Tristar SHORT PROSPECTUS

A copy of this preliminary short form prospectus has been filed with the securities regulatory authorities in the Provinces of British Columbia, Alberta, Ontario and Nova Scotia, but has not yet become final for the purpose of the sale of securities. Information contained in this preliminary short form prospectus may not be complete and may have to be amended. The securities may not be sold until a receipt for the short form prospectus is obtained from the securities regulatory authorities.
No securities regulatory authority has expressed an opinion about these securities and it is an offence to claim otherwise. This short form prospectus constitutes a public offering of these securities only in those jurisdictions where they may be lawfully offered for sale and therein only by persons permitted to sell such securities.
These securities have not been and will not be registered under the United States Securities Act of 1933, as amended, (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold within the United States or to, or for the account or benefit of, a U.S. person or person in the United States unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from registration is available. “United States” and “U.S. person” are as defined in Regulation S under the U.S. Securities Act. This short form prospectus does not constitute an offer to sell or a solicitation of an offer to buy any of the securities offered hereby within the United States. See “Plan of Distribution”.
Information has been incorporated by reference in this short form prospectus from documents filed with securities commissions or similar authorities in Canada. Copies of the documents incorporated herein by reference may be obtained on request without charge from TriStar Gold Inc. at our registered and records office at Suite 910, 800 West Pender Street, Vancouver, British Columbia, V6C 2V6, and are also available electronically at http://www.sedar.com.

PRELIMINARY SHORT FORM PROSPECTUS
New Issue June 26, 2020

TRISTAR GOLD INC.
$8,010,000 26,700,000 Units

This preliminary short form prospectus (the “Prospectus”) qualifies the distribution (the “Offering”) of 26,700,000 units (the “Units”) of TriStar Gold Inc. (“TriStar” or the “Corporation”) at a price of $0.30 per Unit (the “Offering Price”). Each Unit consists of one common share (“Common Share”) in the capital of the Corporation (each, a “Unit Share”) and one-half of one common share purchase warrant (each whole common share purchase warrant, a “Warrant”). Each Warrant shall entitle the holder thereof to acquire one Common Share (each a “Warrant Share”) at an exercise price of $0.40 per Warrant Share, subject to adjustment in certain circumstances, for a period of 24 months following closing of the Offering (the “Closing Date”). The Warrants will be governed by a warrant indenture (the “Warrant Indenture”) to be entered into on or before the Closing Date between the Corporation and Computershare Trust Company of Canada (the “Warrant Agent”), as warrant agent. See “Description of the Securities Being Offered”. The Offering Price was determined based upon arm’s length negotiations between the Corporation and the Underwriters in the context of the market price of the Common Shares on the TSX Venture Exchange (the “Exchange”). See “Plan of Distribution”.

The Units are to be issued pursuant to an underwriting agreement (the “Underwriting Agreement”) dated June 26, 2020 between the Corporation and Cormark Securities Inc., as lead underwriter, and Red Cloud Securities Inc. and Canaccord Genuity Corp. (collectively, the “Underwriters”).

The Common Shares are listed and posted for trading on the Exchange under the symbol “TSG” and are quoted on the OTCQB under the symbol “TSGZF”. On June 19, 2020, the last full trading day prior to the announcement of the Offering, the closing price of the Common Shares on the Exchange was $0.34 and on the OTCQB was US$0.24. On June 25, 2020, the last trading day prior to the filing of this Prospectus, the closing price of the Common Shares on the Exchange was $0.33 and on the OTCQB was US$0.25. The Corporation has applied to list the Unit Shares and the Warrant Shares on the Exchange. Listing will be subject to the Corporation fulfilling all of the listing requirements of the Exchange. There is currently no market through which the Warrants may be sold, the Warrants will not be listed for trading on the Exchange or any other stock exchange following the Closing Date and purchasers may not be able to resell the Warrants purchased under this Prospectus. See “Risk Factors”.

Price: $0.30 per Unit
Price to the Public Underwriters’ Commission(1) Net Proceeds to the Corporation(2)(3)
Per Unit $0.30 $0.018 $0.282
Total $8,010,000 $480,600 $7,529,400

⦁ Pursuant to the Underwriting Agreement, the Corporation has agreed to pay to the Underwriters a fee (the “Underwriting Commission”) representing (i) 6% of the aggregate gross proceeds of the Offering (including any gross proceeds raised on the exercise of the Underwriters’ Option (as defined below)), other than the gross proceeds, subject to a maximum of $2,000,000, raised from the sales of Units to purchasers on a president’s list provided by the Corporation to the Underwriters (the “President’s List”) under the Offering, and (ii) 3% of the gross proceeds raised from the President’s List sales.
⦁ After deducting the Underwriters’ Commission, but before deducting expenses of the Offering (estimated to be approximately $250,000), which will be paid from the gross proceeds of the Offering, the net proceeds to the Corporation will be $7,529,400 (prior to giving effect to the exercise of the Underwriters’ Option (as defined below)).
⦁ TriStar has granted to the Underwriters an over-allotment option (the “Underwriters’ Option”), exercisable in whole or in part at any time until noon (Vancouver time) on or before the 30th day following the Closing Date to purchase up to an additional 4,005,000 Units (the “Additional Units”) at the Offering Price to cover the Underwriters’ over-allotment position, if any, and for market stabilization purposes. If the Underwriters’ Option is exercised in full, the total “Price to the Public”, “Underwriters’ Commission” and “Net Proceeds to the Corporation” (before deducting expenses of the Offering and assuming no President’s List sales) will be $9,211,500, $552,690 and $8,658,810, respectively.

This Prospectus qualifies the grant of the Underwriters’ Option and the distribution of the Additional Units issuable upon exercise of the Underwriters’ Option. A purchaser who acquires Additional Units forming part of the Underwriters’ over- allocation position acquires those Additional Units under this Prospectus, regardless of whether the over-allocation position is ultimately filled through the exercise of the Underwriters’ Option or secondary market purchases. See “Plan of Distribution”.

The following table sets forth the maximum number of Additional Units issuable under the Underwriters’ Option:

Underwriters’ Position Maximum Size Exercise Period Exercise Price
Underwriters’ Option 4,005,000 Additional Units Up to 30 days from and including the Closing Date $0.30 per Additional Unit

An investment in the Units is highly speculative and involves significant risks that should be carefully considered by prospective investors before purchasing such securities. The risks outlined in this Prospectus and in the documents incorporated by reference herein should be carefully reviewed and considered by prospective investors in connection with an investment in such securities. See “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements”.

Prospective purchasers are advised to consult their own tax advisors regarding the application of Canadian federal income tax laws to their particular circumstances, as well as any other provincial, foreign and other tax consequences of acquiring, holding or disposing of the Units, including the Canadian federal income tax consequences applicable to a foreign controlled Canadian corporation that acquires the Units.

Subject to applicable laws, the Underwriters may, in connection with the Offering, effect transactions intended to stabilize or maintain the market price of the Common Shares at levels other than those which might otherwise prevail in the open market. Such transactions, if commenced, may be discontinued at any time. The Underwriters may offer the Units at a lower price than stated above. See “Plan of Distribution”.

The Underwriters, as principals, conditionally offer the Units, subject to prior sale, if, as and when issued by the Corporation and accepted by the Underwriters in accordance with the terms and conditions contained in the Underwriting Agreement referred to under “Plan of Distribution”, and subject to approval of certain legal matters on behalf of TriStar by Maxis Law Corporation and on behalf of the Underwriters by Fasken Martineau DuMoulin LLP.

Subscriptions for Units will be received by the Underwriters subject to rejection or allotment in whole or in part and the right is reserved to close the subscription books at any time without notice. It is expected that the Closing Date will occur on or about July 14, 2020, or on such other date as may be agreed upon by the Corporation and the Underwriters, and, in any event, on or before a date not later than 42 days after the date of the receipt for the final short form prospectus. The Units are to be taken up by the Underwriters, if at all, on or before a date that is not less than 42 days after the date of the receipt for the final short form prospectus. See “Plan of Distribution”.

The Underwriters propose to offer the Units initially at the Offering Price. After the Underwriters have made reasonable efforts to sell all of the Units offered by this short form prospectus at such price, the Offering Price may be decreased, and further changed from time to time, to an amount not greater than the Offering Price and the compensation realized by the Underwriters will be decreased by the amount that the aggregate price paid by purchasers for the Units is less than the gross proceeds to be paid by the Underwriters to the Corporation. Any reduction to the Offering Price will not affect the net proceeds received by the Corporation. See “Plan of Distribution”.

It is expected that the Corporation will arrange for the instant deposit of the Unit Shares and Warrants comprising the Units under the book-based system through CDS Clearing and Depository Services Inc. (“CDS”) or its nominee and deposited in electronic form, or will otherwise be delivered to the Underwriters registered as directed by the Underwriters, on the Closing Date. Except in limited circumstances, a purchaser of Units will receive only a customer confirmation from the registered dealer from or through which the Units are purchased and who is a CDS depository service participant. Notwithstanding the foregoing, any Units, Unit Shares or Warrants sold in the United States or to, or for the account or benefit of, a U.S. person or person in the United States may be represented by individual certificates and not deposited with CDS. See “Plan of Distribution”.

The Corporation’s head office is located at Suite 209, 7950 East Acoma Drive Scottsdale, Arizona 85260 and registered office is located at Suite 910, 800 West Pender Street, Vancouver, British Columbia, V6C 2V6.

TABLE OF CONTENTS

DESCRIPTION PAGE NO.

CERTIFICATE OF THE CORPORATION …………………………………………………………………………………………………………. C-1
CERTIFICATE OF THE UNDERWRITERS………………………………………………………………………………………………………. C-2

ABOUT THIS PROSPECTUS

Prospective investors should rely only on information contained in this Prospectus (including the documents incorporated by reference herein) and are not entitled to rely on parts of the information contained in this Prospectus (including the documents incorporated by reference herein) to the exclusion of others. Neither the Corporation nor the Underwriters has authorized anyone to provide the reader with different information. The Corporation is not making an offer of the Units in any jurisdiction where such offer is not permitted. The information contained in this Prospectus (including the documents incorporated by reference herein) is accurate only as of the date of this Prospectus (or the date of the documents incorporated by reference herein, as applicable), regardless of the time of delivery of this Prospectus or any sale of the Units. The Corporation’s business, financial condition, results of operations and prospects may have changed since the date of this Prospectus. The Corporation does not undertake to update the information contained or incorporated by reference herein, except as required by applicable securities laws.

Market data and certain industry forecasts used in this Prospectus and the documents incorporated by reference herein were obtained from market research, publicly available information and industry publications. We believe that these sources are generally reliable, but the accuracy and completeness of this information is not guaranteed. We have not independently verified such information, and we do not make any representation as to the accuracy of such information.

The Corporation’s Annual Financial Statements (as defined below) and Interim Financial Statements (as defined below) that are incorporated by reference into this Prospectus have been prepared in accordance with International Financial Reporting Standards, as issued by the International Accounting Standards Board and are reported in United States dollars.

MEANING OF CERTAIN REFERENCES

Except where otherwise indicated, all references to dollar amounts and “$” are to Canadian currency and the “Corporation” or “TriStar” refers to TriStar Gold Inc. and its subsidiary entities on a consolidated basis and, in the case of references to matters undertaken by a predecessor in interest to the Corporation or its subsidiary entities, includes each such predecessor in interest, unless the context otherwise requires. Any statements in this Prospectus made by or on behalf of management are made in such persons’ capacities as officers of the Corporation and not in their personal capacities.

Unless the context otherwise requires, when used herein, all references to the “Offering” include the exercise of the Underwriters’ Option and all references to “Units” include the Additional Units issuable upon exercise of the Underwriters’ Option.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Prospectus, including the documents incorporated by reference herein, contains “forward-looking information” under applicable Canadian securities legislation. Forward-looking information is characterized by words such as “plan”, “expect”, “budget”, “target”, “project”, “intend”, “believe”, “anticipate”, “estimate”, “should”, “predict”, “potential”, “continue” and other similar words, or statements that certain events or conditions “may” or “will” occur. Statements relating to mineral resource and mineral reserve estimates are deemed to be forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the mineral resources described and mineral reserves exist in the quantities predicted or estimated or that it will be commercially viable to produce any portion of such resources. Except for statements of historical fact relating to the Corporation, information contained or incorporated by reference herein constitutes forward- looking information, including, but not limited to, statements regarding the expected Closing Date; the planned use of proceeds from the Offering; the Corporation’s business plans and objectives; the Corporation’s strategy, plans or future financial or operating performance; and the result of any of the Corporation’s work programs or other exploration activities in relation to any of its properties.

Statements containing forward-looking information are based upon certain material assumptions that were applied in drawing a conclusion or making a forecast or projection, including management’s perceptions of historical trends, current conditions and expected future developments, as well as other considerations that are believed to be appropriate in the circumstances, including the following: the Corporation will be able to obtain additional financing on reasonable terms or at all; the Corporation will be able to recruit and retain the services of its key technical and management personnel; the Corporation’s management will not identify and pursue other business objectives following the Offering; the Corporation will be able to obtain all required regulatory approvals without undue delay or subject to excessively burdensome conditions; the Underwriters and the investors under the Offering will be willing and able to fulfil their obligations in connection with the Offering; the results of current exploration activities will be favourable; the price of minerals will remain sufficiently high and the costs of advancing the

Corporation’s projects sufficiently low so as to permit it to successfully implement its business plans; and that the risks referenced in the list below and in the section entitled “Risk Factors”, collectively, will not have a material impact on the Corporation. While management considers these assumptions to be reasonable based on currently available information, they may prove to be incorrect.

By their nature, forward-looking statements are inherently uncertain, are subject to risk and are based on assumptions including those discussed herein and those discussed in the documents incorporated by reference herein. There is significant risk that predictions and other forward-looking statements will not prove to be accurate. Readers are cautioned to not place undue reliance on forward-looking statements made herein because a number of factors could cause actual future results, conditions, actions or events to differ materially from the targets, expectations, estimates or intentions expressed in the forward-looking statements. The forward-looking statements contained herein are expressly qualified in their entirety by the above cautionary statements.

The future outcomes that relate to forward-looking statements may be influenced by many factors, including, but not limited to:

⦁ the Corporation’s lack of income from operations;
⦁ availability of additional financing as and when required;
⦁ uncertainty in the estimation of mineral reserves and resources;
⦁ uncertainty relating to inferred mineral resources;
⦁ uncertainty relating to exploration targets;
⦁ fluctuations in mineral prices, and in particular fluctuations in the price of gold;
⦁ insurance and uninsured risks;
⦁ community relations;
⦁ risks related to dilution;
⦁ the uncertainties and risks inherent to the exploration, development and production of the Corporation’s properties;
⦁ the public health crisis and the ongoing impact of COVID-19 on the Corporation and its ability to conduct operations on TriStar’s Castelo de Sonhos Property (the “Project”);
⦁ increased costs and physical risks relating to climate change, including extreme weather events, and new or revised
regulations relating to climate change;
⦁ risks relating to the market for minerals;
⦁ shortage of equipment and materials;
⦁ environmental, health and safety regulations;
⦁ environmental hazards, industrial accidents, floods, fires, and other hazards involved in mineral exploration;
⦁ dependence on management;
⦁ governmental action, decrees and regulations, including those related to COVID-19;
⦁ risks relating to permits and licences;
⦁ risks relating to title to the Corporation’s properties;
⦁ volatility of the market price for TriStar’s securities;
⦁ competition;
⦁ risks related to third party contractors;
⦁ conflicts of interest;
⦁ risks related to the required expenditures in connection with TriStar’s Project;
⦁ the Corporation’s discretion in the use of proceeds of the Offering;
⦁ risks relating to the Corporation’s negative operating cash flow, including the need for future sales or issuances of securities of the Corporation;
⦁ risks relating to an investment in the Units; and
⦁ potential adverse Canadian tax consequences.

Additionally, see “Risk Factors” in this Prospectus and in the documents incorporated by reference herein.

The Corporation cautions that the foregoing list of factors is not exhaustive, and that, when relying on forward-looking statements to make decisions with respect to the Corporation or the Units, investors and others should carefully consider these factors, as well as other uncertainties and potential events, and the inherent uncertainty of forward-looking statements.

Although the Corporation has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. Such information is based on numerous assumptions regarding present and future business conditions. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward- looking statements. Forward-looking statements are provided as of the date of this Prospectus or such other date specified herein, and the Corporation assumes no obligation to update or revise such forward-looking statements to reflect new events or circumstances except as required under applicable securities laws.

CAUTIONARY NOTE REGARDING MINERAL RESERVE AND MINERAL RESOURCE ESTIMATES

Unless otherwise indicated, all mineral reserve and mineral resource estimates included in this Prospectus and the documents incorporated by reference herein have been prepared in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) and the Canadian Institute of Mining, Metallurgy and Petroleum (the “CIM”) – CIM Definition Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council on May 19, 2014, as amended (the “CIM Standards”). NI 43-101 is a rule developed by the Canadian Securities Administrators, which established standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects. The terms “mineral reserve”, “proven mineral reserve” and “probable mineral reserve” are Canadian mining terms as defined in accordance with NI 43-101 and the CIM Standards. In addition, the terms “mineral resource”, “measured mineral resource”, “indicated mineral resource” and “inferred mineral resource” are defined in accordance with NI 43-101 and the CIM Standards. Investors are cautioned not to assume that all or any part of mineral deposits in these categories will ever be converted into mineral reserves. “Inferred mineral resources” are estimated on the basis of limited geological evidence and sampling, and therefore have a greater amount of uncertainty as to their existence, and greater uncertainty as to their economic and legal feasibility, as compared with measured or indicated resources. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or prefeasibility studies, except in very limited circumstances. Investors are cautioned not to assume that all or any part of an inferred mineral resource is economically or legally mineable.

The mineral resource and mineral reserve figures referred to in this Prospectus and the documents incorporated therein by reference are estimates and no assurances can be given that the indicated levels of gold will be produced. Such estimates are expressions of judgment based on knowledge, mining experience, analysis of drilling results and industry practices. Valid estimates made at a given time may significantly change when new information becomes available. By their nature, mineral resource and mineral reserve estimates are imprecise and depend, to a certain extent, upon statistical inferences which may ultimately prove unreliable. Any inaccuracy or future reduction in such estimates could have a material adverse impact on the Corporation.

In this Prospectus, and the documents incorporated by reference herein, the terms “mineral resources”, “mineral reserves”, “indicated mineral resources” and “inferred mineral resources” are defined in accordance with CIM Standards. In particular:

⦁ a “mineral resource” is a concentration or occurrence of solid material of economic interest in or on the earth’s crust in such form, grade or quality and quantity that there are reasonable prospects for eventual economic extraction;

⦁ a “mineral reserve” is the economically mineable part of a measured and/or indicated mineral resource. It includes diluting materials and allowances for losses, which may occur when the material is mined or extracted and is defined by studies at prefeasibility or feasibility level as appropriate that include application of modifying factors. Such studies demonstrate that, at the time of reporting, extraction could reasonably be justified;

⦁ an “inferred mineral resource” is that part of a mineral resource for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. Geological evidence is sufficient to imply but not verify geological and grade or quality continuity. An inferred mineral resource has a lower level of confidence than that applying to an indicated mineral resource and must not be converted to a mineral reserve. It is reasonably expected that the majority of inferred mineral resources could be upgraded to indicated mineral resources with continued exploration; and

⦁ an “indicated mineral resource” is that part of a mineral resource for which quantity, grade or quality, densities, shape and physical characteristics are estimated with sufficient confidence to allow the application of modifying factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit. Geological evidence is derived from adequately detailed and reliable exploration, sampling and testing and is sufficient to assume geological and grade or quality continuity between points of observation.

ELIGIBILITY FOR INVESTMENT

In the opinion of Thorsteinssons LLP, special Canadian tax counsel to the Corporation, and Fasken Martineau DuMoulin LLP, counsel to the Underwriters, based on the provisions of the Income Tax Act (Canada) and the regulations thereunder (collectively the “Tax Act”) in force on the date hereof, the Unit Shares, the Warrants and the Warrant Shares, if issued on the date hereof, would be “qualified investments” under the Tax Act for a trust governed by a registered retirement savings plan (“RRSP”), registered retirement income fund (“RRIF”), deferred profit sharing plan, registered education savings plan (“RESP”), registered disability savings plan (“RDSP”) and tax-free savings account (“TFSA”) (collectively, “Deferred Plans”) provided that (i) the commons shares of the Corporation are listed on a “designated stock exchange” as defined in the Tax Act (which currently includes Tiers 1 and 2 of the Exchange), and (ii) in the case of the Warrants, neither the Corporation, nor any person with whom the Corporation does not deal at arm’s length, is an annuitant, a beneficiary, an employer or a subscriber under, or a holder of the particular Deferred Plan.

Notwithstanding that the Unit Shares, Warrants and Warrant Shares may be a “qualified investment” for a Deferred Plan, the annuitant under an RRSP or RRIF, the holder of a TFSA or RDSP, or the subscriber of an RESP will be subject to a penalty tax if such Unit Shares, Warrants and Warrant Shares are a “prohibited investment” (as defined in the Tax Act) for the RRSP, RRIF, RESP, RDSP or TFSA. The Unit Shares, Warrants and Warrant Shares will generally not be a “prohibited investment” for a particular RRSP, RRIF, RESP, RDSP or TFSA provided that the annuitant under the RRSP or RRIF, the holder of the TFSA or RDSP, or the subscriber of the RESP, as the case may be, deals at arm’s length with the Corporation for purposes of the Tax Act and does not have a “significant interest” (as defined in the Tax Act) in the Corporation. In addition, the Unit Shares and Warrant Shares will not be a prohibited investment if such securities are “excluded property” (as defined in the Tax Act for purposes of these rules) for the particular TFSA, RRSP, RESP, RDSP or RRIF.

Persons who intend to hold Unit Shares, Warrants and Warrant Shares in a trust governed by a Deferred Plan should consult their own tax advisors with respect to the application of these rules in their particular circumstances.

DOCUMENTS INCORPORATED BY REFERENCE

Information has been incorporated by reference in this Prospectus from documents filed with securities commissions or similar authorities in Canada. Copies of the documents incorporated herein by reference may be obtained on request without charge from the Corporation, at its registered office at Suite 910, 800 West Pender Street, British Columbia, V6C 2V6, or by telephone at (604) 685-6100, and are also available electronically at http://www.sedar.com.

Except to the extent that their contents are modified or superseded by a statement contained in this Prospectus or in any other subsequently filed document that is also incorporated by reference herein, the following documents of the Corporation, which have been filed with securities commissions or similar authorities in Canada, are specifically incorporated by reference into and form an integral part of this Prospectus:

⦁ the annual information form of the Corporation dated April 27, 2020 for the year ended December 31, 2019 (the “AIF”);
⦁ the audited consolidated financial statements of the Corporation for the years ended December 31, 2019 and December 31, 2018, together with their respective auditor’s report and the notes thereto (the “Annual Financial Statements”);

⦁ the management’s discussion and analysis of the Corporation for the year ended December 31, 2019;

⦁ the condensed consolidated interim financial statements for the three month periods ended March 31, 2020 and March 31, 2019 and the notes attached thereto, except for the notice of no audit review in respect thereof (the “Interim Financial Statements”);

⦁ the management’s discussion and analysis of the Corporation for the three month period ended March 31, 2020;
⦁ management information circular of the Corporation dated as of October 3, 2019 with respect to the annual general meeting of shareholder held on November 7, 2019;

⦁ the material change report of the Corporation dated June 23, 2020 with respect to the announcement of the Offering; and

⦁ the “template version” (as such term is defined in National Instrument 41-101 – General Prospectus Requirements) of the term sheet for the Offering.

Any document of the type required to be incorporated into the short form prospectus by item 11.1 of Form 44-101F1 – Short Form Prospectus filed by the Corporation, after the date of this Prospectus and prior to the termination of the Offering, shall be deemed to be incorporated by reference in and form an integral part of this Prospectus. The documents incorporated or deemed to be incorporated by reference in this Prospectus contain meaningful and material information relating to the Corporation, and prospective investors should review all information contained in this Prospectus and the documents incorporated by reference in this Prospectus before making an investment decision.

Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for the purposes of this Prospectus to the extent that a statement contained herein or in any other subsequently filed document which is also, or is deemed to be, incorporated by reference herein modifies or supersedes such statement. The modifying or superseding statement need not state that it has modified or superseded a prior statement or include any other information set forth in the document that it modifies or supersedes. The making of a modifying or superseding statement shall not be deemed to be an admission for any purposes that the modified or superseded statement, when made, constituted a misrepresentation, an untrue statement of material fact or an omission to state a material fact that is required to be stated or that is necessary to make a statement not misleading in light of the circumstances in which it was made. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus.

MARKETING MATERIALS

Any “template version” of “marketing materials” (as such terms are defined in National Instrument 41-101 – General Prospectus Requirements) will be incorporated by reference into the (final) short form prospectus. However, any such template version of marketing materials will not form part of the (final) short form prospectus to the extent that the contents of the template version of marketing materials are modified or superseded by a statement contained in the (final) short form prospectus. Any template version of marketing materials filed on SEDAR after the date of the (final) short form prospectus and before the termination of the distribution under the Offering will be deemed to be incorporated into the (final) short form prospectus.

THE CORPORATION

Incorporation

TriStar was incorporated on May 21, 2010 under the Business Corporations Act of British Columbia (the “BCBCA”) as a wholly owned subsidiary of Brazauro Resources Corporation (“Brazauro”). On July 20, 2010 Brazauro and Eldorado Gold Corporation (“Eldorado”) completed a plan of arrangement whereby Eldorado acquired all of the issued and outstanding common shares of Brazauro not already held by Eldorado. Pursuant to the plan of arrangement, Brazauro transferred certain mineral exploration assets, and cash to TriStar, and the common shares of TriStar were distributed to the shareholders of Brazauro.

The Corporation’s head office is located at 7950 E Acoma Drive, Suite 209, Scottsdale, Arizona, USA, 85260 and its registered office is located at Suite 910, 800 West Pender Street, Vancouver, British Columbia, Canada, V6C 2V6. The Corporation’s website is http://www.tristargold.com.

Intercorporate Relationships

TriStar is engaged in the exploration and development of precious metals deposits. Its principal exploration property is the Project located in Para State in northern Brazil. The Project is owned by an indirect Brazilian subsidiary, Mineracao Castelo Dos Sonhos Ltda., as illustrated in the corporate organizational chart below.

Summary Description of the Business

Since its incorporation in 2010, the Corporation’s activities have been primarily focused on exploring the Project in Para State in northern Brazil, which is a gold exploration property.

The Corporation has no mines in operation and no source of revenue from operating activities. The Project remains in the exploration stage and management anticipates that it will take several more years of additional drilling followed by work to be able to complete a feasibility study to make a formal decision to go into production.

This work includes, among other things, additional core and reverse circulation drilling, metallurgical test work respecting the optimal process or processes for the recovery of gold, preliminary engineering design and cost estimation, environmental impact and mitigation studies and if that is all successful obtaining the necessary permits and financing for the construction and operation of a mine. There can be no assurance that the Project will be placed into production.

With respect to the ownership of the Project, in July 2016, the Corporation made the final contractual cash and common share payments to complete the acquisition of the Project from the vendors, although certain production and bonus trigger payments may be required in future years. In addition, in accordance with Brazilian mining law, the Corporation must complete a number of steps to maintain the rights to mine the Project. Interested parties may contact the Corporation for the current status of all the claims comprising the Project.

Recent Developments

The following is a summary of recent developments involving the Corporation since April 27, 2020, being the date of the AIF:

⦁ On May 4, 2020, the Corporation released a press release announcing that delineation of upside drill targets outside the current resource base at the Project is advancing on schedule. Multiple near-surface mineralized conglomerate targets have been generated for future drill evaluation. Target delineation work has shifted to generating deeper

targets at the Project, which selection process anticipated to be completed by June, 2020. In addition, the Corporation announced that its infill reverse circulation drill program had completed.

⦁ On June 4, 2020, the Corporation released a press release announcing the receipt of assays from 79 infill drill holes for 7,428 metres of drilling for the prefeasibility study at the Project. In addition, the Corporation announced that the initial scope of target generation work by GoldSpot Discoveries (“GoldSpot”) outside of the prefeasibility study area remains on track for completion by the end of June, 2020.

For further information regarding the Corporation, see the AIF and other documents incorporated by reference in this Prospectus available under the Corporation’s profile at http://www.sedar.com.

Material Contracts

The Corporation has not entered into any material contracts, other than those contracts that have been filed under the Corporation’s profile at http://www.sedar.com.

CONSOLIDATED CAPITALIZATION

There have not been any material changes in the share and loan capital of the Corporation, on a consolidated basis, since March 31, 2020, the date of the Corporation’s most recently filed financial statements. The following table sets forth the consolidated capitalization of the Corporation as at March 31, 2020 and the pro forma consolidated capitalization of the Corporation as at March 31, 2020 adjusted to give effect to the Offering. The following table should be read in conjunction with the Interim Financial Statements and related management’s discussion and analysis, each of which is incorporated by reference into this Prospectus.

Security
Amount Authorized
As at March 31, 2020 Before Giving Effect to the Offering(1)(2)
As at March 31, 2020 After Giving Effect to the Offering(2) As at March 31, 2020 After Giving Effect to the Offering, Assuming Exercise of Underwriters’ Option in Full(2)
(unaudited) (unaudited) (unaudited)
Common Shares Unlimited $46,237,766
(193,204,440 Common Shares) $54,247,766
(219,904,440 Common Shares) $55,449,266
(223,909,440 Common Shares)

⦁ As at March 31, 2020, the Corporation had 13,060,000 incentive stock options, 36,655,147 common share purchase warrants and 702,046 agent compensation options outstanding that could result in the issuance of up to 13,060,000, 36,655,147 and 702,046 additional Common Shares, respectively.
⦁ Before deducting the Underwriters’ Commission and the expenses of the Offering.

USE OF PROCEEDS

The net proceeds received by the Corporation from the Offering (assuming no exercise of the Underwriters’ Option and no President’s List sales) will be $7,529,400 (determined after deducting the Underwriters’ Commission of $480,600 but before deducting expenses related to the Offering estimated at $250,000). If the Underwriters’ Option is exercised in full, the estimated net proceeds received by the Corporation from the Offering (assuming no President’s List sales) will be $8,658,810 (determined after deducting the Underwriters’ Commission of $480,600 but before deducting estimated expenses of the Offering of $250,000).

Source of Funds Approximate Amount
Gross Proceeds from the Offering $8,010,000
Less Underwriters’ Commission ($480,600)(1)
Less Estimated Expenses of the Offering ($250,000)
Total $7,279,400

⦁ Assuming no President’s List sales.

The Corporation intends to use these available funds over the 12 month period following closing of the Offering as indicated in the following table, with all references to exploration and related costs relating to the Project:

Use of Funds Approximate Amount ($)(1)
RC infill drilling 300,000
Core drilling 460,000
New target drilling 750,000
Metallurgical testing 6,667
Sample assay and freight 100,000
Camp and labour 635,250
Other Brazil costs 750,000
Televiewer 300,000
Resource estimation 80,000
NA consultants 170,000
Vendor payment 1,733,333
PFS preparation 1,270,000
Socio-economic studies 666,667
Working capital 57,483
Total 7,279,400
⦁ Assuming no exercise of the Underwriters’ Option. The net proceeds from the exercise of the Underwriters’ Option, if any, are expected to be used for general corporate and other working capital purposes.

Working capital may include routine operating and administrative expenses, capital expenditures, or exploration and development of mineral properties. While the Corporation intends to spend the funds available to it as stated above, there may be circumstances where, for sound business reasons, a reallocation of funds may be necessary or advisable. The actual amount that the Corporation spends in connection with each of the intended uses of proceeds may vary significantly from the amounts specified above and will depend on a number of factors, including those referred to under “Risk Factors”.

Until applied, the net proceeds will be held as cash balances in the Corporation’s bank account or invested in certificates of deposit and other instruments issued by banks or obligations of or guaranteed by the Government of Canada or any province thereof. Unallocated funds from the Offering will be added to the working capital of the Corporation, and will be expended at the discretion of management.

Business Objectives and Milestones

The Corporation’s key business objective is the advancement of the CDS Project through the completion of a preliminary feasibility study (“PFS”) that is compliant with NI 43-101. In order to complete the PFS, reverse circulation (“RC”) infill drilling must be completed in a 50 metre by 50 metre grid pattern covering the Esperança South resource area. It is anticipated that a minimum of 20,000 metres of reverse circulation drilling will be required, of which approximately 19,000 metres has already been completed, with the remaining infill RC drilling estimated to be completed by September 2020. Approximately 2,000 metres of core drilling is also planned, for both infill and geotechnical purposes, and is intended to be completed by December 2020. Following the completion of the infill drilling, an updated mineral resource estimate will be calculated and published in a new independent NI 43-101 technical report.

The updated resource estimate will then be used in the PFS, along with new metallurgical work, and operating and capital cost estimates to build and operate the Project. The PFS will then be published in an updated independent NI 43-101 technical report.

The Corporation will complete normal concession maintenance reports that include Plano de Aproveitamento Economico (the “Economic Utilization Plan”) for three concessions in or about September 2020 and for the main concession hosting most of the Project’s mineral resources, work will begin on both social and environmental baselines and the environmental impacts assessment (“EIA”). Investors are cautioned that the Economic Utilization Plan is not a determination of the economic viability of the Project in aggregate pursuant to Canadian disclosure standards. The Economic Utilization Plan is a filing under Brazilian laws that is necessary for the further development of the Project.

In addition to the work advancing in Esperança South, general exploration will continue on the remainder of the Project, to both delineate any additional near-surface conglomerate hosted gold as well as explore other potentially associated styles of gold mineralization. This exploration could include mapping, surface sampling, remote sensing or exploration RC or core drilling.

The Corporation had no source of revenue from operations and negative operating cash flow for its most recent financial year. Additional financing will be required to support the Corporation’s operating activities, as the Corporation plans to continue to expand its operations in the foreseeable future. To the extent the Corporation has negative cash flows in future periods, the Corporation may use a portion of its general working capital (including the proceeds of the Offering) to fund such negative cash flow. See “Risk Factors”.

PLAN OF DISTRIBUTION

Pursuant to the Underwriting Agreement, the Underwriters have agreed to purchase and the Corporation has agreed to sell, subject to compliance with all necessary legal requirements and pursuant to the terms and conditions of the Underwriting Agreement, on the Closing Date, all of the 26,700,000 Units at the Offering Price, payable in cash to the Corporation against delivery of the Units. The Offering Price was determined based upon arm’s length negotiations between the Corporation and the Underwriters in the context of the market price of the Common Shares on the Exchange.

The Corporation has granted to the Underwriters the Underwriters’ Option, exercisable in whole or in part at any time until noon (Vancouver time) on the 30th day following the Closing Date to cover over-allotments, if any, and for market stabilization purposes, to purchase Units of the Corporation in an amount representing up to 15% of the number of Units sold pursuant to the Offering, being up to 4,005,000 Additional Units at the Offering Price, to cover over-allocations, if any. The Underwriters’ Option may be exercised by the Underwriters to acquire up to 4,005,000 Additional Units at the Offering Price. This Prospectus qualifies the distribution of the Unit Shares and the Warrants comprising the Units, including the Additional Units issuable upon exercise of the Underwriters’ Option. A purchaser who acquires securities forming part of the Underwriters’ over-allocation position acquires those securities under this Prospectus, regardless of whether the over-allocation position is ultimately filled through the exercise of the Underwriters’ Option or secondary market purchases.

The obligations of the Underwriters under the Underwriting Agreement may be terminated at their discretion on the basis of “disaster out”, “material change out”, “litigation out” or “breach out” provisions in the Underwriting Agreement and may also be terminated upon the occurrence of certain other stated events. The Underwriters are, however, obligated to take up and pay for all of the Units offered hereby if any of such Units are purchased under the Underwriting Agreement. The Corporation has agreed to indemnify the Underwriters and their respective affiliates and each of the directors, officers, employees and shareholders of the Underwriters and their affiliates against certain liabilities pursuant to the Underwriting Agreement.

In consideration for the services rendered by the Underwriters in connection with the Offering, the Underwriters will be paid the Underwriters’ Commission equal to (i) 6% of the gross proceeds realized from the sale of the Units to purchasers not on the President’s List under the Offering, including the Additional Units, if any and (ii) 3% of the gross proceeds realized from the sale of Units to purchasers on the President’s List under the Offering, including Additional Units, if any. The Corporation may issue Units to purchasers on the President’s List for an aggregate amount of up to $2,000,000 on the same terms and conditions as the other Units issued under the Offering.

Pursuant to the terms of the Underwriting Agreement, the Corporation has agreed to reimburse the Underwriters for certain expenses incurred in connection with the Offering and to indemnify the Underwriters and their directors, officers, employees and agents against certain liabilities and expenses and to contribute to payments the Underwriters may be required to make in respect thereof.

The Corporation has applied to list the Common Shares issuable in connection with the Offering on the Exchange. Listing will be subject to the Corporation fulfilling all the listing requirements of the Exchange.

No offer or sale of the Units may be made in any jurisdiction except in compliance with the applicable laws thereof. Persons receiving this Prospectus are responsible for informing themselves about and observing any restrictions as to the Offering and the distribution of this Prospectus.

The Underwriters propose to offer the Units initially at the Offering Price. After the Underwriters have made reasonable efforts to sell all of the Units offered by this short form prospectus at such price, the Offering Price may be decreased, and further changed from time to time, to an amount not greater than the Offering Price and the compensation realized by the Underwriters will be decreased by the amount that the aggregate price paid by purchasers for the Units is less than the gross proceeds to be paid by the Underwriters to the Corporation. Any reduction to the Offering Price will not affect the net proceeds received by the Corporation.

It is expected that the Closing Date will occur on or about July 14, 2020, or on such other date as may be agreed upon by the Corporation and the Underwriters, and, in any event, on or before a date not later than 42 days after the date of the receipt for the final short form prospectus. The Units are to be taken up by the Underwriters, if at all, on or before a date that is not less than 42 days after the date of the receipt for the final short form prospectus.

This Offering is being made in the provinces of British Columbia, Alberta, Ontario and Nova Scotia. The Units, Unit Shares, Warrants and Additional Units to be issued pursuant to the Offering have not been and will not be registered under the U.S. Securities Act, or any state securities laws, and may not be offered or sold within the United States or to, or for the account or benefit of, a U.S. person or person in the United States unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from registration is available. The Underwriting Agreement permits the Underwriters, through certain U.S. broker-dealer affiliates, and permits the Corporation to offer the Unit Shares and Warrants for sale in the United States or to, or for the account or benefit of, U.S. persons or person in the United States, provided that such offers and sales comply with certain exemptions from the registration requirements of the U.S. Securities Act and applicable state securities laws. The Underwriters have agreed that they will otherwise offer and sell the Unit Shares and Warrants only outside of the United States in accordance with Rule 903 of Regulation S under the U.S. Securities Act. Terms used in this paragraph have the meanings given to them in Regulation S under the U.S. Securities Act.

In addition, until 40 days after the commencement of the Offering, any offer or sale of the Units, Unit Shares or Warrants within the United States by any dealer (whether or not participating in the Offering) may violate the registration requirements of the
U.S. Securities Act if such offer or sale is made otherwise than in accordance with an exemption from the registration requirements of the U.S. Securities Act. Any Units, Unit Shares or Warrants sold on the basis of an exemption to the registration requirements of the U.S. Securities Act into the United States will be restricted securities within the meaning of Rule 144(a)(3) under the U.S. Securities Act and may only be offered, sold, pledged or otherwise transferred pursuant to certain exemptions from the registration requirements of the U.S. Securities Act and any applicable state securities laws.

Price Stabilization, Short Positions, and Passive Market Making

Pursuant to rules and policy statements of certain Canadian securities regulators, the Underwriters may not, at any time during the period of distribution, bid for or purchase Common Shares or its own account or for accounts over which it exercises control or direction. The foregoing restrictions are subject to certain exceptions including: (i) a bid for or purchase of Units if the bid or purchase is made through the facilities of the Exchange in accordance with the Universal Market Integrity Rules of the Investment Industry Regulatory Organization of Canada; (ii) a bid or purchase on behalf of a client, other than certain prescribed clients, provided that the client’s order was not solicited by the Underwriters or if the client’s order was solicited, the solicitation occurred before the commencement of a prescribed restricted period; and (iii) a bid or purchase to cover a short position entered into prior to the commencement of a prescribed restricted period. In connection with this Offering, the Underwriters may over- allot or effect transactions that stabilize or maintain the market price of the Common Shares at levels other than those which otherwise might prevail on the open market, including: short sales; purchases to cover positions created by short sales; imposition of penalty bids; syndicate covering transactions and stabilizing transactions.

Stabilizing transactions consist of bids or purchases made for the purpose of preventing or retarding a decline in the market price of the Common Shares while this Offering is in progress. These transactions may also include making short sales of the Common Shares, which involve the sale by the Underwriters of a greater number of Common Shares than the maximum number of Common Shares to be issued in this Offering. Short sales may be “covered short sales”, which are short positions in an amount not greater than the Underwriters’ Option, or may be “naked short sales”, which are short positions in excess of that amount.

As a result of these activities, the price of the Common Shares offered hereby may be higher than the price that otherwise might exist in the open market. If these activities are commenced, they may be discontinued by the Underwriters at any time. The Underwriters may carry out these transactions on the Exchange, in the over-the-counter market or otherwise.

Standstill and Lock-up Arrangements

The Corporation has agreed in favour of the Underwriters not to issue any additional Common Shares or any securities convertible or exchangeable into Common Shares for a period of 90 days from the Closing Date, other than in conjunction with
⦁ the grant or vesting of restricted share units or exercise of share purchase options and other similar issuances pursuant to the Corporation’s share compensation arrangements; (ii) acquisitions; (iii) the exercise of any outstanding warrants, options, rights or other convertible securities; or (iv) to satisfy existing contractual obligations, without the prior written consent of the Underwriters, such consent not to be unreasonably withheld or delayed. The Corporation has also agreed to deliver lock-up agreements executed by each of the Corporation’s executive officers and directors pursuant to which they agree, subject to certain exceptions, not to sell, or agree to sell (or announce any intention to do so), any securities of the Corporation for a period

from the Closing until 90 days following the Closing Date without the Underwriters’ prior written consent, which consent will not be unreasonably withheld or delayed.

Non-Certificated Inventory System

Subscriptions for Units will be received by the Underwriters subject to rejection or allotment in whole or in part and the right is reserved to close the subscription books at any time without notice. It is anticipated that the Offering will be conducted under the book-based system, pursuant to which the Corporation will arrange for one or more instant deposits of the Units issued under the Offering to or for the account of the Underwriters with CDS or its nominee through the non-certificated inventory system administered by CDS on the Closing Date. Purchasers of Units will receive only a customer confirmation from the registered dealer from or through which the Units are purchased and who is a CDS participant. CDS will record the CDS participants who hold Units on behalf of owners who have purchased Units in accordance with the book-based system. No definitive certificates will be issued unless specifically requested or required. Notwithstanding the foregoing, any Unit Shares and Warrants sold in the United States or to, or for the account or benefit of, a U.S. person may be represented by individual certificates and not deposited with CDS.

DESCRIPTION OF THE SECURITIES BEING OFFERED

Offering

The Offering consists of Units. Each Unit consists of one Unit Share and one-half of one Warrant. Each Warrant will entitle the holder thereof for a period of 24 months from the Closing Date to acquire one Warrant Share upon payment to the Corporation at an exercise price of $0.40 per Warrant Share. The Units will separate into Unit Shares and Warrants immediately upon issuance. This Prospectus qualifies the distribution of the Units, including the Unit Shares and the Warrants.

Common Shares

The authorized capital of TriStar consists of an unlimited number of Common Shares. As at the date of this Prospectus, 193,504,440 Common Shares are issued and outstanding. There are no limitations contained in the notice of articles or articles of TriStar or the BCBCA on the ability of a person who is not a Canadian resident to hold Common Shares or exercise the voting rights associated with Common Shares. The Common Shares do not carry any pre-emptive, subscription, redemption, retraction, surrender or conversion or exchange rights, nor do they contain any sinking or purchase fund provisions. A summary of the rights attached to the Common Shares is set forth below.

Dividends

Holders of Common Shares are entitled to receive on a pro rata basis dividends if, as and when declared by the board of directors of the Corporation (the “Board”) in respect of the Common Shares. The BCBCA provides that a company may not declare or pay a dividend if there are reasonable grounds for believing that the company is, or would be after the payment of the dividend, unable to pay its liabilities as they become due or the realizable value of its assets would thereby be less than the aggregate of its liabilities and stated capital of all classes of shares of its capital. These rights are subject to the rights, privileges, restrictions and conditions attaching to any other series or class of shares ranking senior in priority to or on a pro rata basis with the holders of Common Shares with respect to dividends. The Board has no current intention to declare dividends on the Common Shares.

Liquidation

The holders of Common Shares are entitled to share ratably in any distribution of the assets of TriStar upon liquidation, dissolution or winding-up, after satisfaction of all debts and other liabilities, and subject to the rights, privileges, restrictions and conditions attaching to any other series or class of shares ranking senior in priority to or on a pro rata basis with the holders of Common Shares with respect to liquidation.

Voting

The holders of Common Shares are entitled to one vote for each share on all matters submitted to a vote of shareholders and do not have cumulative voting rights.

Warrants

The Warrants issued under the Offering will be governed by the Warrant Indenture to be entered into between the Corporation and the Warrant Agent. The following description is subject to the detailed provisions of the Warrant Indenture. Reference should be made to the Warrant Indenture for the full text of attributes of the Warrants. A copy of the Warrant Indenture may be obtained on request from the Corporation’s General Counsel and will be available electronically at http://www.sedar.com and reference should be made to the Warrant Indenture for the full text of the attributes of the Warrants.

Each whole Warrant entitles the holder to acquire, subject to adjustment as summarized below, one Warrant Share at an exercise price of $0.40 per Warrant Share on or before 4:00 p.m. (Vancouver time) on the date that is 24 months from the Closing Date, after which time the Warrant will be void and of no value. For greater certainty, if the Offering closes in multiple tranches, all Warrants, including any Warrants issued pursuant to, or in connection with, the Underwriters’ Option, will expire on the same expiry date 24 months from the initial Closing Date.

The Warrants and the Warrant Shares have not been registered under the U.S. Securities Act or any applicable state securities laws, and the Warrants may not be exercised by or on behalf of a person in the United States or a U.S. person unless an exemption from such registration is available, and the holder of the Warrants provides an opinion of counsel of recognized standing or, in certain cases, other evidence in form and substance reasonably satisfactory to the Corporation to that effect.

The Warrants may be issued in uncertificated form. Any Warrants issued in certificated form shall be evidenced by a warrant certificate in the form attached to the Warrant Indenture. All Warrants issued in the name of CDS may be in either a certificated or uncertificated form, such uncertificated form being evidenced by a book-entry position on the register of warrantholders to be maintained by the Warrant Agent at its principal offices in Vancouver, British Columbia and Toronto, Ontario.

The Warrant Indenture will provide for adjustment in the number of Warrant Shares issuable upon the exercise of the Warrants and/or the exercise price per Warrant Share upon the occurrence of certain events, including a subdivision or consolidation of the Common Shares. The Warrant Indenture will also provide for adjustment in the class and/or number of securities or other property issuable upon the exercise of the Warrants and/or the exercise price per security upon the occurrence of the following additional events: (a) a reclassification or change of the Common Shares, (b) any consolidation, amalgamation, arrangement or other business combination of the Corporation resulting in any reclassification or change of the Common Shares into other shares, or (c) any sale, lease, exchange or transfer of the Corporation’s assets as an entirety or substantially as an entirety to another entity. The Warrant Indenture will also provide that, during the period in which the Warrants are exercisable, it will give notice to holders of Warrants of certain stated events, including events that would result in an adjustment to the exercise price for the Warrants or the number of Warrant Shares issuable upon exercise of the Warrants, at least 14 days prior to the record date or effective date, as the case may be, of such events.

No fractional Warrant Shares will be issued upon the exercise of the Warrants, and no cash or other consideration will be paid in lieu thereof. Holders of Warrants will not have any voting or pre-emptive rights or any other rights which a holder of Common Shares would have.

PRIOR SALES

The following table summarizes the issuances by the Corporation of Common Shares, and securities convertible into Common Shares, during the 12 month period prior to the date of this Prospectus.

Common Shares   

Issuance Date Price per Security Number of Securities
December 12, 2019 $0.20 11,200,000 (1)
January 22, 2020 $0.20 1,500,000(2)
February 4, 2020 $0.18 1,300,000(2)
February 11, 2020 $0.25 200,000(3)
February 13, 2020 $0.18 250,000(2)
May 12, 2020 $0.18 200,000(2)
June 12, 2020 $0.18 100,000(2)

⦁ The Common Shares were issued pursuant to a private placement.
⦁ The Common Shares were issued upon exercise of stock options.
⦁ The Common Shares were issued upon exercise of warrants.

Securities Convertible into Common Shares

Issuance Date Security Price per Security Number of Securities
August 1, 2019 Stock Options $0.17 400,000(1)
August 2, 2019 Warrants $0.25 11,784,000(2)
November 27, 2019 Stock Options $0.20 2,360,000(3)
November 30, 2019 Warrants $0.25 3,928,000(2)
December 12, 2019 Warrants $0.30 5,600,000(4)
December 12, 2019 Broker’s Warrants $0.20 612,000(5)
March 31, 2020 Warrants $0.25 3,928,000(2)

⦁ The stock options were granted to an investor relations consultant of the Corporation.
⦁ The warrants were issued to RG Royalties, LLC pursuant to a royalty agreement dated August 2, 2019.
⦁ The stock options were granted to directors, officers, employees and consultants of the Corporation as compensation for their services.
⦁ The warrants were issued pursuant to a private placement.
⦁ The broker’s warrants were issued to a broker for their services as lead agent in a private placement.

TRADING PRICE AND VOLUME

The Common Shares are listed and posted for trading on the Exchange under the symbol “TSG”. On June 25, 2020, the last trading day prior to the filing of this Prospectus, the closing price of the Common Shares on the Exchange was $0.33. The following table sets forth the high and low trading prices and trading volumes of the Common Shares as reported by the Exchange for the periods indicated:

Month High ($) Low ($) Volume
June 1 to June 25 $0.37 $0.29 3,829,126
May 2020 $0.39 $0.295 1,936,405
April 2020 $0.33 $0.26 842,432
March 2020 $0.315 $0.185 1,820,162
February 2020 $0.37 $0.23 3,817,597
January 2020 $0.28 $0.19 3,770,963
December 2019 $0.21 $0.185 1,050,652
November 2019 $0.22 $0.185 613,895
October 2019 $0.225 $0.185 791,649
September 2019 $0.245 $0.21 1,503,034
August 2019 $0.22 $0.16 1,277,210
July 2019 $0.18 $0.16 500,082

RISK FACTORS

An investment in the Units involves a high degree of risk and must be considered speculative due to the nature of the Corporation’s business and present stage of exploration and development of its mineral properties. Before making an investment decision, prospective purchasers should carefully consider the risks and uncertainties described below, as well as the other information contained in or incorporated by reference in this Prospectus. These risks and uncertainties are not the only ones facing the Corporation. Resource exploration and development is a speculative business, characterized by a number of significant risks including, among other things, unprofitable efforts resulting not only from the failure to discover mineral deposits but also from finding mineral deposits, which, though present, are insufficient in quantity or quality to return a profit from production.

Additional risks and uncertainties not presently known to the Corporation or that the Corporation currently deems immaterial may also impair the Corporation’s business operations. If any such risks actually occur, our business, financial condition and operating results could be materially harmed

Prospective purchasers of the Units offered hereby should carefully consider the risk factors set out below, as well as the information included or incorporated by reference in this Prospectus, including the risk factors set out in the AIF under the heading “Risk Factors”, before making an investment decision to purchase the Units. See “Documents Incorporated by Reference”.

Risks Related to the Offering

Completion of the Offering

The completion of the Offering remains subject to a number of conditions. There can be no certainty that the Offering will be completed. Failure by the Corporation to satisfy all of the conditions precedent to the Offering would result in the Offering not being completed. If the Offering is not completed, the Corporation may not be able to raise the funds required for the purposes contemplated under “Use of Proceeds” from other sources on commercially reasonable terms or at all.

Discretion in the Use of Proceeds

The Corporation currently intends to allocate the net proceeds received from the Offering as described under “Use of Proceeds”. However, management cannot specify with certainty the particular uses of the net proceeds the Corporation will receive from the Offering. Management will have discretion concerning the use of proceeds of the Offering as well as the timing of their expenditures. As a result, investors will be relying on the judgment of management as to the application of the proceeds of the Offering, with only limited information concerning management’s specific intentions. Management may use the net proceeds of the Offering in ways that an investor may not consider desirable. The results and effectiveness of the application of the proceeds are uncertain. If the proceeds are not applied effectively, the Corporation’s results of operations may suffer. Pending their use, the Corporation may invest the net proceeds from the Offering in a manner that does not produce income or that loses value.

Need for Additional Financing

The Corporation had negative operating cash flow for its most recent financial year. The events and conditions outlined in the Annual Financial Statements and the Interim Financial Statements indicate the existence of a material uncertainty that may cast significant doubt as to the Corporation’s ability to continue as a going concern. The Annual Financial Statements and the Interim Financial Statements do not reflect adjustments that would be necessary if the going concern assumption were not appropriate. If the going concern basis was not appropriate for the Annual Financial Statements or the Interim Financial Statements, then adjustments would be necessary to the carrying values of assets and liabilities, the reported expenses, and the consolidated statement of financial position classifications used.

To the extent the Corporation has negative cash flows in future periods, the Corporation may use a portion of its general working capital to fund such negative cash flow. The Corporation may also issue additional Common Shares or offer other securities in subsequent offerings to finance future activities. The Corporation’s failure to obtain additional funding could prevent it from making expenditures that may be required to grow its business or maintain its operations, which would adversely affect the Corporation’s business and financial performance. The Corporation cannot predict the size of future issuances of securities or the effect, if any, that future issuances and offerings of securities will have on the market price of the Common Shares. Sales or issuances of substantial numbers of Common Shares, or the perception that such sales could occur, may adversely affect prevailing market prices of the Common Shares. With any additional sale or issuance of Common Shares, investors will suffer dilution to their voting power and the Corporation may experience dilution in its earnings per share.

An Investment in the Units May Result in the Loss of an Investor’s Entire Investment

An investment in the Units is speculative and may result in the loss of an investor’s entire investment. Only potential investors who are experienced in high risk investments and who can afford to lose their entire investment should consider an investment in the Units.

No Public Market for Warrants

The Corporation has not applied, and does not currently intend to apply, to list the Warrants on any stock exchange, and there is currently no public market through which the Warrants can be sold. This may affect the pricing of the Warrants in the secondary market, the transparency and availability of trading prices, the liquidity of such securities and the extent of regulation applicable thereto. Purchasers may not be able to resell such securities purchased under this Prospectus.

The Common Shares Are Subject to Market Price Volatility

The market price at which the Common Shares will trade cannot be predicted. The market price of the Common Shares may be adversely affected by a variety of factors relating to our business, including fluctuations in operating and financial results. In addition, the stock markets in general have recently experienced extreme volatility. This volatility may adversely affect the market price of the Common Shares. The liquidity of the Common Shares may also be impacted by general market volatility.

Book-Based System

Unless and until certificated the Unit Shares and Warrants are issued in exchange for book-entry interests in the Unit Shares and Warrants, owners of the book-entry interests will not be considered owners or holders of the Unit Shares and Warrants. Instead, the depository or its nominee will be the sole holder of the Unit Shares and Warrants. Unlike holders of the Unit Shares and Warrants themselves, owners of book-based interests will not have the direct right to act upon the Corporation’s solicitations or requests or other actions from holders of the Unit Shares and Warrants. Instead, holders of beneficial interests in the Unit Shares and Warrants will be permitted to act only to the extent such holders have received appropriate proxies to do so from CDS or, if applicable, a CDS participant. There is no assurance that procedures implemented for the granting of such proxies will be sufficient to enable holders of beneficial interests in the Unit Shares and Warrants to vote on any requested actions on a timely basis.

There Are Potential Adverse Canadian Tax Consequences to Canadian Corporate Investors Controlled by Non-Residents

The Tax Act contains provisions which may result in adverse tax consequences to an investor that (i) is a corporation resident in Canada for purposes of the Tax Act; and (ii) is, or becomes as part of, a transaction or event or series of transactions or events that includes investment in the Units, controlled by a non-resident of Canada (within the meaning of the Tax Act) for the purposes of the foreign affiliate dumping rules in the Tax Act. Any such potential investor should consult their own tax advisor regarding the application of these rules in their particular circumstances.

Risks Related to the Business of the Corporation

Climate Change May Have a Negative Impact on the Corporation’s Operations, Financial Position and Market Performance.

Many governments and regulatory bodies have introduced or are contemplating regulatory changes in response to the potential impacts of climate change. These changes may create more stringent regulatory obligations, which may result in increased costs for the Corporation’s operations. Further, these changes could also lead to new and/or more extensive monitoring and reporting requirements.

In addition, the physical risks of climate change may also have a material adverse effect on the Corporation’s operations. Examples of the physical risks of climate change include extreme weather events, resource shortages, changes in rainfall and storm patterns and intensities, water shortages and changing temperatures. Such events could materially impact the Corporation’s operations by disrupting exploration and drilling programs and/or by damaging the Corporation’s infrastructure and properties. Additional costs may also be incurred in responding and recovering from such events.

Public Health Crisis

Global financial conditions and the global economy in general have, at various times in the past and may in the future, experience extreme volatility in response to economic shocks or other events, such as the ongoing situation concerning COVID-19. Many industries, including the mining industry, are impacted by volatile market conditions in response to the widespread outbreak of epidemics, pandemics or other health crises. Such public health crises and the responses of governments and private actors can result in disruptions and volatility in economies, financial markets and global supply chains as well as declining trade and market sentiment and reduced mobility of people, all of which could impact commodity prices, interest rates, credit ratings, credit risk and inflation.

As at the date hereof, the global reactions to the spread of COVID-19 have led to, among other things, significant restrictions on travel and gatherings of individuals, quarantines, temporary business closures and a general reduction in consumer activity. While these effects are expected to be temporary, the duration of the disruptions to business internationally and the related financial impact cannot be estimated with any degree of certainty at this time. In addition, the increasing number of individuals infected with COVID-19 could result in a widespread global health crisis that could adversely affect global economies and financial markets, resulting in a protracted economic downturn that could have an adverse effect on the demand for precious metals and the Corporation’s future prospects.

In particular, the continued spread of COVID-19 globally could materially and adversely impact the Corporation’s business, including without limitation, employee health, workforce availability and productivity, limitations on travel, supply chain disruptions, increased insurance premiums, the availability of industry experts and personnel, restrictions to the Corporation’s exploration and drilling programs and/or the timing to process drill and other metallurgical testing. Any such disruptions or closures could have a material adverse effect on the Corporation’s business. In addition, parties with whom the Corporation does business or on whom the Corporation is reliant may also be adversely impacted by the COVID-19 crisis which may in turn cause further disruption to the Corporation’s business. Any long-term closures or suspensions may also result in the loss of personnel or the workforce in general as employees seek employment elsewhere. The impact of COVID-19 and government responses thereto may also continue to have a material impact on financial results and could constrain the Corporation’s ability to obtain equity or debt financing in the future, which may have a material and adverse effect on its business, financial condition and results of operations.

As a result of the COVID-19 pandemic, the Corporation temporarily ceased all drilling activities at the Project and has placed the camp on care and maintenance only. Due to a reduction of activities at the Project, the completion of the prefeasibility study may be delayed, although the Corporation cannot predict for how long this delay may last.

While the COVID-19 pandemic has already had significant, direct impacts on the Corporation’s operations and business, the extent to which the pandemic will continue to impact the Corporation’s operations are highly uncertain and cannot be predicted with confidence as at the date of this prospectus. These uncertainties include, but are not limited to, the duration of the outbreak, the Brazilian government’s response to curtail the spreading of the virus, community and social stabilities, the Corporation’s ability to resume activities at its Project, efficiently or economically. Any of these uncertainties, and others, could have further material adverse effect on the Corporation’s business and operations.

LEGAL MATTERS

Certain legal matters relating to the Offering will be passed upon on behalf of the Corporation by Maxis Law Corporation, and on behalf of the Underwriters by Fasken Martineau DuMoulin LLP. As of the date hereof, the partners and associates of Maxis Law Corporation and Fasken Martineau DuMoulin LLP each beneficially own, directly or indirectly, in their respective groups, less than 1% of any class of outstanding securities of the Corporation.

AUDITOR, TRANSFER AGENT AND REGISTRAR

Pannell Kerr Forster of Texas, P.C. is the auditor of the Corporation and has confirmed that it is independent within the meaning of the relevant rules and related interpretations prescribed by the relevant professional bodies in Canada and any applicable legislation or regulations. As of the date hereof, Pannell Kerr Forster of Texas, P.C., and its partners and associates, beneficially own, directly or indirectly, in their respective groups, less than 1% of any class of outstanding securities of the Corporation.

The transfer agent and registrar for the Common Shares is Computershare Trust Company of Canada at its principal offices in 3rd Floor, 510 Burrard Street, Vancouver BC, V6C 3B9.

INTEREST OF EXPERTS

The following persons or companies whose profession or business gives authority to the report, valuation, statement or opinion made by the person or company are named in this Prospectus as having prepared or certified a report, valuation, statement or opinion in this Prospectus:

⦁ Maxis Law Corporation is the Corporation’s counsel with respect to Canadian legal matters;

⦁ Fasken Martineau DuMoulin LLP is the Underwriters’ counsel with respect to Canadian legal matters herein;

⦁ Thorsteinssons LLP is the Corporation’s counsel with respect to certain tax matters herein;

⦁ Pannell Kerr Forster of Texas, P.C. is the Corporation’s auditor and audited the annual financial statements for the Corporation for the year ended December 31, 2019 incorporated by reference into this Prospectus; and

⦁ R. Mohan Srivastava (P.Geo.), Vice President of the Corporation is a “qualified person” within the meaning of NI 43-101, and is responsible for the review and approval of certain scientific and technical information contained in this Prospectus.

To the knowledge of management, as of the date hereof, the aforementioned firms held either less than one percent or no securities of the Corporation or of any associate or affiliate of the Corporation.

STATUTORY RIGHTS OF WITHDRAWAL AND RESCISSION

Securities legislation in certain of the provinces of Canada provides purchasers with the right to withdraw from an agreement to purchase securities. This right may be exercised within two business days after receipt or deemed receipt of a prospectus and any amendment. In several of the provinces of Canada, the securities legislation further provides a purchaser with remedies for rescission or, in some jurisdictions, revisions of the price or damages if the prospectus and any amendment contains a misrepresentation or is not delivered to the purchaser, provided that the remedies for rescission, revisions of the price or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser’s province. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s province for the particulars of these rights or consult with a legal adviser.

In the offering of Warrants, investors are cautioned that the statutory right of action for damages for a misrepresentation contained in the prospectus is limited, in certain provincial securities legislation, to the price at which the Warrants are offered to the public under the prospectus offering. This means that, under the securities legislation of certain provinces, if the purchaser pays additional amounts upon exchange or exercise of the security, those amounts may not be recoverable under the statutory right of action for damages that applies in those provinces. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s province for the particulars of this right of action for damages or consult with a legal advisor.

ENFORCEMENT OF JUDGMENTS AGAINST FOREIGN PERSONS

Mark E. Jones III, a director and the non-Executive Chairman of the Corporation, Nicholas Appleyard, the President, Chief Executive Officer and director of the Corporation, Scott Brunsdon, the Chief Financial Officer of the Corporation, Carlos Vilhena, a director of the Corporation, and Quinton Hennigh, a director of the Corporation (collectively, the “Executives”) all reside outside of Canada. The Executives have appointed the Corporation as their agent for service of process. Purchasers are advised that it may not be possible for investors to enforce judgments obtained in Canada against the Executives, or any other person or company that is incorporated, continued or otherwise organized under the laws of a foreign jurisdiction or resides outside of Canada, even if such person has appointed an agent for services of process.

CERTIFICATE OF THE CORPORATION

Dated: June 26, 2020

This short form prospectus, together with the documents incorporated by reference, constitutes full, true and plain disclosure of all material facts relating to the securities offered by this short form prospectus as required by the securities legislation of each of the provinces of British Columbia, Alberta, Ontario and Nova Scotia.

(signed) “Nicholas Appleyard” (signed) “Scott Brunsdon”
President and Chief Executive Officer Chief Financial Officer

On behalf of the Board of Directors:

(signed) “Brian Irwin”
(signed) “Quinton Hennigh”
Director Director

CERTIFICATE OF THE UNDERWRITERS

Dated: June 26, 2020

To the best of our knowledge, information and belief, this short form prospectus, together with the documents incorporated by reference, constitutes full, true and plain disclosure of all material facts relating to the securities offered by this prospectus as required by the securities legislation of each of the provinces of British Columbia, Alberta, Ontario and Nova Scotia.

CORMARK SECURITIES INC.

(signed) “Kevin Carter”
Managing Director, Investment Banking

RED CLOUD SECURITIES INC.

(signed) “Bruce Tatters”
Chief Executive Officer

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