CERT.V · 2021-08-23 12:00:00

Cerrado GOLD Reports After Tax NPV5% of US$617 Million and After Tax IRR of 94.8% FOR Its Preliminary Economic Assessment at Its Monte Do Carmo GOLD Project IN Brazil

Economic Studies

August 23, 2021 www.cerradogold.com

CERRADO GOLD REPORTS AFTER TAX NPV5% OF US$617 MILLION AND AFTER

TAX IRR OF 94.8% FOR ITS PRELIMINARY ECONOMIC ASSESSMENT AT ITS

MONTE DO CARMO GOLD PROJECT IN BRAZIL

• Average annual gold production of 149,000 ozs over first 5 years and 131,000 ozs over LOM 8

years

• Annual Average Free cash flow of US$150 million over the first 5 years at US$1,600 Au

• Total cumulative, after tax, free cash flow estimated US$901 million over 8 years

• Average AISC of US$431/oz over the first 5 years

• Low Initial Capex of US$126 million (including US$25 million contingency)

• Payback of 1.3 years

• Further upside potential from continued exploration drilling & resource expansion

• Development program including Feasibility Study to begin immediately

PEA Summary Results

2021

$ millions $617

% 94.8%

US$/oz Au $1,600

$ millions $126

Life of Mine years 8

years 1.3

LOM average annual production koz 131.0

LOM annual tonned mined MM tonnes 2.600

$/t $33.04

US$/oz Au $583

US$/oz Au $612

Sustaining LOM Capital $ millions 13.5

LOM Stripping Ratio waste:ore 10.9:1

Royalties % 1%

$ millions $16.78

Avg Cash Cost

Avg LOM AISC

Payback time (years)

Mine Closure

PEA Summary Table

All Figures in US$ unless otherwise noted

NPI @ 5% After Tax

IRR After Tax

Long Term Gold Price (US$/troy oz.)

Initial Capex

Opex

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TORONTO, ONTARIO – CERRADO GOLD (TSX.V: CERT) (OTCQX: CRDOF) ("Cerrado" or the "Company”) is

very pleased to announce the results of its new NI 43-101 Preliminary Economic Assessment (“PEA”) based

upon the recently expanded 43 -101 resources defined at the Serra Alta deposit at its Monte do Carmo gold

project in Tocantins State, Brazil. The work has been completed by GE21 Consultoria Mineral Ltda (“GE21”)

and is based upon the NI 43-101 Mineral Resource Estimate produced by MICON International dated July 21,

2021. The final PEA report is expected to be completed and available on SEDAR by the end of September

2021.

Mark Brennan, CEO of Cerrado Gold commented “We are extremely pleased with the results of the PEA. The

results demonstrate the tremendous economic potential offered by the development of the Serra Alta deposit

as the initial cornerstone operation at our Monte do Carmo project . We continue to explore Serra Alta and

regional satellite analogue deposits to determine the full potential of the Monte do Carmo gold district.” He

continued “The robust production and cash flow generation in the initial years allows for a rapid pay back and

generates significant cash flows to continue to grow the resource potential to materially extend the mine life”.

Project Summary

The Monte do Carmo (MDC) Gold Project is located in the state of Tocantins, Brazil; 2 kilometres east of the

town of Monte do Carmo which is 40Km from Porto Nacional (50,000 inhab itants) and 100Km from Palmas ,

the Capital of Tocantins State (250,000 inhab itants). The Serra Alta deposit has been the main focus of

exploration at the project until recently where Cerrado has drilled numerous analogue satellite deposits to

expand the existing resource . The project has g ood access to all necessary infrastructure: paved roads,

energy, a 69 kV electric power line, water supply and an international airport, and is well supported by the local

community.

Mining

The mine design is based on standard open pit mining techniques of drill, blast and haul using contract mining

to reduce upfront capital needs. Based upon the newly expanded resource, GE21 has designed a mine plan

which extracts approximately 18.5 millio n tonnes of the current resource base over an 8 -year mine life at an

average strip ratio of 6.64 for the first 5 years and 10.9 to 1 over the life of mine. The Phase I exploratory

drilling program completed earl ier this year, increased the mineral resourc es model mainly to the North and

East, resulting in the extension of the Projected Open Pit in the same direction resulting in a slightly higher

strip ratio than the prior PEA , but significantly increasing recoverable ounces. Mining will reach nominal ore

feed to mill in year 2 of approximately 2.6 million tonnes. Mining costs are estimated at US $1.70/t of material

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moved which is based on current costs at other regional operations. The annual mining costs reflect adjusted

haul distances and waste/ore ratios relative to the previous PEA completed in 2020 and as shown below.

2020 Projected Pit Shell PEA GE21 2021 Projected Pit Shell PEA GE21

Metallurgy and Processing

Cerrado completed additional metallurgical test work to advance previous strong results. The a dditional

metallurgical test work, based on 300 kg samples , once again confirmed the recoverability of gold by gravity

concentration and tailing flotation followed by CIP leaching of float concentrate. The results of the test work

confirmed the metallurgical recovery of up to 98.5% of which approximately 79% is recovered by gravity. The

final leached tailings will be submitted to detox circuit before sending it to final disposal. The high percentage

of gold recovered by gravity allows for a simple design layout with limited CIP leaching capacity required, which

significantly reduces up front capital requirements . Metallurgical te st work also indicates that the waste rock

and detoxed tailings are neutral by nature, which points to very amenable disposal of mineral residues making

it easier to deploy environmentally and more affordable.

Infrastructure

The site is ideally located with access to all -weather roads, water, 69 kV electrical power grid and sufficient

power to support project development with only modest infrastructure capital expenditures to develop the

operations. In addition, the site is close to numerous large population centres to provide skilled workforce and

auxiliary services to the operation. The local municipality of Monte do Carmo , where the mine will be built ,

provides basic health services as well as schooling that can easily be improved. Porto Nacion al and the state

capital Palmas, are within 45km and 100km respectively, and can also provide comprehensive services.

Capital Costs

Upfront capital costs are estimated at US$125.9 million plus US$8.8 million working capital , and US$13.5

million of sustaining capital over the 8 year mine life. Pay back is in the order of 1.3 years with an after-tax IRR

of 94.8%. Capital costs include a 25% contingency for equipment, plant and infrastructure and assumes the

use of contract mining negating the need for the acquisition of a mining fleet given the relatively short mine life

presented with current resources.

Capital Cost

Mine and Infrastructure US$MM 10,687,666

Processing Plant US$MM 90,000,000

Contingency (25%) US$MM 25,171,917

Total 125,859,583

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Operating Costs

The LOM operating costs are estimated at a total of US$ 33.04/t of ore processed (US$25.68/t over the first

five years), benefiting from the free gold in the ore – no refractory ore has been identified. Based on test work

to date, costs will benefit from the outstanding gravity recoveries which indicate a simple processing circuit

lowering overall costs. Due to the amenable characteristics of both waste rock and tailings , dry stacking and

co-disposal of tails is applicable . The overall jurisdiction and good logistics are beneficial for both labor and

consumables.

Production and Cash/ AISC Cost Profile

The chart below highlights the expected production AISC cost profile at Serra Alta as per the PEA. Production

in the early years is expected to benefit from materially higher grades and peak in year three at 193,000 ozs .

Production over the mine life averages 131,00 ozs per year but averages approximately 150,000 ozs per year

over the first five years. Similarly , cash costs are expected to average US$582/oz over the life of mine but

average only US$404/ozs over the first five years while LOM AISC will average US$612 per year and

US$431/oz over the first five years.

Production and AISC Cost Profile

Operating Costs

Mining Cost/tonne rock US$/t $1.70

Mining Costs per tonne milled US$/t $20.11

Milling Costs US$/t $11.23

G&A Costs US$/t $1.70

Total US$/t $33.04

$0.00

$200.00

$400.00

$600.00

$800.00

$1,000.00

$1,200.00

100

150

200

250

1 2 3 4 5 6 7 8

AISC US$/oz

Gold Production 000's ozs

Annual Production and All In Sustaining Costs/oz

Annual Production (000's ozs) AISC per oz (RHS)

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Overall Project Economics

The Monte do Carmo project shows a potentially extremely robust economic opportunity with an after tax NPV

at 5% discount rate of US$617 million and IRR of 94.8% at a flat gold price of $1, 600/oz. Project economics

are based on a potential 8-year mine life with a 1.3-year payback period, w ith positive after -tax cash flow

commencing in Year 1. Total cumulative, after-tax free cash flow over the life of mine is estimated at US$762

million at a $1,600/oz gold price. The mine is expected to benefit from regional tax incentives in Brazil .

The chart below demonstrates the robust free cash flow generation expected, especially in the first five years

of operation. Cash flows during the first five years of production are estimated to average US$150 MM per

annum.

The chart below highlights the NPV sensitivity to changes in capital costs, various input costs and gold price

assumptions

Project Economic Summary

Average Gold Price US$/oz $1,600

NPV 5% US$MM $617

IRR % 94.8%

Average Cash Cost US$/oz $583

AISC (inlcuing closure costs) US$/oz $612

Payback years 1.3

-$200,000

-$100,000

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

$800,000

$900,000

-$200,000

-$150,000

-$100,000

-$50,000

$50,000

$100,000

$150,000

$200,000

$250,000

0 1 2 3 4 5 6 7 8

Cumulative Free Cash flow

Annual Free Cash Flow

Free Cash Flow Evolution

Annual After Tax Free Cash Flow Cumulative After Tax Free Cash Flow (RHS)

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Mineral Resource Estimate

The PEA is based on the current NI 43 -101 compliant Mineral Resource Estimate completed by MICON

International Limited, with an effective date of July 21, 2021. It should be noted that Mineral resources which

are not mineral reserves do not have demonstrated economic viability. It should also be noted drilling continues

at Serra Alta to further expand and upgrade the resource as the company makes plans to move towards

feasibility. In addition to Serra Alta the company is also undertak ing a more regional exploration program on

the larger Monte Do Carmo property to define potential satellite deposits which could significantly enhance the

mine life of the installed asset base

The significant addition on mineral resources and the rise on confidence l evel represented by the maiden

indicated resources are supported by the total amount of drilling invested and numerous technologies

implemented on site; Oriented cores, structural data collection, low angle rigs , electronical cloud drilling

database allows to extract the maximum information of the cores and makes the drilling program more efficient.

Table 1. Serra Alta Mineral Resource Statement – Effective Date July 21, 2021

Mining Method Cut-off Grade

(g/t Au)

Resource