Thank you very much, Jessica. Thank you for all attending. It's only our second time here for Tesoro Gold, so we're still a relatively new story in this part of the world. My name's Geoff McNamara. I'm Co-Founder and N on-Exec Director, and I seeded the company with AUD 1 million of my own money about seven years ago. There's a few truly unique things about this deposit. So it's the first intrusive-related gold system discovered in Chile. We have a district-scale land position, so we have 570 sq km of tenure. And the other unique thing is location, location, location. We are not at altitude. On average, we're about 400 m above sea level. Highest point on the project is 900 m.
It is a one-hour flight to the Atacama International Airport from Santiago and then a one-hour drive along the Pan-American Highway, the national highway in the country, to the project. We have grid power 20 km away. We have a desalination plant 30 km away. We've just announced MOUs on both the water and the power. By the end of this year, we'll have locked in agreements. The owners of that infrastructure are CAP, so you can see our concessions there in the red. CAP is just to the south with the Cerro Negro Norte mine. They are the only user of their desalination plant. All of our metallurgical test work has been done with seawater. So we will be taking the wastewater from that desalination plant and using it for our processing water. The MOU will move to a finalized agreement at the end of the year.
What we're currently discussing is that CAP has indicated they'd be amenable to building the pipeline and the pumping station, and we would basically pay for the delivery of the water, so an option there to take some capital out of the construction CapEx. With the grid power, that line is 20 km away. That is actually sourced from a series of solar arrays in the north. The cost of the power will be $0.12 per kWh. And again, the infrastructure owner has indicated that they'll be amenable to building the substation and the power line into site, so we'll have both water and power locked in by the end of the year, water obviously being the biggest risk in Chile. A quick geology lesson, very simple one on Chile. Obviously, it's a very long, skinny country, and there's basically three geological belts.
The most eastern belt is the Andes, where you get the epithermal gold and silver deposits, and typically underneath that, the porphyry coppers. In the center, you have the Atacama Fault Zone, and that's where you get the IOCGs and the mantos. We're in the Coastal Cordillera. As I mentioned, we targeted that area specifically because of that location, because of the infrastructure, and because you're not at altitude. What we identified early on geologically is there are big, large northwest structures coming out of the Atacama Fault Zone. What we've identified is a north-south fault, nearly vertical, that runs for 50 to 60 km. Where that fault is intersected by the northwest cross-cutting structures, that's where the tonalite intrusive had come up. This intrusive is quite interesting.
There's been multiple pulses or multiple events with this intrusive over tens of millions of years over a very broad temperature range. Hence, this is a very well-mineralized system. Our largest shareholder, Gold Fields, is up there in the northeast with Salares Norte. We've just released a scoping study which assumes a capital cost of approximately $250 million. Salares Norte will produce 350,000 ounces over a decade. You could build, and that costs $1 billion to build because they're at 4,500 meters. You could build the same-scale project we are, where we are, for less than $500 million. So very significant advantages for our business being in this location. This image, we're looking to the west, so you can see the clouds. That's basically the Pacific Ocean. The disturbance in the foreground, that ridge, that is a Ternera deposit.
Ternera at this point is 2 million ounces. It's 1.3 kilometers long, up to 600 meters wide, and open at 600 meters deep. When we put that 2 million ounces in a pit-constrained $3,000 shell, we get 1.82 million ounces, and that's what we've done our scoping study on. You can see the valley there, so that's the valley we drive up. The higher ridge across called Drone Hill, that's the highest point on the property, approximately 700 meters away. We've drilled a series of holes into Drone Hill. The best result from there is 2 meters at 77 grams per ton. We've also drilled holes between Ternera and Drone Hill in the valley. We know the valley is mineralized. We know now that Drone Hill is mineralized. We see potential here if we can link Ternera to Drone Hill for 5 million ounces in a single deposit.
Every junior company who gets up here tells you they've got potential for 5 million ounces. I think the simplest way to help people understand that and what gives us faith in it is to look at some of the intercepts we've had. We've had over 3,500 gram-meter holes. All of our drilling is diamond core. We've drilled about 140,000 meters or 14 kilometers of diamond core in over 300 holes. Two things to note about this. Obviously, it's a big, well-mineralized system. Typically, we're intercepting anything from 400 meters at a gram to 50 meters at a gram. But within those intercepts, you're getting another nice, continuous, high-grade, higher-grade intercept, and we see that throughout the system. For example, that 434 meters at 1.2. There's another 20 meters at just under 10 grams within that. You can see that throughout the intercepts.
Hole 4 there, 231 at 0.8, including 6.7 and 11 grams. So you can see from those grades that this will have potential to go underground later in life. Importantly, if we look at the last two holes there, Z338, that's the 1.8 meters at 77 I mentioned at Drone Hill. So that's over 700 meters away from the existing resource. And hole 351, number 15, that 58 at 2, including 7 at 12, that's 500 meters to the south of the existing resource. So we've got a 3 million ounce exploration target on this. We'll grow to 3 million ounces by simply extending to the pit, to the north, the south, the east, and the west. As I mentioned, if we can link the pit to Drone Hill in the west, there's a clear pathway to 5 million ounces.
We believe this is probably the most prospective gold project in Chile. We've got 570 sq km of tenure. The constrained MRE, as I mentioned, is 1.82 million ounces, with 62% of that indicated. I've touched on the metallurgical test results, but at 150 micron grind size, we get 41% of the gold out in gravity. Total recovery is 95% by conventional CIP. So this is a nice, very simple project. We released a scoping study yesterday using a base case gold price of $2,750 at a 7.5% discount. Post-tax, we generate $663 million, and that's at an all-in sustaining cost of $1,216. If you lift that to $3,500, obviously the NPV is in excess of $1 billion. So on this image here, you can see the red outline. That's a 30-plus km gold corridor up to 5 km wide in some areas.
So what I mean by a gold corridor is there's continuous anomalous outcropping gold along that entire 30 kilometers. You can see Ternera is the red dot. The red circles are our high-priority targets. We will be drilling Breyer in the north in approximately two weeks' time. We'll be drilling as well as Breyer. We'll also be drilling Calderillas and Kitsune. We have done some reconnaissance drilling at Kitsune. The best result we had there was 20 meters at 0.5 grams, including 7 meters at 1.5 grams per ton. So that's a reasonable intercept, but we're not quite in the best part of the system. So our strategy is to continue to grow Ternera to 3 million ounces and then a pathway to 5 million ounces. At the same time, continue with our studies, pre-feasibility study due mid-2026.
Lock in the water and power by the end of this year, and we'll be fully permitted in 18 months. The third prong of that strategy is to drill our regional targets aggressively starting in two weeks' time. Cap structure. So we're trading at about AUD 0.05 now. Market cap of AUD 100 million, AUD 7.5 million in the bank. Largest shareholder, Gold Fields. Also on the register is Collins Street, an Australian fund, Ruffer, Ixios, Konwave, RAB Capital. We have AUD 7.5 million in the bank, so we'll be looking to go back to the market early next year. We'll obviously have continuous news flow with at least two rigs operating 24/7 on site. Mark Connelly recently joined the board as independent non-exec chairman. He's had some success in West Africa. Zeph Reeves and I co-founded the business along with Sergio Uribe.
Sergio's a Chilean national and our country manager, a real differentiator for us operating in country. We've recently added Tim Williams as a project director and a full-time CFO, so we're beefing up our team as we move towards permitting and construction. So there's the optimized pit shell and the existing resource. So that's coming together nicely, but as I mentioned, it's open in all directions and it's still open at depth. One of the areas we're going to grow the project in, this slide represents that quite easily. You can see the orientation of the ore body sitting here dipping to the east. You can see the pit shell. Out further to the east, there's an upthrusted fault. So that mineralization, the deeper mineralization has now been upthrust and sits at the surface out in the east.
So you can see from that pit shell, clearly the pit is going to move in the order of 700 meters to a kilometer to the east. So lots of latitude to grow this project. A quick summary of the scoping study, which I've already touched on, but 51% IRR, $663 million NPV at $2,750 gold price. Again, 7.5% discount rate post-tax. And as I mentioned, at $3,500, you're just at over $1 billion. Payback 20 months at $2,750. I've touched on the recoveries quick shot of the flow sheet. Simple, conventional CIP. So nice, simple, straightforward project. There's the site layout based on that scoping study. So the focus for the remainder of the year, not only continue to grow Ternera, but as I mentioned, it's going to be making new discoveries in that 30-kilometer gold corridor.
We did a magnetotellurics survey, and that confirmed for us our known targets and Ternera, but interestingly highlighted a very large target directly south of Ternera. So we'll continue to work these targets up, but we'll be drilling all these targets over the next 12 to 18 months. Again, we're getting very confident of making a discovery. What's interesting geologically is out to the west of Drone Hill, there's a very large pluton or a granodiorite. We believe the source of the mineralization sits on the edge of that. And part of the reason we're going to Breyer next is because when you look at this slide, you can see that white circular feature in the middle of the image there. So we believe that's another pluton. And you've got those northwest structures coming across there as well. That second structure is four kilometers long by 200 meters wide.
And you can see from our rock chips and our channels that there's some pretty attractive grades in this area. So as I mentioned, we'll be up there drilling that very shortly.
Geoff, just give you a 30-second warning there.
Excellent timing. Thank you, Jessica.
Thank you very much. You can close off if you want.