70 grams per tonne over one metre. These findings highlight the district-scale opportunity Tesoro is pursuing beyond its flagship deposit.
Strengthening the Balance Sheet and Corporate Structure
On the corporate front, Tesoro successfully completed a $34 million placement at $0.795 per share (post consolidation), providing the financial firepower to advance the El Zorro Project through to a positive Financial Investment Decision. The company also consolidated its share capital on a 15-for-1 basis, simplifying its capital structure and aligning it more closely with peer companies. This move is expected to enhance market accessibility and broaden investor appeal.
Additionally, Tesoro appointed Sarah Wilson as Company Secretary, replacing Sue Wong, and reported a healthy cash balance of $29.19 million with zero debt as at the end of December 2025. The company’s disciplined expenditure of approximately $5.8 million during the quarter focused primarily on exploration and feasibility activities.
Looking Ahead
With five drill rigs operating around the clock and advanced technical studies progressing, Tesoro is well positioned to continue expanding and de-risking the Ternera deposit while aggressively exploring new targets across the El Zorro district. The company’s strategic approach combines resource growth with rigorous feasibility work, setting the stage for a potential development decision in the near term.
Bottom Line?
Tesoro’s strong drilling results and fresh capital set the stage for a pivotal year at El Zorro, but investors will watch closely for upcoming feasibility milestones and resource updates.
Questions in the middle?
- How will the updated Mineral Resource Estimate impact the valuation of the Ternera deposit?
- What timelines is Tesoro targeting for completing its feasibility studies and making a development decision?
- Can the new discovery targets at La Brea and Pena Blanca deliver additional high-grade resources to extend project life?
