Cerrado GOLD Reports Q1 Cashflow and Operating Performance at Its Minera Don Nicolas MINE
May 31, 2023 www.cerradogold.com
CERRADO GOLD REPORTS Q1 CASHFLOW AND OPERATING PERFORMANCE AT ITS MINERA DON
NICOLAS MINE
• Q1 Production of 13,951 Gold Equivalent Ounces (“GEO”)
• Q1 Adjusted EBITDA of $8.2 million and operating cash flow of $17.3 million
• Q1 AISC of $1,145 per ounce
(All numbers reported in US dollars)
TORONTO, ONTARIO - Cerrado Gold Inc. (TSX.V: CERT) (OTCQX: CRDOF ) (“Cerrado” or the
“Company”) is pleased to announce the operational and financial results for the first quarter 2023
(“Q1/23”) at its Minera Don Nicolas (“MDN”) gold project in Santa Cruz Province, Argentina and
report on its ongoing activities at the Monte Do Carmo gold project (“MDC”) in Brazil. Production
results at MDN were previously released on April 24, 2023. The Company’s quarterly financial results
are reported and available on SEDAR as well as on the Company’s website (www.cerradogold.com).
Q1 2023 Minera Don Nicolas (“MDN”) Operational Highlights:
• Gold production of 13,951 GEO in Q1/23, a 3% improvement year-on-year (“yoy”)
• Operating margin of $6.8 million and operating cash flows of $17.3 million in the first quarter
• AISC of $1,145 per ounce during Q1/23
Mark Brennan, CEO and Chairman , stated: “These results demonstrate another solid quarter of
production and operating performance from the team at MDN. We are now looking forward to the
next stage of growth at MDN from the ramp up of our initial heap leach project at Las Calandrias
which is on schedule for first gold production in June. In addition, work to complete the feasibility
study at the Monte Do Carmo project in Brazil is progressing well, with completion expected in June.
We expect the feasibility study to demonstrate the significant value of MDC as well as highlight the
robust growth profile we expect to see in the coming years.”
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First Quarter 2023 Operational and Financial Performance
Q1/23 and Full Year Operational Highlights
Minera Don Nicolas
The Company produced 13,951 GEO during the three months ended March 31, 2023, as compared
to 13,388 GEO in the three months ended March 31, 2022. Production was 3% higher in the three
months ended March 31, 2023, due to higher recoveries.
Key Operating Information Unit 2023 2022
Operating Data
Ore Mined ktonnes 73.06 89.22
Waste Mined ktonnes 1,391.36 879.12
Total Mined ktonnes 1,464.42 1,224.66
Strip Ratio waste/ore 19.04 9.85
Mining rate ktpd 16.27 10.76
Ore Milled ktonnes 97.65 98.67
Head Grade Au g/t 4.59 4.68
Head Grade Ag g/t 5.71 14.85
Recovery Au % 92% 89%
Recovery Ag % 67% 58%
Mill Throughput tpd 1,085 1,096
Gold Ounces Produced oz 13,794 13,007
Silver Ounces Produced oz 13,301 27,107
Gold Equivalent Ounces Produced oz 13,951 13,388
Gold Ounces Sold oz 16,005 14,622
Silver Ounces Sold oz 15,349 32,866
Gold Equivalent Ounces Sold oz 16,255 15,044
Average realized price and Average realized margin
Metal Sales $ 000's 27,499 27,384
Cost of Sales $ 000's 20,697 18,210
Gross Margin from Mining Operations $ 000's 6,802 9,174
Average realized price per gold ounce sold (1) $/oz 1,696 1,819
Total cash costs per gold ounce sold (1) $/oz 1,139 1,049
Average realized margin per gold ounce sold (1) $/oz 558 770
Total Direct Operating Costs (1) $ 000's 15,164 12,427
Royalties and production taxes (1) $ 000's 3,060 2,910
Total Cash Costs (1) $ 000's $18,224 $15,337
Total direct operating costs per gold ounce sold (1) $/oz 947 850
Royalties and production taxes per gold ounce sold (1) $/oz 191 199
Total cash costs per gold ounce sold (1) $/oz $1,139 $1,049
AISC - Minera Don Nicolas (1) $/oz $1,145 $1,123
(1) This is a non-IFRS performance measure, see non-IFRS Performance Measures
Three Months Ended March 31
Corporate Financial Highlights Unit 2023 2022
Financial Data
Total revenue $ 000's 27,499 27,384
Mine operating expenses $ 000's 20,697 18,210
Income from mining operations $ 000's 6,802 9,174
Net income (loss) $ 000's (7,438) 3,352
Adjusted EBITDA (1) $ 000's 8,216 9,669
Operating cash flow before movements in working capital (1) $ 000's 12,590 6,492
Operating cash flow $ 000's 17,313 8,780
Cash and cash equivalents $ 000's 18,561 26,127
Working capital (deficiency) $ 000's (15,383) 6,820
Capital Expenditures $ 000's 8,163 1,965
(1) This is a non-IFRS performance measure, see non-IFRS Performance Measures
Three Months Ended March 31
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The average quarterly gold head grade of 4.59 g/t recorded in the first quarter of 2023 represents a
2% decrease as compared to the average head grade of 4.68 g/t in the first quarter of 2022 . Gold
recovery of 9 2% represents a 4% increase in recovery as compared to 88% recorded in the first
quarter of 2022. Silver recovery of 67% was also 4% higher than the silver recovery achieved in the
first quarter of 2022.
During Q1/2023, the team continued exploration efforts to advance several green and brownfield
targets with the aim of increasing mine life and expanding the overall resource endowment, while
continuing to support the move to underground mining at Paloma.
Las Calandrias Project
During Q1/2023, work on the engineering and construction of the Las Calandrias heap leach project
was completed and p lacement of ore on to the pad commenced in April 2023 . The first gold
production is expected in June 2023. The Calandrias Heap Leach is expected to add in cremental
production to MDN commencing in 2023 and is the first step in Cerrado’s plans for growing
production capacity in Argentina in the near term. All Argentinian projects continue to be funded by
cash flow and local debt facilities.
Monte Do Carmo Project, Brazil
During Q1/2023, the Company, together with its numerous advisors , continued to progress the
completion of a bankable feasibility study (“FS”) expected by the end of June 2023. In addition,
regional exploration continues on the greater project area aimed at growing the known resources
and extending the potential mine life . During the quarter , the exploration focus has been on the
Northern extension of the Serra Alta deposit and to the north of Gogo, as well as on generating more
greenfield targets such as Divisa for ongoing development.
The Preliminary License (“LP”) was issued from the Instituto Natureza do Tocantins (“NATURATINS”)
on May 29, 2023 and the License of Installation/Construction (“LI”) is expected to follow within 90
-120 days of the LP issuance.
Q1/2023 Financial Highlights
The Company generated revenue of $27.5 million for the three months ended March 31, 2023, from
the sale of 16,255 GEO at an average realized price per gold ounce sold of $1,696 and price per silver
ounce sold of $22.83. For the three months ended March 31, 2022, the Company generated revenue
of $27.4 million from the sale of 15,044 GEO. Revenue from sales of gold and silver for the current
period was slightly higher than the three months ended March 31, 2022, due to the higher number
of ounces sold, offset by the lower realized price in the current period due to a one-time deferred
revenue adjustment of $2.4 million recorded in Q1/2023 . Revenue for the quarter without the
deferred revenue adjustment was $29.9 million.
Cash costs per ounce sold w ere $1,139 per ounce in the three months ended March 31, 2023, as
compared to cash costs per ounce sold of $ 1,049 per ounce in the three months ended March 31,
2022, a 9% increase. The 9% increase is a result of higher consumables and material costs compared
to the first quarter of 2022.
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Cash provided by operating activities during the first quarter ended March 31, 2023 , was $17.3
million compared to cash provided by operating activities of $8.8 million for the first quarter ended
March 31, 2022. Cash provided by operating activities before working capital changes in 2023
consisted of $12.6 million as compared to $6.6 million of cash provided by operating activities before
working capital changes in 2022.
Adjusted EBITDA was $8.2 million in the first quarter of 2023 as compared to $9.7 million in the first
quarter of 2022. Current year adjusted EBITDA was slightly lower due to higher production and
general and administrative costs, offset by higher cash sales in Q1/2023.
Net loss for the three months ended March 31, 2023 was $7.4 million, as compared to a $3.4 million
net income for the three months ended March 31, 2022, a difference of $10 million. The decrease
in net income is primarily a result of a n increase in tax expense of $ 2 million, a non -cash
remeasurement loss on the secured notes and stream of $2.6 million, an increase in finance expense
of $2.2 million and an increase in general and administrative expenses of $1.6 million recorded in
the first quarter of 2023 as compared to the first quarter of 2022.
Basic and diluted loss per share for the three months ended March 31, 2023, was $0.09, compared
to the basic and diluted earnings per share of $0.04 for the three months ended March 31, 2023, a
$0.13 per share decrease as a result of higher taxes, remeasurement loss on the secured notes and
stream obligation and higher general and administrative costs.
Mark Brennan Mike McAllister
CEO and Chairman Vice President, Investor Relations
Tel: +1-647-796-0023 Tel: +1-647-805-5662
[email protected] [email protected]
About Cerrado Gold
Cerrado is a Toronto based gold production, development and exploration company focused on gold
projects in the Americas. The Company is the 100% owner of both the producing Minera Don Nicolás
mine in Santa Cruz province, Argentina, and the highly prospective development project, Monte do
Carmo located in Tocantins State, Brazil.
Disclaimer
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DEFINED IN POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE
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
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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 Cer rado. In making the forward -looking statements
contained in this press release, Cerrado has made certain assumptions, including, but not limited to
the expected timing of commencement of gold production at Las Calandrias, the expectations of
2023 results as well as timing of completion of the FS and permitting milestones at the MDC project.
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. Suc h 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. E xcept 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 fact ors affecting such forward -looking statements or
otherwise.