TriStar Gold - LP Environmental Permit Court Case Update

Hey, everyone. Welcome to the K.E. Rupport and a company update from Tristar Gold. I am chatting with the president and CEO, Nick Appoliard.

Tristar just released a news release today earlier today before the market open on a court update for the next steps on this court case for that already issued LP environmental permit for the Castella,

dissonius project in Brazil. Now, I think a lot of our listeners have followed along with this story is Nick and I have been talking about the permitting and then the permit being issued and then this challenge coming on that permit and now this court case trying to get some clarity on when this court case could end and what still needs to happen for this court case simply to progress.

So Nick, throughout this news release, I really wanted to get you on when I saw this news release to give some clarity around what's happening here. So I know it's laid out in the news release, but I want you just to simplify it for us, please explain in a way what step you're at or how this court case is progressing, please.

Yeah, happy to Corey and thanks for having me on. Yeah, so where we're at now is what they call the evidentiary phase. The court has asked the various parties just to supply a list of, I guess, facts in contact that are contested and they won't recommend to the court that the court hires independent experts and goes out and get tries to get to the truth of the contested facts.

Yeah, so all parties have now submitted that those reports, no one's really come up with anything targeted on the other side against us. Obviously the MPF, they didn't actually ask for any additional information, which surprised us because they haven't supplied any facts or evidence.

But now so now it's in the judge's hands as to what he does. So he

obviously has the authority to say, OK, I have enough evidence to make a decision. He can make a decision, obviously, for either side or he can say, OK, let's move into the evidentiary phase. The court is going to hire independent experts to examine these facts.

Or I guess there's another option available to the court where he can decide to try and push the parties into negotiations. I look, you know, I think you guys are that far apart rather than us doing all this work and wasting all this time. Why don't you go and sit in a room and see if you can come to a solution. So that's where we're at. We're waiting on that court decision right now.

So Nick explain what these contested facts are because initially I think there was a fairly long list of contested facts, but every time I talk to you, all that I understood was that they were saying that this project or development of the project could impact in some way, some of the native Aboriginal groups in the area, but you've been on the show saying there aren't any groups in the area.

Where do these facts stand now? How many are there? These contested facts.

Right now it's just down to one issue as you correctly stated when they started, they had a shopping list full of issues, but none of it had any substance to it. So they're really down to the perning and the indigenous consultation that is done prior to issuing a permit.

The federal government claimed that the state didn't put us through the correct protocols to permit a project that they believe may impact on an indigenous reservation indigenous population.

But as you say, it seems ridiculous to us there are indigenous groups within about 30 kilometers of us, but they are upstream and the other side of a hit range of hills.

So there's no impact from us to them. It's scientifically impossible for a water or anything that might be contaminated flow uphill and go over hills and get to where they are.

So we still stand by the fact that we don't see and interestingly now both the federal prosecutors have admitted they can't see any impacts either, but they're just now pushing this precautionary argument to saying that

they're basically saying, and our studies haven't been done to absolutely rule out any possible impacts of potential impacts.

Basically trying to switch the onus round on to us and say you have to prove beyond the shadow of a doubt that there's no potential impact in there and it's it's very hard and we did the I we spent two years working on exactly that and we believe we've done it.

The state believes we've shown that and it's very hard for us to understand their argument one, you know, the one argument they put in into their filings recently relates to the interconnectivity of all river systems.

But if you, but if what they said is true pretty toast to every project within the greater Amazon basin would be affected the same way and would have to follow the federal rules on this rather than the state rules.

And that simply isn't a practical result or isn't a true true fact.

Yeah, it's a very strange situation to us right now, but it really is a fight between the federal government and the state government over who gets control of permitting these projects.

So in terms of possible outcomes as you laid out there, yes, the judge could simply make a ruling the government could further hire people to look into these contested facts or this one contested fact.

Come out with a ruling on that and or they could make you and this other party come together in some sort of a discussion.

So one, if that happened, if they said you two parties need to come together and come up with a solution here, is that some sort of a mediated event or have there even been any discussions between the both of you in terms of some sort of I guess handshake agreement of a resolution that works for both of you.

Give us the land on that possible outcome trail, I guess.

Well, I should say there is actually a fourth outcome possible or possible outcome and that is that we are we come to an agreement with the MPF, the federal prosecutors ahead of the court, making a ruling as well.

So that is another sort of an out of extra judiciary agreement, they call it.

So that is another option. We're very open to that, I think.

Yeah, I must admit, I don't know the exact structure and I think the court can dictate how that works and you know, so it would vary on from judge to judge.

But what we have seen is that most of these issues get dealt with, they get negotiated away and then the projects move forward.

It is worth pointing out at this point that from what I am told repeatedly, there's no one down there who wants to stop this project.

This isn't about stopping mining, it's not an anti mining group, it's about trying to get money and funds into the indigenous groups.

So for that to happen, they need the project to go ahead. So there is still a desire for this project to move forward.

It's just about money, you know, who's going to get their cutter and how that will look.

It always comes down to money, doesn't it?

Now in terms of a defined date of a decision or some sort of ruling, is there anything on the horizon that we can really look to or circle in our calendars?

Unfortunately not, there's no, you know, I mean, up until now the court system has been quite efficient and quite quick, but we don't have an actual timing available on this at all.

I mean, it's, yeah, it's a complete unknown to me. I mean, I think it'll be a few months, there's probably a couple of months, there's probably the median time for a guest, but that is still a fairly wild guest.

You know, good judge could make a decision quickly here or it could take longer.

Okay. So I guess Nick, let's look past all this. I know this kind of came out of the blue a while ago, because we had celebrated this LP environmental permit being issued to the company and all the work that went into that.

The stock reacted very well to that. The stocks done pretty well early on this year and now has moved sideways for the last let's say month and a half.

But it is at a generally higher level, but when you consider that this is a two and a half million ounce resource that includes almost a million and a half ounces of reserves.

You've done economic studies on this. Your market cap right now is about $110 million Canadian. What sort of value do you see any sort of ruling as long as it's one that doesn't shut down this project doesn't even sound like that's really on the table.

What sort of value do you see that this could unlock once this I guess court cases behind you?

Well, no, and that's where it gets actually quite exciting because I think this this isn't in some ways an artificial process, which is artificially suppressed a share price, which should be much, much higher.

If you look at this trading, as you said, for just over 100 million Canadian at around current metal prices, the post tax MPV of the project is going to be just over $2 billion.

Obviously, you don't try it at one times in NAV, but even if we're sort of 0.2 times that that would indicate at least a five times increase in our share price to where we could be when this gets unlocked.

I think I said earlier, we really have an aim and a drive and a belief that we can get this clarified this year.

It's not a long time for a potential multi-multiple gain on the current share price.

So I guess the one rest that people would see is if you quite simply ran out of money to continue this court case, where do you stand in terms of cash in the bank for tri-star?

We're going to have 4 million US in the bank right now.

So obviously we're good through this year. If we don't see this being resolved this year, we will top up at some point.

We have some warrants that would probably come into the money as well.

So yeah, we will need to, if this looks like it's going to go on beyond this year, we'll have to raise money.

And obviously if this goes away like it gets resolved as we hope it will, we would still need to raise money, but we'll be doing it at a much higher share price.

Okay. Hey Nick, thank you for addressing these questions. I really just want some clarity around this court case.

I know I have a lot of listeners that still follow along with this company and this project and would really love to see this behind you because they do see value in the resource and really how you could move it forward.

But right now this court case has, I guess, temporarily just put you on hold as you deal with this.

So for everyone listening, please email me any further questions you have. I'm happy to get Nick to address those and I will follow up if we get any news when we get some news on this court case and any solution or next steps that we can talk about.

Again, Nick, Apple Yard President and CEO of TriStar Gold Company is traded on the TSX Venture Exchange under the symbol TSG and on the OTC QB under the symbol TSG ZF.

Nick, thanks for taking this call today. I appreciate the update and the explanation here.

Okay, this is pleasure. Always Cory.