TriStar Gold (TSXV:TSG) - $603M NPV, 80% Peer Discount Gold Developer Awaits Court Ruling

**Nick Appleyard** (0:00)
Hi, I'm Nick Appleyard. I'm the CEO of TriStar Gold, and TriStar has one project, which is Castelo de Sonhos in Praia State, Brazil, and it's a gold-only asset.

**Crux Investor** (0:13)
They could see. It's been a while since we've seen it, seen you. And we're going to get into why that is in a second. But I think, first of all, for folks, can you give us the headline numbers for the PFS, if you don't mind?

**Nick Appleyard** (0:27)
Yeah, of course.

**Crux Investor** (0:28)
Yeah.

**Nick Appleyard** (0:28)
So we completed the PFS a few years ago, then updated it last year. As I said, it's gold-only. So we have 1.4 million ounces of reserves in the probable category at a grade of 1.3, I believe.
And yeah, the really big important thing is, how much money does it make?
So we did it at a base case gold of $2,200. At that, we make a return of 40% and you're making a post-tax NPV of over 600 million US. Unless you go up to $3,200 gold, you're looking at a post-tax return of $1.4 billion. So it's a super exciting, very economically viable project from that point. And I guess the other big number that people like to hear is the initial capital. When we did it this time or a little bit earlier in May last year, it was around 300 million US or just under.

**Crux Investor** (1:27)
Okay. Well, we're kind of running a series that I'm called, well, undervalued or heavily discounted companies. You know, I think I'd love you to kind of argue for why you think that you are trading at such a discount. If you look at your peers, you're suggesting that you're trading at one of the deepest discounts in the sector. I mean, discuss.

**Nick Appleyard** (1:46)
Yeah, absolutely. So, you know, we completed that PFS, which went through. We were super excited as a team that we got a great asset in a great location, near all the infrastructure and other mines in the region. So, you know, we were excited. I went straight into permitting. We got our main environmental permit in Brazil, the LP. And within a week or so of us getting that, we received a legal challenge, starting from the Federal Prosecutors, relating to Indigenous consultation. It didn't make any sense to us. And initially, it wasn't us, it was the state they were attacking and not us, and the state defended their position. But it escalated last year to the Federal Prosecutor's Law to a lawsuit against the state of Pará, and us named as a co-defendant. And that has been what's in the shadow, well, the cloud over our company this last two years now. Yeah, I believe that when I look at our peer evaluations, I think we're about at a descent discount right now, purely because of this. And we feel like we're getting towards the end of it now, we're getting it resolved. But just to give people an understanding of what the argument was is, in Brazil, your permitting for a project of this scale is all state level, unless you hit certain triggers. Our permit through the EIA process, working with the state, didn't hit any of those triggers, didn't come close to any of those triggers. And those triggers would actually change it from state level permitting to federal level permitting with this Indigenous Component Studies and a lot more work would be in Indigenous Culture in the region. As I said, we didn't hit those triggers, so it was never escalated to the federal level. And that's what the more suits about the federal government assuming the state saying, you should have set this up to us and done a different route from the permitting.
A frustrating bit for us is if they had done that, we would have done the second route. The second route in permitting isn't instructive of mining. It's just a different route, a different path and different studies. And we could have had all of that done by now if they had said that in the beginning.
But that's where we're at. There's this fight between the state and the federal government, and that's put a cloud over us.

**Crux Investor** (4:13)
But is the cloud breaking?

**Nick Appleyard** (4:14)
It is, we feel like the, you know, I want to be honest with these investors, in the legal route to resolve the issue, we still feel very strongly that we have no impacts on the indigenous. We still, we don't hear any of those triggers basically related to impacts from the mine into indigenous areas. We're a long way from them and we don't have any impact into them. But the legal route, just following it through the courts is very long and not really buyable for us. So the resolution that we're looking for is a negotiated settlement with the Federal Government. We're very happy to do these studies with the indigenous.