TriStar Gold (TSXV: TSG; OTC: TSGZF) has closed its previously announced non-brokered private placement with Auramet Capital Partners, which purchased 25 million units of the company for gross proceeds of $5 million ($0.20 per unit).
Each unit comprises one TriStar common share and one-half of a common share purchase warrant. The warrants are exercisable at $0.30 per share for a period of 24 months.
Auramet is the investment affiliate of Auramet International, one of the largest physical precious metals merchants in the world. As a result of the offering, it now holds approximately 9.8% of TriStar's outstanding share capital.
TriStar is planning to use proceeds of the offering to advance its flagship Castelo de Sonhos project in Brazil. A pre-feasibility study released in October 2021 revealed the potential for a large-scale development of a project with an after-tax net present value of US$321 million (at 5% discount) and 28% internal rate of return.
"We view Auramet as a sophisticated financial market participant and see its investment as further validation of the value we see at Castelo de Sonhos," TriStar's president and CEO Nick Appleyard stated in a March 31 press release.
Over an estimated 11-year mine life, Castelo de Sonhos' total gold production is expected to reach 1.3 million oz., beginning with average annual output of 146,000 oz. in the first phase (Esperança South deposit in years one through six) and then 91,000 oz. in the second phase (Esperança East and Center deposits in years seven through 11).
The production is based on total probable reserves of 1.4 million oz. (38.7 million tonnes grading 1.1 g/t) from the three deposits. Total indicated resources are estimated at 1.8 million oz., contained in 53.1 million tonnes grading 1.0 g/t.
More details on the Castelo de Sonhos project can be found at www.tristargold.com.
April 24, 2024
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