Cerrado Files NI 43-101 Preliminary Economic Assessment Technical Report and Mineral Resource Estimate for The Minera Don Nicolas Mine in Santa Cruz, Argentina
Cerrado Files NI 43-101 Preliminary Economic
Assessment Technical Report and Mineral Resource
Estimate for The Minera Don Nicolas Mine in Santa Cruz,
Argentina
• After Tax NPV5% of US$111 Million at US$2,100/oz Au price
o After Tax NPV5% of US$153 Million at Spot prices1
• Average annual production targeted at approx. 56,000 Gold Equivalent Ounces
("GEO")2
• Life of Mine Average annual EBITDA of US$49 Million and FCF of US$25 Million
o LOM average EBITDA of US$64 Million and FCF of US$34 Million at Spot
prices1
• Mine life of 5 years, from April 2024 based on existing Resources
• Average Cash Costs of US$866/oz; Avg AISC US$1,148/oz
• No Material Upfront Capital Expenditures required
• Updated Mineral Resource Estimate contains 490,000ozs of Measured and Indicated
Resources and 121,150 ozs of Inferred Resources with potential upside from continued
drilling & resource expansion
1. Spot prices; Au: US$2,400/oz and Ag:US$29/oz
2. GEO calculated by multiplying recovered silver ounces by (25/2100)
TORONTO, ON / ACCESSWIRE / September 19, 2024 / CERRADO GOLD ("Cerrado" or
the "Company") is pleased to announce that it has filed the technical report of the Preliminary
Economic Assessment ("PEA") and an updated Mineral Resource Estimate ("MRE") prepared by
GeoEstima SpA in accordance with National Instrument NI 43-101 for its Minera Don Nicolas
mine located in Santa Cruz Province, Argentina. The work was completed by GeoEstima SpA.
The full report is now filed and available on SEDAR+ as of September 19, 2024.
Mark Brennan, CEO of Cerrado Gold commented "The results of the PEA support our view that
MDN is set to enter a period of stable operations, generating robust cash flows and improving
the balance sheet. We have already demonstrated this in our most recent Q2 results, and we
expect the trend to continue this quarter. This, when combined with the expected US$45MM in
total cash payments for the recent option granted on our Brazilian asset over the next two years
will position Cerrado for future growth. We continue to view MDN as early in its exploration life
and our ongoing drill program is designed to increase mine life and unlock the potential for
MDN to become a world-class multi-deposit district in the future."
PEA Summary Results
PEA Base Case1
Average Annual Gold Equivalent Production (ounces) 55,683
Mine life (years) - Mine Plan start Date 1 April 2024 5.0
Total Gold Equivalent Production (ounces) 278,417
NPV @ 5% discount rate (millions, after-tax) $ 111
NPV @ 8% discount rate (millions, after-tax) $ 105
Gold Price (US$/oz) 2,100.0
Silver Price (US$/oz) 25.0
Average Annual EBITDA $ 49 M
Average Annual FCF $ 25 M
Capital Costs
Initial capital expenditure (Initial Capex) $ 0 M
Sustaining capital expenditures $ 9.5 M
Reclamation cost $ 7 M
Salvage Value $ 3.3 M
Operating Costs
Total cash cost (per ounce sold) 2 866
Mine-site all-in-sustaining cost (per ounce sold) 3 1,148
Notes:
1. Sprott Streaming Agreement has been excluded from this analysis
2. Before royalties and after by-product credits
3. Include C1 cash costs, plus royalties plus sustaining capital
Mineral Resource Estimate
The PEA is based on the updated Mineral Resource Estimate (MRE), prepared in accordance
with National Instrument 43-101 - Standards of Disclosure for Mineral Projects, completed by
GeoEstima, with an effective date of April 1st, 2024, as presented below. It should be noted that
Mineral Resources, which are not Mineral Reserves do not have demonstrated economic viability.
This update reflects not only those resources assumed to be mined in the PEA but also other
defined resources within the greater MDN property. Estimation of depleted satellite Mineral
Resources was validated by Cerrado's Qualified Persons ("QPs"), as defined in NI 43-10,
keeping estimation parameters from the previous technical report (SRK 2020), and using updated
drilling data bases and constraining pit shells.
Mineral Resources
The following table shows our estimates of Mineral Resources prepared with an effective date of
April 01, 2024 (except as indicated below).
Grade Values Metal Content
Mine Classification Tonnage Au Ag Au Ag
kt g/t g/t k oz k oz
Calandrias
Sur ¹
(Open pit)
Measured 5,192.24 0.91 17.07 151.32 2,849.04
Indicated 7,642.16 1.02 14.16 249.40 3,479.94
M+I 12,834.40 0.97 15.34 400.72 6,328.98
Inferred 2,261.42 0.62 3.32 44.99 241.64
Calandrias
Norte ¹
(Open Pit)
Measured 8.12 18.66 25.98 4.87 6.78
Indicated 70.67 14.52 22.79 32.98 51.79
M+I 78.79 14.94 23.12 37.85 58.57
Inferred 10.58 10.69 12.17 3.64 4.14
Zorro ¹
(Open pit)
Measured 69.09 2.15 8.74 4.78 19.42
Indicated 136.50 1.32 7.38 5.80 32.39
M+I 205.59 1.60 7.84 10.58 51.81
Inferred 120.88 0.81 6.38 3.16 24.79
Depleted
Satellites ² ³
(Open Pit)
Measured 29.91 2.04 0.00 1.96 0.00
Indicated 14.99 1.80 0.00 0.87 0.00
M+I 44.90 1.96 0.00 2.83 0.00
Inferred 1,117.03 1.62 1.72 58.14 61.62
Paloma Trend
¹
(Underground)
Measured 128.86 4.73 18.98 19.58 78.62
Indicated 145.96 4.00 15.97 18.78 74.94
M+I 274.82 4.34 17.38 38.36 153.56
Inferred 88.91 3.93 13.15 11.22 37.58
Total
Measured 5,428.22 1.05 16.93 182.52 2,953.87
Indicated 8,010.27 1.20 14.13 307.82 3,639.05
M+I 13,438.50 1.13 15.26 490.34 6,592.92
Inferred 3,598.83 1.05 3.20 121.15 369.77
Stockpiles 4
Measured 0.00 0.00 0.00 0.00 0.00
Indicated 0.00 0.00 0.00 0.00 0.00
M+I 0.00 0.00 0.00 0.00 0.00
Inferred 951.74 0.54 2.05 16.57 62.58
Notes:
¹ Included in economic evaluation
² Not included in economic evaluation
³ Satellites include Armadillo, Baritina, Baritina NE, Cerro Oro, Coyote, Choique, Mara, and
Trofeu.
⁴ Include the stocks from: Armadillo, Cerro Oro, Coyote, Choique, and Mara.
Notes to Mineral Resources Table
Mineral Resource estimates were prepared by the May 10, 2014 edition of the Canadian Institute
of Mining, Metallurgy and Petroleum (or CIM) Definition Standards for Mineral Resources and
Mineral Reserves ("2014 CIM Definition Standards") and disclosed in accordance with National
Instrument 43-101 - Standards of Disclosure for Minerals Project ("NI 43-101").
The Qualified Persons for the estimation of Mineral Resources are Calandrias Sur, Calandrias
Norte, Zorro, Paloma Trend and Stockpiles - Orlando Rojas, P.Geo, Member AIG, a GeoEstima
SpA employee and Armadillo, Baritina, Baritina NE, Cerro Oro, Coyote, Choique, Mara and
Trofeu - Sergio Gelcich, P.Geo, MAusIMM (CP) Geo, Vice President, Exploration, a Cerrado
Gold employee.
Mineral Resources have an effective date as of: (a) April 1st, 2024, for Calandrias Sur, Calandrias
Norte, Zorro, Paloma Trend, Armadillo, Baritina, Baritina NE, Cerro Oro, Coyote, Choique, and
Trofeu; (b) August 31st, 2020, for Mara satellite.
Mineral Resources estimated using an average long-term metal price of US$2,100.0/oz of Au
and US$25.0/oz of Ag. For Mara satellite, an average long-term metal price of US$1,550.0/oz of
Au is considered, assuming a mining cost of US$2.65/t, plant cost of US$32.0/t, and selling costs
of US$127.0/t.
Recoveries depend on the type of host mineralization and the extraction method being utilized
for the minerals. For the carbon-in-leach (CIL) process, Au recovery is based on historical
metallurgical recovery, which is 90% for Au and 61% for silver. For the Heap Leach process
(HL), Au recovery is based on metallurgical test works and depends on the zone. Au recovery is
70% in the Oxide zone, 60% in the Transitional zone, and 40% in the Primary zone. The silver
recovery is 30% in all zones.
Mineral Resources in open pit are reported within pit shell constrain and above a cut-off grade:
Calandrias Sur has a variable cut-off - 0.27 g/t Au for the Oxided zone, 0.31 g/t Au for the
Transition zone and 0.46 g/t Au for Primary zone; Calandrias Norte - 1.46 g/t Au; Zorro,
Armadillo, Baritina, Baritina NE, Cerro Oro, Coyote, Choique, Mara and Trofeu - 0.3 g/t Au. In
Paloma Trend, Mineral Resources are reported within a cut-off grade of 1.95 g/t for underground
mining shapes. A minimum mining width of 1.5m was used for resource shapes.
The estimated costs are: Calandrias Sur - plant cost of US$11.08/t; Calandrias Norte - plant cost
of US$78.33/t; Zorro - plant cost varying from US$ 13.35 for HL process and US$ 68.20 for CIL
process; Depleted Satellite - plant cost of US$40.0/t. The selling costs of US$242.90/t and
mining costs of US$3.50/t was assumed for all open pit costs of US$3.50/t was assumed for all
open pit were assumed for all open-pit mining. For underground shapes, the mining costs are
US$40.0/t, plant costs are US$65.0/t and selling costs are US$242.9/t. The exchange rate
considered is ARG 917.25 / 1 USD.
Density was assigned and interpolated based on specific gravity values by domain.
Numbers may not be added due to rounding.
Technical Disclosure
The reader is advised that the PEA summarized in this press release is intended to provide only
an initial, high-level review of the project potential and design options. The PEA mine plan and
economic model include numerous assumptions and the use of Inferred Mineral Resources, and
are preliminary in nature. Inferred Mineral Resources are considered to be too geologically
speculative to have mining and to be used in an economic analysis except as allowed for by
National Instrument 43-101 in PEA studies. There is no guarantee the project economics
described herein will be achieved.
Independent Qualified Persons
Orlando Rojas, Javier Pizarro and Cristian Quezada are the Qualified Persons as defined in NI
43-101 responsible for the Technical Report and are all independent of the Company.
Review of Technical Information
The scientific and technical information in this press release has been reviewed and approved by
Sergio Gelcich, P.Geo., Vice President, Exploration for Cerrado Gold Inc., who is a Qualified
Person as defined in National Instrument 43-101.
About GeoEstima
GeoEstima, based in Santiago, Chile, has a consolidated experience spanning over a decade. Is a
specialized consulting firm in economic geology, geometallurgy, and mining, dedicated to
providing services to the global minerals industry. Our mission is to offer top-tier advisory and
consultancy services to clients, delivering comprehensive solutions developed by a highly
experienced team deeply committed to their work.
The GeoEstima team comprises seventeen distinguished professionals, 41% of whom are women.
Of these, 75% are highly qualified geologists, and 60% hold at least a master's degree in their
respective fields. Furthermore, over half of the team members boast at least ten years of hands-
on experience. At GeoEstima, we blend the extensive experience of our seasoned professionals
with the innovative mindset of emerging talents embarking on their careers. The result is a
dynamic and collaborative team that fosters innovation and continuous growth.
GeoEstima brings expertise across various areas spanning the entire mining business chain,
including exploration, mine planning, mineral resource/reserve assessments, geometallurgy,
strategic business planning, mining operations, financial evaluations, and exploration.
Specifically, we provide guidance and consultancy in economic geology and strategic mining
planning for exploration, mining, and engineering companies, as well as for acquisitions, mining
planning, and control.
About Cerrado
Cerrado Gold is a Toronto-based gold production, development, and exploration company
focused on gold projects in South America. The Company is the 100% owner of both the
producing Minera Don Nicolás and Las Calandrias mine in Santa Cruz province, Argentina, and
the Monte Do Carmo development project, located in Tocantins State, Brazil. In Canada, Cerrado
Gold is developing it's 100% owned Mont Sorcier DRI Iron project located outside of
Chibougamou, Quebec.
In Argentina, Cerrado is maximizing asset value at its Minera Don Nicolas operation through
continued operational optimization and is growing production through its operations at the Las
Calandrias Heap Leach project. An extensive campaign of exploration is ongoing to further
unlock potential resources in our highly prospective land package in the heart of the Deseado
Masiff.
In Canada, Cerrado holds a 100% interest in the Mont Sorcier DRI Iron Ore project, which has
the potential to produce a premium iron ore concentrate over a long mine life at low operating
costs and low capital intensity. Furthermore, its high grade and high purity product facilitates the
migration of steel producers from blast furnaces to electric arc furnaces, contributing to the
decarbonization of the industry and the achievement of SDG goals.
For more information about Cerrado, please visit our website at: www.cerradogold.com
Mark Brennan
CEO and Chairman
Mike McAllister
Vice President, Investor Relations
Tel: +1-647-805-5662
Cautionary Statement on Mineral Resource Estimates
All Mineral Resource estimates of the Company disclosed or referenced in this news release have
been prepared in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum
("CIM") Definition Standards on Mineral Resources and Mineral Reserves dated May 10, 2014
("2014 CIM Definition Standards"), whose definitions are incorporated by reference in National
Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101"):
Mineral resource: is a concentration or occurrence of 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
economic extraction. A mineral resource is a reasonable estimate of mineralization, taking into
account relevant factors such as cut-off grade, likely mining dimensions, location or continuity,
that, with the assumed and justifiable technical and economic conditions, is likely to, in whole or
in part, become economically extractable.
Inferred mineral resource: is that part of a mineral resource for which quantity and grade or
quality can be estimated on the basis of geological evidence and limited sampling and
reasonably assumed, but not verified, geological and grade continuity. The estimate is based on
limited information and sampling gathered through appropriate techniques from locations such
as outcrops, trenches, pits, workings and drill holes. 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.
Indicated mineral resource: that part of a mineral resource for which quantity, grade or quality,
densities, shape and physical characteristics can be estimated with a level of confidence
sufficient to allow the appropriate application of technical and economic parameters to support
mine planning and evaluation of the economic viability of the deposit. The estimate is based on
detailed and reliable exploration and testing information gathered through appropriate
techniques from locations such as outcrops, trenches, pits, workings and drill holes that are
spaced closely enough for geological and grade continuity to be reasonably assumed. An
indicated mineral resource has a lower level of confidence than that applying to a measured
mineral resource and may only be converted to a probable mineral reserve.
Measured mineral resource: that part of a mineral resource for which quantity, grade or quality,
densities, shape and physical characteristics are so well established that they can be estimated
with confidence sufficient to allow the appropriate application of technical and economic
parameters to support production planning and evaluation of the economic viability of the
deposit. The estimate is based on detailed and reliable exploration, sampling and testing
information gathered through appropriate techniques from locations such as outcrops, trenches,
pits, workings and drill holes that are spaced closely enough to confirm both geological and
grade continuity. A measured mineral resource has a higher level of confidence than that
applying to either an indicated mineral resource or an inferred mineral resource. It may be
converted to a proven mineral reserve or to a probable mineral reserve.
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