TriStar Gold ups capex estimate for Brazil project to US$296mn

Arizona-based TriStar Gold has increased the capex plans for its Castelo de Sonhos gold project in Brazil’s Pará state.

The company now estimates the investment needed for the project at US$296mn, up from US$261mn outlined in a 2021 prefeasibility study prepared by GE21 Consultoria Mineral.

"The updated study is a key step in our advancement of Castelo de Sonhos, demonstrating gold price leverage and robust economics at a time of record high gold prices and a scarcity of permitted development assets," TriStar's CEO Nick Appleyard said in a statement.

"TriStar's Castelo de Sonhos can fill a gap in the gold development space, with the potential to create value for all stakeholders. We look forward to advancing this project to a construction decision."

The study puts annual production at 121,000oz of gold over 11 years. 

Gold projects around the world have gained renewed appeal amid the escalation of the trade war and its potential negative effects on the global economy. This scenario has supported the rise in the price of the precious metal, which has historically been considered a safe haven investment.

TriStar now projects a long-term average gold price of US$2,200/oz compared to US$1,550/oz in the PFS. 

License

Last year, the federal prosecutor's office (MPF) requested that authorities suspend the environmental license for Castelo de Sonhos. Prosecutors alleged certain irregularities in the licensing process, including the absence of studies on potential impacts on indigenous communities and the failure to conduct prior, free and informed consultation.

TriStar emphasized that the permit remains valid and "in good standing," according to Pará’'s environmental agency Semas.

"TriStar's independent legal advice suggests that the company has demonstrated that the Castelo de Sonhos project does not have the potential to interfere with indigenous lands named in the prosecutor's case. The legal opinion also notes that it does not see the preparation of an indigenous component study and/or the completion of a free, prior, and informed consultation as justified; both items were recommended by the MPF," said the company, stressing the non-binding nature of the MPF's recommendations and their non-acceptance by Semas.