Castelo de Sonhos PFS: $603M NPV, 40% IRR
TriStar Gold Inc.'s Castelo de Sonhos in Brazil has a Pre-Feasibility Study (PFS) outlining an after-tax NPV of $603M, an after-tax IRR of 40%, and initial capital of $296M. The mine plan runs 11 years at about 121 koz Au per year.
TriStar Gold Inc.'s Castelo de Sonhos has reported Pre-Feasibility Study (PFS) results for the gold project in Brazil. The study headlines an after-tax net present value of $603M at a 5% discount rate. It reflects TriStar Gold Inc.'s (TSG.V) latest disclosed economics for the asset.
Economics. The after-tax NPV is $603M using a 5% discount rate. After-tax IRR is 40%. Initial capital expenditure is estimated at $296M. The study models a payback period of 2 years. All-in sustaining costs are pegged at 1111 USD/oz. Economics are based on Base case US$2,200/oz Au; also shown at US$3,200 gold (IRR 72%, NPV5 US$1,353M).
Production and mine plan. The project envisions an open-pit operation. Life of mine is 11 years. Average annual production is approximately 121 koz Au. Average head grade is Feed grades: 1.3 g/t gold Phase 1 (years 1-6); 0.8 g/t gold Phase 2 (years 7-11). Metallurgical recovery averages 98%.
These figures are extracted from TriStar Gold Inc.'s technical disclosures and reflect the most recent PFS on file. Compare this project against other developers and producers in our project economics database, and always verify the numbers against the original technical report before making any investment decision.
Reserves & Resources
| Category | Tonnage | Grade | Contained |
|---|---|---|---|
| Probable | 38.7 Mt | 1.1 g/t Au | 1.4 Moz |
| Category | Tonnage | Grade | Contained |
|---|---|---|---|
| Indicated | 53.1 Mt | 1.0 g/t Au | 1.8 Moz |
| Inferred | 26.0 Mt | 0.9 g/t Au | 0.7 Moz |
Our Analysis
- IRR after-tax
- 40%
higher than 54% of 99 projects we track
- NPV after-tax
- $603M
higher than 61% of 134 projects we track
- Initial capex
- $296M
49% of NPV
costlier than 68% of 125 projects we track
- Payback
- 2yrs
slower than 51% of 76 projects we track
- Mine life
- 11yrs
- Discount rate
- 5%
- Study price assumption
- Base case US$2,200/oz Au; also shown at US$3,200 gold (IRR 72%, NPV5 US$1,353M)
- Spot gold today
- $4,107.00/oz
The build cost is the story. At roughly 7.4x the company’s entire US$40M market cap, the US$296M initial capex cannot be quietly financed. This is a nano-cap with a single tracked asset, so the cheque must come from outside: a strategic gold producer, a streaming or royalty partner, or a project-finance syndicate willing to back a Brazilian developer with no other portfolio. Each path implies meaningful dilution for existing holders, and that dilution, not the 40% after-tax IRR, will determine whether this works for current shareholders. The IRR clears the 20%+ hurdle a higher-risk junior needs to attract capital, and it ranks in the upper half of the 99 gold projects we track, but those figures assume the money arrives on reasonable terms.
The economics are the supporting act, and they are genuinely solid. The after-tax NPV of US$603M is about 15.1x the market cap, a gap that cuts both ways: either the market has not priced the asset, or it is skeptical about the financing path, jurisdiction, and execution risk inherent in a pre-feasibility study. A PFS narrows estimates to roughly a plus or minus 25% band, which is respectable but not a build decision. The 11-year mine life speaks to a durable asset, not a short-term punch, and the 2-year payback is moderate, better than half the gold projects we track. The base case assumes US$2,200/oz gold, well below the current spot of US$4,107/oz, so the study’s returns are not dependent on a heroic price deck; the upside case at US$3,200 gold shows an IRR of 72% and an NPV of US$1,353M.
Brazil is a mining-friendly jurisdiction, though not without its own permitting and social-licence frictions. The 5% discount rate sits at the low end of reporting convention and flatters the headline NPV, so treat the absolute figures with that in mind. The single question that decides this project is not whether the mine works, it is who writes the US$296M cheque, and at what cost to the current holders. If that capital arrives without crippling dilution, the asset stands on its own. If it does not, the 40% IRR is academic.
Our take, benchmarked against the project economics in the Mining Stocks database. Figures are estimates drawn from company technical reports — not investment advice; always verify against the source filing.