TNR Gold Corp (TNR)

[JD400]

TNR MUX Los Azules Copper 1.6 Billion Tonnes
From MUX 10Q 1st Quarter Released Today

In February 2013, we announced an updated Canadian National Instrument 43-101 compliant (“NI 43-101”) mineral resource estimate for the Los Azules Copper Project, located in Argentina, which estimated 1.6 billion tonnes of mineralized material with a weighted average grade of 0.52 percent copper.

A total of 52,000 ft. (15,843 m) was drilled at the Project during this past drill season, which ran from October 2012 to March 2013, of which 21,000 ft. (6,407 m) was drilled in the first quarter of 2013. Drilling this season has continued to focus on expanding the resource both laterally and to depth and the drill results for the season will be incorporated into a new resource estimate which will be released by the end of May 2013.

We announced the results of new metallurgical studies which tested alternative process methods that suggest potential for improved economic returns associated with the project. The tests produced encouraging results in the areas of flotation optimization, pressure oxidation on floatation concentrates, and testing of low grade material for suitability in a heap leach.

We have continued working on an updated Preliminary Economic Assessment (“PEA”) which is expected to be completed in the third quarter of 2013. The updated PEA will be based on significantly more mineralized material and will evaluate the possibility of increasing the daily throughput. The updated PEA will also incorporate the results of the metallurgical studies.

Liquidity and Capital Resources

We believe our working capital at March 31, 2013 is sufficient to fund ongoing exploration and corporate activities over the next 12 months. Our sources of working capital at March 31, 2013 include cash on hand, other current assets, revenue from Phase 1 of El Gallo and any distributions from the San José Mine. However, in order to fund the development of El Gallo Phase 2, pending receipt of regulatory approvals, we will need to raise additional capital given the capital cost is estimated at approximately $180 million which significantly exceeds our available working capital. We are currently exploring several financing methods to complete the development and construction of El Gallo Phase 2, which include the sale of the Los Azules Copper Project in Argentina or a joint venture to develop the Los Azules Copper Project, incurring debt, issuing equity and equipment leasing. Our ability to continue with El Gallo Phase 2 is dependent on one or several of the alternatives being completed.

View full 1st Quarter Report here
http://www.sec.gov/Archives/edgar/data/314203/000110465913038912/a13-8203_110q.htm