Cerrado GOLD Achieves Strong First Quarter Earnings, Cashflow and Low Operating Costs at Its Minera Don Nicolas MINE IN Argentina
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May 27, 2022 www.cerradogold.com
CERRADO GOLD ACHIEVES STRONG FIRST QUARTER EARNINGS, CASHFLOW AND LOW
OPERATING COSTS AT ITS MINERA DON NICOLAS MINE IN ARGENTINA
• Q1 Production of 13,499 Gold Equivalent Ounces at an AISC of $1,123 per ounce of gold
• Record Q1 operating margin at Minera Don Nicolas of $9.2 million
• Record Q1 Corporate adjusted EBITDA of $9.7 million and Net Income of $3.4 million
TORONTO, ONTARIO - Cerrado Gold Inc. [TSX.V: CERT][OTCQX:CRDOF] ("Cerrado" or the
"Company”) is pleased to announce its operational and financial results for the first quarter of 2022
(“Q1 2022”). Q1 2022 represents the second quarter of mine operations post completion of
operational restructuring at its Minera Don Nicolas (“MDN”) Mine in Argentina. The Company’s
financial results are reported and available on SEDAR as well as on the Company’s website
(www.cerradogold.com).
Q1 2022 Minera Don Nicolas Operational Highlights (All numbers reported in US$)
• Production of 13,007 ounces of gold in Q1 2022 (13,499 Gold Equivalent Ounces) , a 74%
improvement compared to the first quarter of 2021
• Second consecutive quarter of gold production in excess of 50,000 ounces per annum
production rate
• The average gold head grade of 4.68 g/t represents an 81% increase as compared to the
average head grade of 2.59 g/t recorded in the first quarter of 2021
• Cash Cost of $850 and AISC of $1,123 per gold ounce sold
• Strong operating margin of $9.2 million with operating cash flows of $8.8 million in the first
quarter
Mark Brennan, CEO and Co-Chairman stated: “ We are very pleased with the consistent production
the team are delivering at MDN. The strong cashflow s we are now generating in Argentina will
support our planned expansion to a 9 0,000 ounce per annum production rate within the next two
years. Combined with the development of the Monte do Carmo project in Brazil, Cerrado continues
its quest of becoming an intermediate gold producer in the near term.”
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First Quarter 2022 Operational and Financial Performance
The Company produced 13,007 ounces of gold and 27,107 ounces of silver during the three months
ended March 31, 2022, as compared to 7,485 ounces of gold and 15,531 ounces of silver in the three
months ended March 31, 2021. Production was 74% higher in the three months ended March 31,
2022 due to higher mining rates, throughput and higher grade.
Key Operating Information Unit 2022 2021
Operating Data
Ore Mined ktonnes 89.22 75.40
Waste Mined ktonnes 879.12 1,267.73
Total Mined ktonnes 968.34 1,343.13
Strip Ratio waste/ore 9.85 16.81
Mining rate ktpd 10.76 15.80
Ore Milled ktonnes 98.67 94.58
Head Grade Au g/t 4.68 2.59
Head Grade Ag g/t 14.85 8.00
Recovery Au % 89% 91%
Recovery Ag % 58% 61%
Mill Throughput tpd 1,096 1,113
Gold Ounces Produced oz 13,007 7,485
Silver Ounces Produced oz 27,107 15,531
Gold Ounces Sold oz 14,622 6,584
Silver Ounces Sold oz 32,866 14,108
Average realized price and Average realized margin
Metal Sales $ 000's 27,384 11,163
Cost of Sales $ 000's 18,210 11,131
Gross Margin from Mining Operations $ 000's 9,174 32
Average realized price per gold ounce sold (1) $/oz 1,819 1,639
Total cash costs per gold ounce sold (1) $/oz 850 1,363
Average realized margin per gold ounce sold (1) $/oz 969 275
Total Cash Costs (1) $ 000's $12,427 8,977
Total cash costs per gold ounce sold (1) $/oz $850 1,363
AISC - Minera Don Nicolas (1) $/oz $1,123 1,747
(1) This is a non-IFRS performance measure, see non-IFRS Performance Measures
Three Months Ended March 31
Corporate Financial Highlights Unit 2022 2021
Financial Data
Total revenue $ 000's 27,384 11,163
Mine operating expenses $ 000's 18,210 11,131
Income (loss) from mining operations $ 000's 9,174 32
Net income (loss) $ 000's 3,352 (5,672)
Adjusted EBITDA (1) $ 000's 9,669 (956)
Operating cash flow before movements in working capital (1) $ 000's 6,492 (3,782)
Operating cash flow $ 000's 8,780 (1,685)
Cash and cash equivalents $ 000's 26,127 14,014
Working capital surplus (deficiency) $ 000's 6,820 608
Capital Expenditures $ 000's 1,965 2,540
(1) This is a non-IFRS performance measure, see non-IFRS Performance Measures
Three Months Ended March 31
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The average gold head grade of 4.68 grams per tonne (“ g/t”) represents an 81% increase as
compared to the average head grade of 2.59 g/t recorded in the first quarter of 2021. The average
silver head grade of 14.8 g/t represents an 86% increase as compared to the average silver head
grade of 8.0 recorded in the first quarter of 2021. Mill throughput of 98,670 tonnes of ore represents
a 4% increase in throughput as compared to the first quarter of 2021.
The Company generated revenue of $27.4 million for the three months ended March 31, 2022, from
the sale of 14,622 ounces of gold and 32,866 ounces of silver at an average realized price per gold
ounce sold of $1,819 and price per silver ounce sold of $24.01 For the three months ended March
31, 2021, the Company generated revenue of $11.2 million from the sale of 6,584 ounces of gold
and 14,108 ounces of silver. Revenue from sales of gold and silver for the current period was 145%
higher than the three months ended March 31, 2021, due the higher gold sales and higher realized
price in the current period as compared to the three months ended March 31, 2021.
Cash operating costs per ounce sold was $850 per ounce in the three months ended March 31, 2022,
which represents a 38% reduction compared to the first quarter of 2021. The strip ratio of 9.85 for
the three months ended March 31, 2022, was 71% lower as compared to the three months ended
March 31, 2021, contributing to the lower cash costs achieved.
Net income for the three months ended March 31, 2022, was $3.4 million as compared to a $5.7
million net loss for the three months ended March 31, 2021, an improvement of $9.1 million. The
increase in net income is primarily a result of a mine operating ma rgin of $9.2 million (an increase
of $9.1 million) a decrease in listing expenses of $1.5 million, a decrease in general and
administrative expenses of $0.4 million offset by an increase of transaction costs of $0.6 million and
foreign exchange expense of $0.6 million.
The Company incurred general and administrative expenses of $1.9 million for the three months
ended March 31, 2022 , a $0.4 million decrease compared to the general and administrative
expenses incurred during the three months ended March 31, 2021. During the three months ended
March 31, 2022, general and administrative expenses decreased primarily due to a decrease in
consulting and professional fees of $0.6 million, offset by a $0.2 million increase in non -cash stock
based compensation expense.
Other expenses included a $1.5 million decrease in listing expense, offset by an increase of $0.6
million in transaction costs relating to the Sprott transaction and an increase of $0.6 million in
foreign exchange expense during the three months ended March 31, 2022, as compared to the three
months ended March 31, 2021.
Adjusted EBITDA was $9.7 million in the first quarter of 2022 which is a $10.6 million improvement
as compared to the $0.9 million adjusted EBITDA loss recorded in the first quarter 20 21. Adjusted
EBITDA also represented a $1.4 million improvement as compared to the fourth quarter of 2021.
Basic and diluted earnings per share for the three months ended March 31, 2022, was $0.04,
compared to the basic and diluted loss per share of $0.10 for the three months ended March 31,
2021, a $0.14 per share improvement as a result of the improved operating performance of the
mine in 2022.
Review of Technical Information
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The scientific and technical information in this press release has been review ed 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.
Mark Brennan Nicholas Campbell, CFA
CEO and Co Chairman Director, Corporate Development
Tel: +1-647-796-0023 Tel: +1-905-630-0148
[email protected] [email protected]
About Cerrado Gold
Cerrado Gold is a public gold producer and exploration company with gold production derived from its 100% owned
Minera Don Nicolás mine in Santa Cruz province, Argentina. It also owns 100% of the assets of Minera Mariana in Santa
Cruz province, Argentina. The company is also unde rtaking exploration and development activities at its 100% owned
Monte Do Carmo project located in Tocantins, Brazil. For more information about Cerrado Gold please visit our website
at: www.cerradogold.com.
Disclaimer
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This press release contains statements that constitute “forward -looking information” (collectively, “forward -looking
statements”) within the meaning of the applicable Canadian securities legislation, all statements, other than statements
of historical fact , are forward -looking statements and are based on expectations, estimates and projections as at the
date of this news release. Any statement that discusses predictions, expectations, beliefs, plans, projections, objectives,
assumptions, future events or performance (often but not always using phrases such as “expects”, or “does not expect”,
“is expected”, “anticipates” or “does not anticipate”, “plans”, “budget”, “scheduled”, “forecasts”, “estimates”, “believes”
or “intends” or variations of such words and phrases or stating that certain actions, events or results “may” or “could”,
“would”, “might” or “will” be taken to occur or be achieved) are not statements of historical fact and may be forward -
looking statements.
Forward-looking statements contained in this press release include, without limitation, statements regarding the
business and operations of Cerrado Gold. In making the forward - looking statements contained in this press release,
Cerrado Gold has made certain assumptions, including, but not limited to ability of Cerrado to expand its drilling program
at its Minera Don Nicolas Project and increase its resources and that the Michelle property may provide similar results
to adjacent properties. Although Cerrado Gold believes that the expectations re flected in forward-looking statements
are reasonable, it can give no assurance that the expectations of any forward-looking statements will prove to be correct.
Known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ
materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited
to general business, economic, competitive, political and social uncertainties. Accordingly, readers should n ot place
undue reliance on the forward-looking statements and information contained in this press release. Except as required by
law, Cerrado Gold disclaims any intention and assumes no obligation to update or revise any forward-looking statements
to reflect actual results, whether as a result of new information, future events, changes in assumptions, changes
in factors affecting such forward-looking statements or otherwise.