Cerrado GOLD Reports Q3 Operating Results
-1-
November 29, 2023 www.cerradogold.com
CERRADO GOLD REPORTS Q3 OPERATING RESULTS
• Q3 Production of 10,082 Gold Equivalent Ounces (“GEO”)
• Q3 results impacted by severe weather conditions
• Operations back on track in October and November with shipments of approximately 5,600 and
5,470 GEO, respectively
• Minera Don Nicolas (“MDN”) Expansion Capital Expenditure program now largely complete
(All numbers reported in US dollars)
TORONTO, ONTARIO - Cerrado Gold Inc. (TSX.V: CERT) (OTCQX: CRDOF) (“Cerrado” or the
“Company”) announces the operational and financial results for the third quarter 2023 (“Q3/23”) at
its Minera Don Nicolas (“MDN”) gold project in Santa Cruz Province, Argentina and report s on its
ongoing activities at the Monte Do Carmo gold project (“MDC”) in Brazil. Production results at MDN
were previously released on October 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).
Q3 2023 Minera Don Nicolas (“MDN”) Financial Highlights:
• Gold production of 10,082 GEO in Q3/23, an 11% decrease year-on-year (“yoy”).
• AISC of $1,703 per ounce during Q3/23 due to difficult operating conditions seen in the
quarter resulting in lower production rates.
• Operating performance has returned to normal in October and November, with sales of
approximately 5,600 and 5,470 GEO, respectively.
• MDN capital program now largely complete, $34.3m invested in Expansion Capital year to
date to develop heap leach facility (US$23.9m), pre-stripping of Calandrias Norte (US$5.0m)
and exploration (US$5.4m).
o Expansion program largely funded via short term notes in Argentina to be rolled over to
longer maturity.
• Production expected to ramp up into 2024, generating significant cash flows to rapidly reduce
debt levels.
• Significant opportunity to see a reduction in operating costs and increased cashflow in US
dollar terms going forward should depreciation in applicable exchange rate continue post-
election.
-2-
Mark Brennan, CEO and Chairman, stated: “While these results reflect very severe winter weather
conditions resulting in lower production in Argentina, the team at MDN has rapidly enabled us to
ramp up production while completing our capital projects and expansion plans from October. With
our initial heap leach project operating and Calandrias Norte now in production, we now look to reap
the benefits of these capital investment programs moving into 2024 through increased production
and significant operating cashflow .” He added “Post-election, we remain optimistic for a more
accommodative fiscal regime providing for significant accretion to cashflow allowing us to
restructure our debt and develop a healthy balance sheet at Cerrado.”
MDN Outlook
Going forward into Q4/2023 and 2024 , Cerrado’s MDN operations are now positioned to benefit
from the completion of its recent expansionary capital expenditure program to grow production
with its new heap leach operations, while sustaining high -grade CIL production. The Company has
invested approximately US$ 23.9m to complete the Heap Leach facilities at Las Calandrias in 2023
and US$5.0m to pre -strip Calandrias Norte to access high -grade ore for the CIL plant. Exploration
spending has totaled US$5.4m and will continue into 2024 as we continue to grow the life of mine
at MDN.
Results in October and November are already demonstrating more normalized operations as a result
of these investments, with shipments for the two months totaling approximately 11,070 GEOs. With
operations returning to normal , the Company anticipates a significant improvement in cash
generation, which should be significantly enhanced with an improved fiscal policy and a more
normalized foreign exchange regime in Argentina supporting lower operating costs in US dollar
terms. While the near -term cash generati ng profile continues to improve, the Company is also
actively working to term out the maturity of its current short term debt profile and roll a significant
amount of these obligations as is customary in Argentina.
Argentinian Currency Controls
Starting October 11, 2023, by means of Joint Resolution No. 1/23 of the certain Ministries of the
Argentinian Government, exporters of gold, silver and their concentrates were allowed to settle
their exports at a preferential exchange rate resulting from settling 75% of such exports through the
Local Exchange Market and the remaining 25% through blue chip transactions ("Mining Dollar"). The
effect of the Mining Dollar allowed for an approximate 30% depreciation of local costs in dollar terms
at MDN during the month of October. While there is an attractive Mining Dollar in place currently,
there is no certainty that such preferential rates will continue . The Company is optimistic that the
election of Javier Milei as President of Argentina, will result in positive changes to the fiscal regime
in Argentina and a reduction in or eventual removal of currency controls, which could result in a
significant improvement in company cashflows in the short to medium term.
-3-
Third Quarter 2023 Operational and Financial Performance
Q3/23 and Full Year Operational Highlights Minera Don Nicolas
The Company produced 1 0,082 GEO (“Gold Equivalent Ounces”) during the three months ended
September 30, 2023, as compared to 11, 284 GEO in the three months ended September 30, 2022.
Production was 11% lower in the three months ended September 30, 2023, due to poor weather
conditions; with flooding resulting in wet feed which then froze, impacting on throughput and lower
than expected overall head grade values.
The average quarterly gold head grade of 3.19 g/t recorded in the third quarter of 2023 represents a
Key Operating Information Unit 2023 2022 2023 2022
Operating Data
Ore Mined ktonnes 55.90 84.79 204.05 265.69
Waste Mined ktonnes 1,349.28 1,265.08 3,884.21 3,273.97
Total Mined ktonnes 1,405.18 1,349.86 4,088.26 3,539.66
Strip Ratio waste/ore 24.14 14.92 19.04 12.32
Mining rate ktpd 15.27 14.67 14.98 12.97
Ore Milled ktonnes 83.37 98.92 273.93 300.47
Head Grade Au g/t 3.19 4.40 4.25 4.16
Head Grade Ag g/t 5.16 11.58 5.29 12.10
Recovery Au % 93% 91% 89% 90%
Recovery Ag % 65% 66% 65% 64%
Mill Throughput tpd 906 1,075 1,003 1,101
Gold Ounces Produced oz 9,972 11,015 36,101 35,317
Silver Ounces Produced oz 8,809 22,418 31,665 80,841
Gold Equivalent Ounces Produced oz 10,082 11,284 36,486 36,312
Gold Ounces Sold oz 11,263 10,522 38,175 36,124
Silver Ounces Sold oz 9,071 22,355 33,662 82,995
Gold Equivalent Ounces Sold oz 11,374 10,788 38,582 37,135
Average realized price and Average realized margin
Metal Sales $ 000's 21,574 17,819 70,225 65,536
Cost of Sales $ 000's 20,270 17,721 57,712 53,633
Gross Margin from Mining Operations $ 000's 1,304 98 12,513 11,903
Average realized price per gold ounce sold (1) $/oz 1,897 1,652 1,819 1,763
Total cash costs per gold ounce sold (1) $/oz 1,689 1,461 1,349 1,268
Average realized margin per gold ounce sold (1) $/oz 207 191 470 495
Total Direct Operating Costs (1) $ 000's 17,336 13,476 44,458 38,878
Royalties and production taxes (1) $ 000's 1,691 1,897 7,037 6,938
Total Cash Costs (1) $ 000's $19,027 $15,373 $51,495 $45,816
Total direct operating costs per gold ounce sold (1) $/oz 1,539 1,281 1,165 1,076
Royalties and production taxes per gold ounce sold (1) $/oz 150 180 184 192
Total cash costs per gold ounce sold (1) $/oz $1,689 $1,461 $1,349 $1,268
AISC - Minera Don Nicolas (1) $/oz $1,703 $1,494 $1,359 $1,318
(1) This is a non-IFRS performance measure, see non-IFRS Performance Measures
Three Months Ended September Nine months ended September
Corporate Financial Highlights Unit 2023 2022 2023 2022
Financial Data
Total revenue $ 000's 21,574 17,819 70,225 65,536
Mine operating expenses $ 000's 20,270 17,721 57,712 53,633
Income from mining operations $ 000's 1,304 98 12,513 11,903
Net income (loss) $ 000's (404) (6,622) (8,270) (4,762)
Adjusted EBITDA (1) $ 000's 30 746 13,064 13,365
Operating cash flow before movements in working capital (1) $ 000's 2,314 (704) 19,349 7,280
Operating cash flow $ 000's 10,268 (600) 37,543 5,729
Cash and cash equivalents $ 000's 11,565 9,469 11,565 9,469
Working capital (deficiency) $ 000's (58,338) (6,874) (58,338) (6,874)
Capital Expenditures $ 000's 13,583 2,922 34,822 6,996
(1) This is a non-IFRS performance measure, see non-IFRS Performance Measures
Three Months Ended September Nine months ended September
-4-
28% decrease as compared to the average head grade of 4.40 g/t in the third quarter of 2022. Ore
feed to the mill was impacted by poor operating conditions during the quarter, most notably
extremely poor wet winter weather conditions followed by freezing temperatures, resulting in lower
than planned mined ore production rates and lower than planned ore grades processed through the
mill. Wet ore also reduced plant throughput . Gold recovery of 93% represents a 2% increase in
recovery as compared to 91% recorded in the third quarter of 2022. Silver recovery of 65% was 2%
lower than the silver recovery achieved in the third quarter of 2022.
Stripping at Calandrias Norte commenced during the quarter with over 1.6MM tonnes of material
moved. A further 2.7MM tonnes is to be stripped in October and November and fresh ore is set to
feed the mill from December onwards. Results in Q4 are expected to show significant improvement
and benefit from access and limited future stripping required for the Calandrias Norte material and
the further ramp up of the heap leach operations. This new pit is planned to be the primary source
of ore in 2024.
During Q 3/2023, the team continued exploration efforts to advance several greenfield 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 Heap Leach Project
At the new Calandrias heap leach project, work continued as the operation remained in the
commissioning phase during the quarter. Initial ramp up was impacted by freezing conditions
reducing initial irrigation rates which has now been addressed. Finalization of the crushing plant has
now been completed, which should also see more consistent feed to the pad and improve overall
performance going forward. Approximately 538 ozs were produced in the quarter. Production is set
to achieve nameplate production rates from January thereafter.
Given weather production disruption in Q3/23 full production is now targeted for January 2024. The
Calandrias Heap Leach is the first step in Cerrado’s plans for growing production capacity at MDC.
All Argentinian projects continue to be funded by operating cash flow and local debt facilities.
Monte Do Carmo Project, Brazil
During Q 3/2023, the Company, together with its numerous advisors, completed the bankable
feasibility study (“FS”) announced on November 7, 2023 showing MDC to be an extremely high
quality, low-cost robust economic project. A summary of the key highlights is presented below:
Highlights
• After-Tax NPV of US$369 million and IRR of 32%
• Average annual gold production of 94,797 ounces per annum over 9 year Life of Mine
("LOM")
• Average AISC of US$711 per ounce over LOM
• Initial Capex of US$186.6 million (including US$15.8 million contingency)
• 2:1 ratio of NPV over Initial Capex
• Annual average free cash flow of $85 million over the LOM, with total cumulative after-tax
free cash flow of $562 million over LOM
-5-
• Initial Proven and Probable Reserves of 895 koz of Gold (16.8 Mt at 1.66 g/t Au)
• Updated Measured and Indicated Resources of 1,012 koz of Gold (18.4 Mt at 1.72 g/t Au) and
Inferred Resources of 66 koz of Gold (1.1 Mt at 1.95 g/t Au)
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, to the East of the south pit and to the north of
Gogo, as well as on testing more greenfield targets such as Divisa and Bit-3 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.
The Company also continues to pursue project funding from the UK Export Credit Agency (“UKEF”),
which is progressing well, and subject to successful due diligence and other review, is expected to
be completed approximately during Q3 2024.
Q3/2023 Financial Highlights
The Company generated revenue of $21.6 million for the three months ended September 30, 2023,
from the sale of 11,374 GEO at an average realized price per gold ounce sold of $1,897 and price per
silver ounce sold of $23.48. For the three months ended September 30, 2022, the Company
generated revenue of $ 17.8 million from the sale of 1 0,788 GEO. Revenue from sales of gold and
silver for the current period was higher than the three months ended September 30, 2022, due to
the higher realized price in the current period.
Cash costs per ounce sold were $1, 689 per ounce in the three months ended September 30, 2023,
as compared to cash costs per ounce sold of $1, 461 per ounce in the three months September 30,
2022, a 16% increase. The 16% increase is a result of higher consumables and material costs compared
to the third quarter of 2022, due to lower tonnage milled and processed.
Cash provided by operating activities during the third quarter ended September 30, 2023, was $10.3
million compared to cash used in operating activities of $0.6 million for the third quarter ended
September 30, 2022. Cash provided by operating activities before working capital changes in 2023
consisted of $2.3 million as compared to $ 0.7 million of cash used in operating activities before
working capital changes in 2022.
Adjusted EBITDA was $ 0.1 million in the third quarter of 2023 as compared to $ 0.7 million in the
third quarter of 2022. Current year adjusted EBITDA was lower due to higher expenses, offset by a
lower tax expense in Q3/2023.
Net loss for the three months ended September 30, 2023 was $0.4 million, as compared to a $ 6.6
million net loss for the three months ended September 30, 2022, a difference of $6.2 million. The
decrease in net loss is primarily a result of an increase in mine operating margin of $1.2 million, a
decrease in finance expense of $0.5 million, a decrease in non-cash remeasurement loss on the
secured notes and stream of $1.6 million, and an increase in general and administrative expenses of
$0.4 million recorded in the third quarter of 2023 as compared to the third quarter of 2022.
-6-
Basic and diluted loss per share for the three months ended September 30, 2023, was $0.00,
compared to the basic and diluted loss per share of $0.08 for the three months ended September 30,
2022, a $0.08 per share decrease as a result of higher mine operating margin and lower other
expenses.
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 i s ongoing to further unlock
potential resources in our highly prospective land package in the heart of the Deseado Massif.
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
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 Mike McAllister
CEO and Chairman Vice President, Investor Relations
Tel: +1-647-805-5662
Disclaimer
NEITHER TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS 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
-7-
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 expectation of production ramp up in 2024, the political
situation in Argentina, including the likelihood of changes to the fiscal and currency regimes and the potential benefits
to the Company resulting from politic al changes, the ability of MDN to fund its operations through cash flow and local
debt facilities, anticipated timing for licensing at Monte Do Carm o, time required to reach production capacity at Las
Calandrias, the future operating costs in Argentina, as well the timing of the feasibility study at Monte Do Carmo.
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 oblig ation 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.