Cerrado GOLD Announces Q1 Financials, Cashflow and Operating Cost Performance FOR Its Minera Don Nicolas MINE IN Argentina
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June 26, 2024 www.cerradogold.com
CERRADO GOLD ANNOUNCES Q1 FINANCIALS, CASHFLOW AND OPERATING COST
PERFORMANCE FOR ITS MINERA DON NICOLAS MINE IN ARGENTINA
• Q1 Gold equivalent production of 11,204 GEO while transitioning to new Calandrias Norte
deposit
• Production levels at MDN stabilized beginning in March at both the CIL and Heap leach
• MDN production for March, April and May exceeded 17,000 ounces, supporting the
ongoing turnaround of operations at MDN
• Application to remove Cease Trade Order Underway
TORONTO, ONTARIO – Cerrado Gold Inc. [TSX.V: CERT][OTCQX: CRDOF] (“Cerrado” or the
“Company”) announces its operational and financial results for the first quarter (“Q1/24”) at its
Minera Don Nicolas (“MDN”) gold project in Santa Cruz Province, Argentina and for its ongoing
activities at the Monte Do Carmo gold project in Brazil and Mont Sorcier Iron Project in Quebec.
Production results for MDN were previously released on April 30, 2024. The Company’s financial
results are reported and available on SEDAR as well as on the Company’s website
(www.cerradogold.com). As previously disclosed, the filing of the company’s financial results were
delayed as a result of delays in filing the annual statements. The Company has now applied to the
Ontario Securities Commission for removal of the cease trade order and is expecting a response
shortly.
Q1/24 MDN Highlights:
• Q1/24 production of 11,204 Gold Equivalent Ounces (“GEO”) and Q1 AISC of $2,045 per
ounce.
• Q1 Adjusted EBITDA of $3.0 million loss due to lower production and higher operating
costs per ounce in the first two months before accessing higher grades in the new
Calandrias Norte pit during March.
• Total production in April of 6,641 GEO and 5,486 GEO in May
• Calandrias Norte produced 6,150 GEO in April, 4,500 GEO in May and is expected to
hold at these levels until around year end.
• Ramp-up of production from the Las Calandrias Heap Leach on track, delivering
approximately 1,000 GEO per month from May.
• Cashflow and proceeds of asset sales are now starting to improve the balance sheet, with
the working capital position expected to improve during Q2 2024.
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The Company produced 11,204 gold equivalent ounces and sold 10,331 gold equivalent ounces
during Q1 2024.
Production was lower than planned during January and February as the company transitioned to full
operation in the new Calandrias Norte pit. Production levels have stabilized since March 2024, when
5,747 GEO were produced, a further 6,641 GEO in April and 5,486 GEO in May from both Calandrias
Norte and Calandrias Sur. Future production at Calandrias Norte is expected to stabilize at ~4,000 -
4,500 GEO per month, with additional production delivered from the heap leach operation.
At the Calandrias Sur heap leach project, the crushing plant is now operating as expected, which has
resulted in a more consistent feed to the heap leach pad, improving overall performance and
resulting in 1,132 GEO produced during the quarter. Production is currently running at ~1,000 GEO
per month and is expected to reach approximately 2,000 GEO per month for the month of July.
Cerrado’s MDN operations are now starting to benefit from the completion of its recent
expansionary capital expenditure program s and are positioned to generate significant cash flows
during the remainder of the year . Combined with additional funds from the Monte Do Carmo
(“MDC”) transaction, the Company is focused on strengthening the balance sheet by paying down
payables and reducing our short-term notes at MDN as well as reducing liabilities at the Corporate
level.
As outlined previously , the focus of the Company in the medium term continues to be securing
existing cashflows and generat ing sufficient cash to enhance the overall financial position of the
Company. As part of this process, the Company is reviewing the merits of repositioning the mine to
solely a heap leach operation for the short to medium term. This would entail a proposed doubling
of the current heap leach capacity to sustain a robust production profile for the next several years.
During this period, exploration programs will be targeted to continue to grow the existing high-grade
ore resources through both open pit and u nderground targets that are currently being delineated.
The Company is on track to release a n NI 43 -101 Resource Update and a Preliminary Economic
Assessment for the revised near term mine plan at MDN in early Q3 of 2024.
At the Mont Sorcier iron and vanadium project , owned by Cerrado’s wholly owned subsidiary
Voyager Metals Inc., a successful metallurgical testing program completed during Q1 has resulted
in a high grade/purity DRI product being produced (See PR March 1, 2024 ). While further
optimization is ongoing, the results to date suggest the project can produce a High Purity +67% DRI
concentrate with low impurities. The company continues to progress discussions with various
parties to support accelerating project development, however, at this time , the timeline to deliver
the Feasibility study is under review.
As previously announced, the Company has now filed proxy related materials in relation to the
annual and special meeting of shareholders set for June 27 th, 2024. Amongst other items, the
principal purpose of the meeting is to approve the sale of an option over the MDC project to a wholly
owned subsidiary of Hochschild Mining PLC.
Mark Brennan, CEO and Chairman commented, "Despite a slow start to the quarter before entering
the higher grades at Calandrias Norte, both the CIL and Heap Leach operations are now performing
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well, while the winter months typically produce challenges in Santa Cruz , we expect production to
remain stable allowing the company to significantly reduce debt levels over the remainder of 2024
and into 2025”.
Table 1. Q1 2024 Operational and Financial Performance
The Company generated revenue of $20.4 million for the first quarter ended March 31, 2024, from
the sale of 10,120 ounces of gold and 18,749 ounces of silver at an average realized price per gold
Key Operating Information Unit 2024 2023
Operating Data
Ore Mined ktonnes 85.27 73.06
Waste Mined ktonnes 2,617.52 1,391.36
Total Mined ktonnes 2,702.79 1,464.42
Strip Ratio waste/ore 30.70 19.04
Mining rate ktpd 30.03 16.27
Ore Milled ktonnes 90.07 97.65
Head Grade Au g/t 3.65 4.59
Head Grade Ag g/t 10.21 5.71
Recovery Au % 88% 92%
Recovery Ag % 56% 67%
Mill Throughput tpd 1,001 1,085
Gold Ounces Produced oz 10,982 13,794
Silver Ounces Produced oz 19,687 13,301
Gold Equivalent Ounces Produced oz 11,204 13,951
Gold Ounces Sold oz 10,120 16,005
Silver Ounces Sold oz 18,749 15,349
Gold Equivalent Ounces Sold oz 10,331 16,255
Average realized price and Average realized margin
Metal Sales $ 000's 20,376 27,499
Cost of Sales $ 000's 23,567 20,697
Gross Margin from Mining Operations $ 000's (3,191) 6,802
Average realized price per gold ounce sold (1) $/oz 1,970 1,696
Total cash costs per gold ounce sold (1) $/oz 2,042 1,139
Average realized margin per gold ounce sold (1) $/oz (72) 558
Total Direct Operating Costs (1) $ 000's 19,778 15,164
Royalties and production taxes (1) $ 000's 891 3,060
Total Cash Costs (1) $ 000's $20,669 $18,224
Total direct operating costs per gold ounce sold (1) $/oz 1,954 947
Royalties and production taxes per gold ounce sold (1) $/oz 88 191
Total cash costs per gold ounce sold (1) $/oz $2,042 $1,139
AISC - Minera Don Nicolas (1) $/oz $2,045 $1,145
(1) This is a non-IFRS performance measure, see non-IFRS Performance Measures
Three months ended March
Corporate Financial Highlights Unit 2024 2023
Financial Data
Total revenue $ 000's 20,376 27,499
Mine operating expenses $ 000's 23,567 20,697
Income (loss) from mining operations $ 000's (3,191) 6,802
Net loss $ 000's (7,278) (7,438)
Adjusted EBITDA (1) $ 000's (3,010) 8,216
Operating cash flow before movements in working capital (1) $ 000's 1,024 12,590
Operating cash flow $ 000's 3,687 17,313
Cash and cash equivalents $ 000's 7,165 18,561
Working capital (deficiency) $ 000's (81,045) (15,383)
Capital Expenditures $ 000's 4,340 8,163
(1) This is a non-IFRS performance measure, see non-IFRS Performance Measures
Three months ended March
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ounce sold of $1,970. For the first quarter ended March 31, 2023, the Company generated revenue
of $27.5 million from the sale of 16,005 ounces of gold and 15,349 ounces of silver at an average
realized price per gold ounce sold of $1,696.
Cost of sales for the first quarter ended March 31, 2024, was $23.6 million as compared to $20.7
million for the quarter ended March 31, 2023. The Company incurred $4.7 million higher production
costs for the first quarter ended March 31, 2024, due primarily to higher labour costs.
All in Sustaining Costs (including royalties) per ounce sold were $2,045 per ounce in the first quarter
ended March 31, 2024, as compared to $1,145 per ounce for the first quarter ended March 31, 2023
a $900 per ounce increase (refer to reconciliation of Non -IFRS performance metrics). The increase
is a result of lower production rates and thus higher production costs per ounce incurred in 2024 as
compared to 2023.
Net loss for the first quarter ended March 31, 2024, was $7.3 million as compared to a $7.4 million
net loss for the first quarter ended March 31 2023. The decrease in net loss is primarily a result of
lower other expenses and income and mining taxes, offset by lower revenues and higher production
costs.
The Company incurred general and administrative expenses of $2.4 million for the first quarter
ended March 31, 2024, as compared to $3.4 million of general and administrative expenses incurred
during the first quarter ended March 31, 2023. For the three months ended March 31, 2024, there
was a decrease in salaries and wages of $1.3 million.
Other expense of $1.2 million during the first quarter ended March 31, 2024, includes finance
expense of $1.4 million, loss on fair value remeasurement of MDN stream obligation of $1.9 million,
and loss on fair value remeasurement of MDC secured note and stream obligation of $1.9 million
offset by a foreign exchange gain of $3.7 million.
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 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, Argentin a, and the highly prospective
Monte Do Carmo development project, located in Tocantins State, Brazil. In Canada, Cerrado Gold
is developing it's 100% owned Mont Sorcier Iron Ore and Vanadium 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
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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 Iron Ore and Vanadium 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
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expectations reflected in forward-looking statements are reasonable, it can give no assurance that
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Accordingly, readers should not place undue reliance on the forward -looking statements and
information contained in this press release. Excep t as required by law, Cerrado disclaims any
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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.