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TriStar Gold, Another Wits Lookalike in Brazil

Bob Moriarty
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Jan 3, 2020

We have a young new year; gold and silver are having their usual post Christmas boost as the end of year artificial selling stops. Investors should look forward to a number of companies releasing interesting and perhaps even exciting news in the next couple of weeks.

I wrote extensively about an interesting Wits analog deposit in Brazil a couple of years ago owned by TriStar Gold (TSG-V). Company president Nick Appleyard was smart enough to bring on Quinton Hennigh as a Director and advisor as Quinton is the go-to guy regarding Wits systems. Alas, I wrote the piece just as the price of gold and gold shares was starting a normal correction. So while the company has made a lot of progress, the price of the shares has not reflected the real and measurable success. Investors should read what I wrote a couple of years back and then peruse the November 2018 PEA.

Going back 20 years, we had a booming gold market starting with the low in gold in August of 1999. The rise in the price of the metals continued for a dozen years. Naturally investors believed they could invest using their rear view mirror and that didn’t work out so well as metals peaked in 2011 and tanked until the beginning of 2016 when we had a clear washout of investor sentiment and major bottom.

While 2016 was a great year for many gold and silver stocks, a lot of companies didn’t participate due to a general lack of interest. Mainstream investors were far more interested in chasing their tails in the form of Bitcon, Tesla and marijuana. But every dog has its day and as the Everything Bubble pops I think the circle will return to investments with real assets.

TriStar will have its day. The 14-month-old PEA used a base case of $1250 gold and showed about a 43% Pre-tax IRR. But we have $1500 gold today and that makes the numbers fly off the chart with a IRR in excess of 80%. Capex for the project was projected at about $184 million USD and an All In Sustaining Cost (AISC) of  $687 per ounce of gold produced.

The company presentation shows a 43-101 of right at 2 million ounces of gold. Given that its open pit, already has low cost of production gold grade and an almost unlimited ability to expand the resource, the shares will be attractive to a lot of investors as gold prices increase. A month ago the company closed a $2.2 CAD million private placement. They also have a payment of a last $1.5 million USD coming in March as the last piece of an $8 million USD investment by Royal Gold who bought a 1.5% NSR and was issued 20 million warrants at $.25.

The company is well positioned and cashed up for major progress in 2020. The Hedgeless Horseman, Quinton Hennigh and I are heading down to Brazil for a site visit in mid-February so I expect to expand my comments after that trip.

TriStar is an advertiser and I am biased naturally. I have participated in the latest private placement. Please do your own due diligence. I share in neither your profit nor your losses.

TriStar Gold Corp
TSG-V $.20 (Jan 02, 2020)

TSGZF-OTCBB 178.7 million shares

TriStar Gold website

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Bob Moriarty
President: 321gold
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321gold Ltd


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