Announcement PDF ASX ANNOUNCEMENT 9 JUNE 2020 ASX: TSO | ACN 106 854 175 Excellent Initial Metallurgical Testwork Results from El Zorro Up to 99% gold recovery ▪ Initial metallurgical testwork results indicate that Ternera material from El Zorro is free milling with gold recoveries up to 99% ▪ ▪ Gold recoveries reported were 94% at 250 µm grind size and 99% at 75µm grind size ▪ ▪ Ternera material is classified as hard to very hard with an initial bond work index of 20.4kWh/t ▪ ▪ Results indicate that treatment at coarser grind sizes does not compromise recoveries The material is amenable to gravity concentration with 55% to 75% of the gold reporting to the gravity concentration Initial testwork indicates the potential to use a gold processing circuit consisting of conventional gravity concentration with CIL for Ternera Mintrex Pty Ltd who is engaged as Tesoro’s metallurgical and process engineering consultant, has reviewed results and will advise on future metallurgical testwork programs and flowsheet design. Tesoro Resources Limited (Tesoro or the Company) (ASX: TSO) is pleased to announce the results of initial metallurgical testwork conducted on 50 kg of mineralised, fresh rock material from the Ternera deposit at the Company’s El Zorro Gold Project, Chile. Initial metallurgical results are positive and indicate that mineralised material from Ternera is free milling, with a high gravity recovered gold component and excellent cyanide leaching characteristics, amenable to conventional gravity and CIL processing methods. The work completed consisted of cyanide leach tests, gravity recovery testwork and determination of bond work index (hardness) testwork. The work was carried out by ALS Laboratories Pty Ltd (Perth) and results reviewed and interpreted by Mintrex Pty Ltd. Tesoro Managing Director Zeff Reeves commented: “These initial metallurgical results tick another box for the El Zorro Gold Project. The high gravity and cyanide leach recoveries achieved in this work support the potential for processing of material from Ternera using conventional gravity and CIL processes at a relatively coarse grind size. This work will enable the development of a detailed metallurgical testwork program to fully define the project flowsheet and continue to progress the project toward development.” 1 +61 8 9322 1587 | info@tesororesources.com.au | Suite 5, 62 Ord Street, West Perth WA 6005 | www.tesororesources.com.au ASX Announcement 9 June 2020 TERNERA TESTWORK RESULTS Metallurgical testwork was conducted on a 50 kg, single fresh rock sample composited from mineralised zones from four drill holes. The calculated head grade for the sample was 2.39g/t Au. The following testing was conducted on the sample: • Detailed head assay analysis • XRD mineralogical analysis • Bond Ball Mill Work Index Test • Gravity recoverable Gold (GRG) Test • Gravity Cyanide Leach Tests Head Assay and XRD Results Metallurgical sample – ZDDHMET-01 was prepared and assayed for gold and additional base metals and deleterious elements. The sample returned a head assay grade of 2.39 g/t and low levels of base metals. Initial results indicate there is limited preg-robbing material and reagent consumers, thus the material is favourable for leaching and adsorption (CIL). Assay results presented in Table 1. ANALYTE ASSAY RESULT UNITS Au 2.39 g/t As Ag Al Ba Be Bi Ca Cd Co Cr Cu Fe K Li Mg Mn Mo Na Ni P Pb SiO2 Sr STOTAL Ti V Y Zn <10 0.3 8.08 300 <5 <10 3.40 <5 20 150 56 3.62 1.60 25 2.12 600 <5 2.87 60 500 10 63.2 320 0.50 3800 90 <100 126 ppm ppm % ppm ppm ppm % ppm ppm ppm ppm % % ppm % ppm ppm % ppm ppm ppm % ppm % ppm ppm ppm ppm Table 1 – ZDDHMET-01 Head Assay results 2 +61 8 9322 1587 | info@tesororesources.com.au | Suite 5, 62 Ord Street, West Perth WA 6005 | www.tesororesources.com.au ASX Announcement 9 June 2020 XRD Analysis (powder X-ray Diffraction) was carried out in order to determine and quantify the minerals present within the sample. Results indicate that the sample does not contain any significant amounts of sulphides and that most of the sample is composed of chlorite, calcic amphibole, plagioclase, and quartz. Smaller quantities of softer minerals such as mica and calcite are also present. XRD results are presented in Table 2. Mineral or mineral group ZDDHMET-01 Mass % Pyrite Clay minerals Kaolinite Chlorite Annite - biotite - phlogopite Muscovite Calcic amphibole Plagioclase K feldspar Quartz Calcite 1 1 <1 10 10 4 13 36 1 22 3 Table 2 – ZDDHMET-01 XRD analytical results An initial Bond Ball Mill work index (BWi) is used to determine the resistance of the material to grinding in a ball mill. Results indicate BWi for the selected sample was 20.4 kWh/t. Although classified as “very hard” material, it is comparable to numerous operating gold mines around the world. Gravity Recoverable Gold (GRG) Testwork The sample ZDDHMET-01 was ground to a number of size fractions from 850 µm down to 75 µm to test for overall gravity recoverable gold. The results show that the ore is very amenable to gravity concentration and ideally up to 76% of the gold at a grind size of 75 μm can report to the gravity circuit. The amount of gold reporting to the gravity circuit is directly related to grind size which will affect operating and capital costs. A summary of GRG at various grind sizes is presented in Table 3. GOLD Material / Stage GRG Gravity Recoverable Gold - Stage 1 41.96 (%) [Gold in leach liquor from intensive cyanidation on Knelson concentrate] Gravity Recoverable Gold - Stage 2 26.99 [Gold in leach liquor from intensive cyanidation on Knelson concentrate] Gravity Recoverable Gold - Stage 3 7.64 [Gold in leach liquor from intensive cyanidation on Knelson concentrate] Intensive leach Tailing - Stage 3 0.10 Bulk Gravity Tailing - Stage 3 23.32 TOTAL GRG 76.59 Table 3 – ZDDHMET-01 GRG Testwork Results 3 +61 8 9322 1587 | info@tesororesources.com.au | Suite 5, 62 Ord Street, West Perth WA 6005 | www.tesororesources.com.au ASX Announcement 9 June 2020 Gravity and Leaching Testwork at different Grind Sizes Gravity and cyanide leaching testwork were conducted on the sample at progressively finer grind sizes to determine cyanide leaching characteristics and gravity recoverable gold. The sample was ground to 250 μm and then subjected to gravity concentration. The gravity concentrate was subjected to intensive leaching and the gravity tails divided into three samples and selectively: • leached with cyanide at 250 μm; • ground down to 106 μm; and leached with cyanide; and • ground to 75 μm and leached with cyanide. Gravity by the Knelson concentrators recovered 59.4% of the gold to the gravity concentrate at 250 μm. Leaching of the tails at different grind sizes recovered another 25.5% to 29.5% of the gold for overall gold extractions of 94.9% (at 250 μm), 98.3 % (at 106 μm) and 98.8% (at 75 μm). The overall gold recoveries and leaching kinetics are presented in Figure 1. Results indicate that the Ternera material can be treated at coarser grind sizes without materially compromising recoveries. Kinetics show that gold leaching can be achieved within 24 hours at all grind sizes evaluated. Initial results indicate there to be no benefit in grinding finer than 106 μm and due to the hardness of the ore, Mintrex have recommended that coarser grind sizes such as 150 to 180 μm be tested in future work, as coarser grind sizes have the potential to save energy and milling costs. Figure 1 – ZDDHMET-01 Gold recovery kinetics at different grind sizes 4 +61 8 9322 1587 | info@tesororesources.com.au | Suite 5, 62 Ord Street, West Perth WA 6005 | www.tesororesources.com.au ASX Announcement 9 June 2020 METALLURGY NEXT STEPS The Company intends to implement recommendations provided by Mintrex for a detailed metallurgical testwork program testing both transitional and fresh ore types of high and low gold grade domains. Testwork will consist of comminution (including High Pressure Grinding Roll), gravity, grind establishment and leaching characteristics to provide detailed inputs for future plant design during scoping or feasibility studies. This work is expected to commence during Q4 CY2020. Authorised by the Board of Tesoro Resources Limited. For more information: Company: Zeff Reeves Managing Director Tesoro Resources Limited +61 8 9322 1587 Investors: Peter Taylor NWR Communications +61 (0) 412 036 231 peter@nwrcommunications.com.au About Tesoro Tesoro Resources Limited was established with a strategy of acquiring, exploring and developing mining projects in the Coastal Cordillera region of Chile. The Coastal Cordillera region is host to multiple world class copper and gold mines, has well established infrastructure, service providers and an experienced mining workforce. Large areas of the Coastal Cordillera remain unexplored due to the unconsolidated nature of mining concession ownership, but Tesoro, via its in-country network and experience has been able secure rights to a district scale gold project in-line with the Company’s strategy. Tesoro has rights to acquire up to 80% of the El Zorro Gold Project. Future Performance This announcement may contain certain forward-looking statements and opinion. Forward-looking statements, including projections, forecasts and estimates, are provided as a general guide only and should not be relied on as an indication or guarantee of future performance and involve known and unknown risks, uncertainties, assumptions, contingencies and other important factors, many of which are outside the control of the Company and which are subject to change without notice and could cause the actual results, performance or achievements of the Company to be materially different from the future results, performance or achievements expressed or implied by such statements. Past performance is not necessarily a guide to future performance and no representation or warranty is made as to the likelihood of achievement or reasonableness of any forward looking statements or other forecast. Nothing contained in this announcement nor any information made available to you is, or and shall be relied upon as, a promise, representation, warranty or guarantee as to the past, present or the future performance of Tesoro. 5 +61 8 9322 1587 | info@tesororesources.com.au | Suite 5, 62 Ord Street, West Perth WA 6005 | www.tesororesources.com.au