Tesoro gives Ternera a 13-year development base with 1.28Moz reserve

Single-pit reserve gives El Zorro a defined mine base

Tesoro Gold Limited (ASX:TSO) has converted Ternera from a sizeable resource into a mine plan: 42.8 million tonnes at 0.93 grams per tonne gold for 1.28 million ounces of contained gold. The maiden Ore Reserve sits entirely within one open pit and, on the company’s schedule, supports more than 13 years of production through a planned 3.0Mtpa processing plant.

The conversion rate is the headline within the headline. Ternera’s reserve contains about 87% of the 1.47Moz classified as Measured and Indicated in the August 2026 Mineral Resource Estimate, with no Inferred material included. That result gives the project a more substantial technical foundation than a resource statement alone, although it remains an estimate based on PFS-level work rather than an operating mine.

Gold price assumptions shape the pit and economics

The reserve pit was selected using a US$3,000 an ounce gold price, which Tesoro says was about 30% below the spot price when the optimisation was conducted. The PFS financial model then used US$3,500/oz and forecasts a post-tax NPV of US$994 million, a 57% post-tax IRR and a 17-month payback, all subject to the study’s assumptions and stated accuracy limits.

The development concept is conventional rather than experimental: truck-and-excavator open-pit mining feeding crushing, ball milling, gravity recovery and carbon-in-pulp processing. Metallurgical testing returned gold extractions of roughly 92.4% to 97.4% across the tested grind sizes, with 94.5% used as the design recovery assumption. Life-of-mine operating costs are estimated at US$1,538 per ounce, including mining, processing, administration and capital lease items.

Funding and permitting remain the decisive hurdles

The project is not yet construction-ready. Tesoro estimates pre-production capital at US$276.5 million, with a further US$46.3 million of sustaining capital in the cost tables. A separate PFS outcomes table lists pre-production capital of US$256 million, an inconsistency the company will need to resolve as the study advances. The cost estimates carry approximately ±25% accuracy, while the key financial outcomes are stated at approximately ±35%.

Ternera also remains a greenfield project with no project-specific infrastructure on site. Power and process-water arrangements are being investigated, while the environmental impact assessment and sectorial permit applications are described as about 75% complete, with submission targeted for the first quarter of 2027. Tesoro says it has begun discussions with financial institutions and will continue assessing debt, equity and other funding options, but acknowledges there is no certainty that the required capital will be available when needed.

DFS and drilling will determine how much value survives

The next formal milestone is a Definitive Feasibility Study targeted for completion during calendar 2026. That work is expected to refine the mine design, economics and development assumptions while testing further optimisation opportunities. At the same time, drilling continues on Ternera extensions and across priority targets in the wider El Zorro district, creating potential upside but not yet adding to the reported reserve.

For shareholders, the reserve removes one important uncertainty while leaving several expensive ones in place. The reserve has not been independently audited, the economic case is based on a PFS, and construction still depends on permitting, infrastructure, financing and execution. The DFS will show whether Ternera’s attractive reserve conversion can be carried through to a financeable project without a material lift in capital or a weakening of the production profile.