Cerrado GOLD Announces Q4 Financials and Full-Year Production, Cashflow and Operating Cost Performance Results FOR Its Minera Don Nicolas MINE IN Argentina
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June 13, 2024 www.cerradogold.com
CERRADO GOLD ANNOUNCES Q4 FINANCIALS AND FULL-YEAR PRODUCTION, CASHFLOW
AND OPERATING COST PERFORMANCE RESULTS FOR ITS MINERA DON NICOLAS MINE IN
ARGENTINA
• Filing of Annual Financial Statements satisfies conditions to receive the US$7 million Third
Advance from Hochschild
• 1st Quarter 2024 Financial Statements expected to be filed by the end of June
• MDN production for March, April and May exceeded 17,000 ounces, supporting the
ongoing turnaround of operations at MDN
TORONTO, ONTARIO – Cerrado Gold Inc. [TSX.V: CERT][OTCQX: CRDOF] (“Cerrado” or the
“Company”) is pleased to announce operational and financial results for the fourth quarter
(“Q4/23”) and year-end 2023 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 January 24, 2024. The Company’s annual
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 operational and
financial results were delayed due to the Company and its auditors, KPMG LLP, requiring additional
time to complete the audit and quality control procedures. The Company notes that there have been
no disagreements between the Company and the auditor regarding any matter of accounting
principles or practices, financial statement disclosure , or auditing scope or procedures during this
process. Filing of the Company’s Q1/2024 results is anticipated by the end of June, 2024.
The Company is also pleased to announce it has appointed Santiago Abbruzzini as a Senior
Accountant to supplement the existing accounting team at Minera Don Nicolas, Argentina. Mr.
Abbruzzini has over 17 years of auditing experience with KPMG in Argentina.
Q4/23 and Full Year 2023 MDN Highlights:
• 2023 Annual production of 52,230 Gold Equivalent Ounces (“GEO”)
• Q4 Adjusted EBITDA of $0.8 million and annual adjusted EBITDA of $13.8 million
• Q4 AISC of $1,594 per ounce and annual AISC of $1,427 per ounce
• Ramp-up of production from the Las Calandrias Heap Leach was delayed due to
crusher commissioning issues; commercial production is expected Q2 2024.
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• Mining at Calandrias Norte is currently contributing higher-grade ore feed to the mill;
which is expected to improve production levels moving forward.
• Focus remains on delivering cashflow and rebuilding the balance sheet with
exploration focusing on mine life extension and future growth opportunities.
The Company produced 15,744 gold equivalent ounces and sold 15,518 gold equivalent ounces
during Q4 2023. The Company continues to progress the ramp up of its new heap leach project and
is targeting full production rates by the end of June 2024. The planned ramp up was delayed due to
crushing commissioning issues, which have now been largely resolved. The continued slow ramp up
has delayed achieving full production targeted in the first quarter by approximately three months.
Stripping at Calandrias Norte continued during the quarter, with over 2.4 million tonnes of material
moved. A further 2 million tonnes were stripped in the first quarter 2024. Production levels were
lower than forecast during January and February and have stabilized since March 2024, when more
than 5, 255 gold equivalent ounces were produced for the month. Significant improvement and
benefits from access and limited future stripping required for the Calandrias Norte material ,
combined with the further ramp up of the heap leach operations , are expected during Q2 2024.
Production levels in April and May were very strong, averaging in excess of 6,000 gold equivalent
ounces per month, supporting an ongoing turnaround at MDN.
At the new Calandrias Sur heap leach project, work continued as the operation remained in the
commissioning phase during the quarter. Initial ramp up was impacted by commissioning issues with
the crusher. The finalization of the crushing plant has now been completed, which should also see
more consistent feed to the heap leach pad and improve overall performance moving forward.
Approximately 531 ounces of gold were produced in Q4 2023. Production for the 1st quarter 2024
exceeded 1,000 ounces of gold and is set to achieve nameplate production rates from June
thereafter.
Going forward into 2024 and beyond, Cerrado’s MDN operations are positioned to benefit from the
completion of its recent expansionary capital expenditure program and generate significant cash
flows. As a result of improved operations and cashflow during the second quarter , as well as
additional funds from the Monte Do Carmo (“MDC”) transaction, we continue to strengthen the
balance sheet by paying down payables and reducing our short-term notes.
As a result of events that led to the transaction related to the sale of the Monte Do Carmo project
(see press release dated March 5, 2024) , the company is currently reviewing it s various operating
plans, development programs, and capital allocation plans for 2024 and into 2025. The focus is to
secure existing cashflows and generate sufficient cash to enhance the overall financial position of
the Company. In the near term , the focus will be on maintaining production rates in Argentina ,
deleveraging the balance sheet, and reviewing the merits of repositioning the mine to solely a heap
leach operation for the short -medium term. This w ill allow exploration programs to continue to
grow the existing high-grade ore resources and more fully develop the underground potential that
is already known at MDN. The lack of liquidity in 2023 resulted in reduced exploration expenditures,
limiting available high-grade resources ready for near term mining. The company is targeting to
release an NI 43-101 Resource Update and a Preliminary Economic Assessment for the revised mine
plan at MDN in early Q3 of 2024
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At the Mont Sorcier iron and vanadium project , operated by Cerrado’s wholly owned subsidiary
Voyager Metals Inc., work continued to advance the project with several workstreams related to
permitting, the social license , and the feasibility study. Metallurgical test work resulted in an
optimized flow sheet being designed and demonstrating the ability to deliver a 67% high grade iron
ore concentrate. Work programs at Mont Sorcier have been placed on a care and maintenance
approach pending additional funding being available. The company remains in discussions with
various parties to support accelerating project development, however, at this time , the timeline to
deliver the Feasibility study is under review.
Mark Brennan, CEO and Chairman commented, "The latter part of 2023 was very challenging for
Cerrado. We commenced the year with an ambitious expansion program to build a new heap leach
at MDN and open the Calandrias Norte Pit. Ramp -up delays in conjunction with market conditions
and fiscal policy changes in Argentina led to the decision to option our MDC p roject early this year.
However, with MDN now stabilized, we aim to significantly reduce debt levels and repair the balance
sheet over 2024 and into 2025”.
Table 1. Q4 and 2023 Annual Operational and Financial Performance
Key Operating Information Unit 2023 2022 2023 2022
Operating Data
Ore Mined ktonnes 83.04 109.45 287.09 375.14
Waste Mined ktonnes 1,274.02 1,256.00 5,158.23 4,529.97
Total Mined ktonnes 1,357.06 1,365.45 5,445.32 4,905.11
Strip Ratio waste/ore 15.34 11.48 17.97 12.08
Mining rate ktpd 14.75 14.84 14.92 13.44
Ore Milled ktonnes 93.23 94.39 367.16 394.86
Head Grade Au g/t 5.57 5.83 4.61 4.56
Head Grade Ag g/t 6.48 7.39 5.59 10.97
Recovery Au % 93% 95% 91% 92%
Recovery Ag % 62% 66% 64% 64%
Mill Throughput tpd 1,013 1,026 1,006 1,082
Gold Ounces Produced oz 15,614 17,187 51,715 52,504
Silver Ounces Produced oz 11,082 14,962 42,748 95,803
Gold Equivalent Ounces Produced oz 15,744 17,360 52,230 53,672
Gold Ounces Sold oz 15,386 14,545 53,561 50,668
Silver Ounces Sold oz 11,120 12,800 44,781 95,795
Gold Equivalent Ounces Sold oz 15,518 14,787 54,100 51,923
Average realized price and Average realized margin
Metal Sales $ 000's 29,876 24,824 100,101 90,360
Cost of Sales $ 000's 28,570 17,268 86,282 70,901
Gross Margin from Mining Operations $ 000's 1,306 7,556 13,819 19,459
Average realized price per gold ounce sold (1) $/oz 1,925 1,689 1,849 1,742
Total cash costs per gold ounce sold (1) $/oz 1,590 1,003 1,418 1,192
Average realized margin per gold ounce sold (1) $/oz 334 686 431 550
Total Direct Operating Costs (1) $ 000's 21,275 12,085 65,733 50,963
Royalties and production taxes (1) $ 000's 3,194 2,498 10,231 9,436
Total Cash Costs (1) $ 000's $24,469 $14,583 $75,964 $60,399
Total direct operating costs per gold ounce sold (1) $/oz 1,383 831 1,227 1,006
Royalties and production taxes per gold ounce sold (1) $/oz 208 172 191 186
Total cash costs per gold ounce sold (1) $/oz $1,590 $1,003 $1,418 $1,192
AISC - Minera Don Nicolas (1) $/oz $1,594 $1,015 $1,427 $1,231
(1) This is a non-IFRS performance measure, see non-IFRS Performance Measures
Three Months Ended December Year ended December
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The Company generated revenue of $100.1 million for the year ended December 31, 2023, from the
sale of 53,561 ounces of gold and 44,781 ounces of silver at an average realized price per gold ounce
sold of $1,849 and an average realized silver price of $23.31 per ounce sold. For the year ended
December 31, 2022, the Company generated revenue of $90.4 million from the sale of 50,668
ounces of gold and 95,795 ounces of silver at an average realized price per gold ounce sold of $1,742
and an average realized si lver price of $21.99 per ounce sold. Revenue and sales of gold for the
current period are higher than the year ended December 31, 2022, due to higher ounces sold and
higher average realized price per gold ounce sold.
Cost of sales for the year ended December 31, 2023, were $86.3 million as compared to $70.9 million
for the year ended December 31, 2022. The Company incurred $13.7 million higher production costs
for the year ended December 31, 2023 due to higher costs of operational contractors and materials,
and higher labor costs in 2023 as compared to 2022.
Total cash costs (including royalties) per ounce sold was $1, 418 per ounce in the year ended
December 31, 2023, as compared to $1,192 per ounce for the year ended December 31 , 2022; a
$226 per ounce or 1 9% increase (refer to reconciliation of Non -IFRS performance metrics). The
increase is a result of higher production costs incurred in 2023 as compared to 2022.
Net loss for the year ended December 31, 2023, was $6.8 million as compared to a $5.9 million loss
for the year ended December 31, 2022. The increase in net loss is primarily a result of an increase in
deferred tax expense of $4.7 million.
The Company incurred general and administrative expenses of $ 13.0 million for the year ended
December 31, 2023, as compared to $8.4 million of general and administrative expenses incurred
during the year ended December 31, 2022.
Other income of $2.6 million during the year ended December 31, 2023, includes a foreign exchange
gain of $10.3 million offset by finance costs of $ 7.8 million which includes $2.9 million of non -cash
accretion expense.
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.
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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 i s 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 grad e 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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Forward-looking statements contained in this press release include, without limitation, statements
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filings, the Interim Filings and the CTO. In making the forward- looking statements contained in this
press release, Cerrado has made certain assumptions. Although C errado believes that the
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. 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.