Cerrado GOLD Announces Q4 and Annual 2023 GOLD Production Results FOR Its Minera Don Nicolas MINE IN Argentina
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January 24, 2024 www.cerradogold.com
CERRADO GOLD ANNOUNCES Q4 AND ANNUAL 2023 GOLD PRODUCTION RESULTS FOR
ITS MINERA DON NICOLAS MINE IN ARGENTINA
TORONTO, ONTARIO - Cerrado Gold Inc. [TSX.V: CERT][OTCQX: CRDOF] "Cerrado" or the
"Company") announces production results for the fourth quarter of 2023 ("Q4 2023") from the
Minera Don Nicolas Mine in Santa Cruz Province, Argentina ("MDN"). Full financial results are
expected to be released in late April 2024.
Q4 Operating Highlights
• Q4 2023 GEO production of 15,202 ounces and annual GEO production of 51,688 ounces
for 2023.
• Ramp-up of production from the Las Calandrias heap leap project continues; commercial
production delayed to end of Q1 2024.
• Pre-strip at Calandrias Norte largely complete and higher-grade ore beginning to feed the
mill.
• Major capital programs at MDN complete, with current focus on delivering cashflow,
rebuilding the balance sheet and longer-term exploration and mine life extension.
Operational results presented for Q4 2023 continued to be impacted by the slower than expected
ramp-up of the Calandrias Heap Leach project during the quarter while a new crushing system was
installed. The crushing unit is now operational, and mining rates are reaching planned capacity.
Production is set to ramp-up over the first quarter of 2024 and achieve nameplate production
rates from April thereafter. At Calandrias Norte, stripping activities were largely completed during
the quarter and the pit is now beginning to deliver ore to the CIL plant at Martinetas. Ore is
expected to fill the mill by mid-February onward. Head grades from Calandrias Norte are
reconciling well with the model and grades are expected to increase as early benches are mined
and deeper, higher grade levels accessed.
While production levels have begun to improve, the delay in the ramp up of the heap leach
operations, the costs associated with stripping at Calandrias Norte and debt repayment associated
with capital projects have had an impact on the financial performance at MDN. Newly introduced
fiscal policies that have resulted in hyper-inflation have also had a significant impact on the
operations of the business particularly as suppliers react to the new fiscal regime in Argentina.
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Mark Brennan, CEO and Chairman commented, "While the second half of the year has been
challenging starting with unusually harsh winter conditions in August resulting in a slower ramp up
at the heap leach, we see operations at MDN positioned to turn the corner in February as we
access higher grade ore from Calandrias Norte and the leach cycle at Las Calandrias normalizes.
That said, recent changes to fiscal policies in Argentina have resulted in a highly inflationary
environment, impacting operations as costs have increased and suppliers have reduced payment
terms. The focus at MDN will move to generating cashflow from our capital investments in 2023
that allow us to rebuild the balance sheet and refocus our efforts on exploration and increasing the
overall life of mine at MDN."
Stripping at Calandrias Norte continued during the quarter. The Pre-Strip is now largely complete
allowing for fresh ore to fully feed the mill.
Ore milled increased during the fourth quarter as operations normalized. Production rates
improved in Q4 as the operating environment returned to normal. However, additional gold
production expected from the heap leach has been limited in the 4th quarter as irrigation was
paused to allow for the completion of the installation of the new crushing circuit. Total production
from the heap leach in the 4th quarter was 531 ounces. Please see Table 1. for a summary of key
highlights for the fourth quarter and full year 2023. Sales for the quarter were slightly higher than
production due to timing differences.
Ongoing work to optimize mine sequencing and exploration work to upgrade and define new
sources of resources remains the key focus of development at MDN. The operations team is
focused on numerous new growth projects aside from expanding current open pit resources,
including the completion of the ramp up of Las Calandrias Heap Leach operation and the review of
a potential new Heap Leach operation at Martinetas.
Table 1. Key Operating Information
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Monte Do Carmo Update
At the Company's Monte Do Carmo ("MDC") project in Brazil, as announced on December 15th,
Cerrado filed its 43-101 Updated Feasibility Study Technical Report for MDC ("FS") with an
updated After-Tax NPV5% of US$390 Million and IRR of 34%. A Summary of the results of the FS are
summarized in Table 1. Below. The License of Installation/Construction ("LI") is expected to be
granted during the Q1 2024.
Table 1.
Summary of Key Results and Overall Project
Economics Production Units Value
Steady State Throughput Mtpa 1.92
Average Annual Production K oz per annum 95,212
Life of Mine Years 9.0
Life of Mine Au Recovery % 95.64
Total Ore Mined - Open Pit Mt 14.3
LOM Average Stripping Ratio x 7.84
Total Ore Mined - Underground Mt 2.5
Total Recovered Gold (Payable) Ounces 856,905
Operating Costs Units Value
Mining US$/tonne 17.01
Processing US$/tonne 9.11
Water and Tailings Management US$/tonne 1.45
G&A US$/tonne 2.21
Total Cash Costs US$/oz 583.7
AISC US$/oz 686.6
Capital Expenditure Units Value
Initial Capital US$ M 165.6
Contingency US$ M 15.8
Total Upfront Capital US$ M 181.4
Sustaining Capital US$ M 66.0
Closure Costs US$ M 15
Total Capital US$ M 262.4
Financial Results Units Value
Pre-Tax NPV US$ M 466
Pre-Tax IRR % 37
Pre-Tax Payback Period Years 2.0
After Tax NPV US$ M 390
After Tax IRR % 34
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After Tax Payback Period Years 2.1
Assumptions Units Value
Gold Price US$/oz 1,750
Discount Rate % 5.0
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, Argentina, 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
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 Brazil, Cerrado is rapidly advancing the Serra Alta deposit at its Monte Do Carmo Project,
through feasibility and into production. Serra Alta is expected to be a high-margin and high-return
project with significant exploration potential on an extensive and highly prospective 82,542
hectare land package.
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 decarbonisation of the industry and the achievement of SDG goals.
For more information about Cerrado please visit our website at: www.cerradogold.com.
Mark Brennan Mike McAllister
CEO and Chairman Vice President, Investor Relations
Tel: +1-647-805-5662
Disclaimer
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ADEQUACY OR ACCURACY OF THIS RELEASE.
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. In making the forward- looking statements
contained in this press release, Cerrado has made certain assumptions, including, but not limited to
the ramp-up of the Calandrias Heal Leach project, stripping activities and head grades at
Calandrias Norte, expectations regarding MDN operations and financial performance generally,
and expectations regarding permitting at Monte Do Carmo including granting of the LI. Although
Cerrado believes that the expectations reflected 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 not place undue reliance
on the forward-looking statements and information contained in this press release. Except as
required by law, Cerrado 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.