Tesoro Gold Fast-Tracks Ternera as DFS Looms and First Gold Beckons

Tesoro Gold (ASX: TSO) has decided to skip the polite preliminaries and head straight to a Definitive Feasibility Study for its 1.82 million ounce Ternera gold deposit in Chile, signalling a growing confidence that El Zorro is edging from promising discovery to build-ready development.

The February 25 update outlines a clear shift in gears. Following completion of a structured program of technical trade-off studies, the board has elected to bypass a Pre-Feasibility Study and proceed directly to DFS, targeting delivery by the end of calendar 2026 .

For investors, the message is simple: management believes the heavy lifting normally done at PFS level has effectively already been done.

From Scoping Study to Single Pit Simplicity

Since releasing its 2025 Scoping Study, Tesoro has been refining the optimal configuration for a single open pit operation feeding a 3Mtpa processing plant . The preferred pathway centres on a conventional open pit and a plant capable of producing more than 110,000 ounces of gold per annum.

Managing director Zeff Reeves says targeted trade-off studies have defined “a clear, optimised development pathway centred on a simple single open pit mining operation and a 3Mtpa processing plant”.

In other words, this is not a complex, multi-deposit, multi-circuit puzzle. The development concept is straightforward - one pit, one plant, conventional metallurgy, dry stack tailings, and established infrastructure corridors for power and water.

On page 2 of the release, Tesoro details the scope of completed trade-off work, including final process flowsheet selection, site layout optimisation, tailings disposal assessment with preferred dry stack options, seismic risk analysis and infrastructure integration . These are typically the meat-and-potatoes issues resolved at PFS stage.

The board’s view is that a formal PFS would not materially enhance project definition and would simply consume time and capital.

Resource Base: 1.82Moz and Counting

The current open pit constrained Mineral Resource stands at 51.2Mt at 1.1g/t for 1.816Moz at a 0.30g/t cut-off, using a US$3,000/oz gold price and 94.5% recovery . That figure underpins the 1.82Moz headline.

Higher cut-off slices demonstrate solid grade resilience. At 0.70g/t, the resource totals 30.5Mt at 1.58g/t for 1.547Moz, and at 1.0g/t it is 18.5Mt at 2.06g/t for 1.225Moz . For a bulk open pit development, those grade profiles are respectable and provide flexibility in mine scheduling.

Importantly, 38,000 metres of diamond drilling is underway, with infill drilling more than 50% complete. An updated Mineral Resource Estimate is scheduled for the June quarter of 2026 to support the final DFS mine plan and initial Ore Reserve .

The production target remains based on a mix of Indicated and Inferred resources, and the company reiterates the usual caveats around geological confidence . The conversion of Inferred ounces to Indicated and then to Ore Reserves will be one of the key de-risking milestones over the next 12 months.

DFS Workstreams: Parallel Processing

Tesoro is not waiting for the ink to dry before getting on with it. Multiple DFS-level work programs are already underway .

These include additional metallurgical drilling and variability test work, geotechnical drilling to finalise pit wall parameters, detailed mining studies with South American contractor Stracon, infrastructure engineering for power and water, and vendor engagement for long lead items .

Page 4 of the announcement includes a development schedule chart that maps the path from DFS completion through Final Investment Decision and into construction and commissioning, with first gold flagged in 2029 . While timelines inevitably shift in mining, the visual makes clear that management is targeting FID shortly after DFS completion in late 2026.

The proposed site layout diagram on the same page shows a compact footprint - processing plant, ROM pad, waste dump and tailings storage facility clustered within practical haulage distance of the final pit shell . That simplicity should assist both capital control and operational efficiency.

Permitting and Funding: Running in Tandem

Permitting is progressing alongside engineering. Baseline environmental studies, which commenced in August 2025, are about 50% complete and scheduled for completion in August 2026 . Submission of the Environmental Impact Study to Chilean regulators will follow, with the review process extending into 2027.

Crucially, Tesoro is aligning engineering design with permitting requirements to avoid late-stage redesign headaches. That integrated approach is increasingly critical in Latin American jurisdictions.

On funding, the company confirms project finance discussions are ongoing . While no detail is provided, early lender engagement at DFS stage is standard practice for a project of this scale.

The Strategic Call

Skipping PFS is not unprecedented, but it does send a signal. Tesoro believes Ternera has reached sufficient technical maturity to justify the capital and effort of a full DFS. The company frames the move as disciplined capital allocation rather than haste.

For shareholders, the next 12 to 18 months will revolve around three key metrics: resource upgrade and reserve conversion, capital and operating cost clarity at DFS level, and steady progress through Chile’s environmental approval process.

If those boxes are ticked, Ternera could transition from a well-endowed discovery to a financeable gold development by the end of 2026 - and potentially into construction shortly thereafter.

As always in mining, geology is only half the story. But on current evidence, Tesoro is intent on writing the next chapter with pace and purpose.