Tesoro secures funding to accelerate El Zorro towards development

A$40 million placement funds El Zorro’s next phase

Tesoro Gold Limited (ASX:TSO) has raised a sizeable war chest for its El Zorro gold project, securing firm commitments for approximately A$40 million at A$0.73 a share. The funding gives the Chile-focused developer room to advance Ternera towards construction while continuing the exploration needed to expand the project’s resource base.

The placement will issue approximately 54.8 million new ordinary shares. Its price represents a 9.9% discount to Tesoro’s 27 October closing price of A$0.81, and larger discounts to the five-day and 10-day volume-weighted average prices. Tranche 1 accounts for approximately A$32.8 million under existing placement capacity, while a further A$7.2 million tranche requires shareholder approval at an extraordinary general meeting expected in December.

Ternera development and exploration take priority

Tesoro said the proceeds will support engineering, permitting and project-readiness work at Ternera, including completion of the Definitive Feasibility Study, which remains targeted for delivery by the end of 2026. The company will also fund drilling aimed at extending the Ternera Mineral Resource and a district-scale programme targeting new discoveries across the broader El Zorro area.

The funding arrives after Tesoro established a 1.28 million-ounce maiden Ore Reserve at Ternera, supporting a planned mine life of more than 13 years, as detailed in the company’s Ternera ore reserve announcement. The new capital does not, however, amount to a final investment decision or guarantee that the proposed development will proceed; the DFS, permitting and subsequent financing and construction decisions remain ahead.

Tesoro Managing Director Zeff Reeves said the institutional support would allow the company to complete the DFS, advance engineering and permitting, and pursue a “two-pronged exploration strategy” covering extensions to Ternera and new discoveries across the El Zorro district. Earlier this year, the company had already advanced the project towards a DFS and development readiness, including work on financing plans and environmental studies in its El Zorro DFS programme.

Tesoro seeks greater ownership of the project

Alongside the capital raising, Tesoro has signed a binding term sheet to acquire the remaining 5% interest in Tesoro Mining Chile SpA from Inversiones Marlin Limitada. Tesoro currently owns 95% of the Chilean subsidiary; completing the transaction would give it 100% of TMC and increase its effective ownership of El Zorro to 95.4%.

Marlin will receive 11,682,850 Tesoro shares, equivalent to approximately 4.7% of the company’s issued capital after the placement. Half of those consideration shares will be voluntarily escrowed for six months. The acquisition, like the second placement tranche, is subject to shareholder approval and other customary closing conditions, making December’s meeting an important checkpoint for both the funding package and ownership restructuring.

Dilution arrives before the next technical test

The immediate trade-off for shareholders is dilution: the placement adds roughly 54.8 million shares, with a further 11.7 million consideration shares proposed for the minority-interest purchase. In return, Tesoro is seeking to accelerate the work needed to turn Ternera’s resource and reserve base into a permitted, financeable mine while retaining exposure to exploration upside across the district.

The next hard evidence will come from execution rather than the size of the raise: completion of the DFS, progress on permitting, the December approvals and the results of the planned resource-growth and discovery drilling. Until those milestones arrive, the A$40 million provides capacity to advance El Zorro, but not certainty over its eventual development economics.