Cerrado GOLD Reports Strong Q4 and Full-Year Production, Cashflow and Operating Cost Performance at Its Minera Don Nicolas MINE
April 17, 2022 www.cerradogold.com
CERRADO GOLD REPORTS STRONG Q4 AND FULL-YEAR PRODUCTION, CASHFLOW AND
OPERATING COST PERFORMANCE AT ITS MINERA DON NICOLAS MINE
• Q4 Production of 17,360 Gold Equivalent Ounces (“GEO”) and annual production of
53,672 GEO (+23% vs 2021)
• Q4 Adjusted EBITDA of $7.3 million and annual EBITDA of $20.7 million (+76% vs 2021)
• Q4 AISC of $1,015 per ounce and annual AISC of $1,231 per ounce (-10% vs 2021)
(All numbers reported in US dollars)
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
(“Q4/22”) and year-end 2022 at its Minera Don Nicolas (“MDN”) gold project in Santa Cruz Province,
Argentina and for its exploration activities at the Monte Do Carmo gold project in Brazil. Production
results were previously released on January 18, 2023. The Company’s annual financial results are
reported and available on SEDAR as well as on the Company’s website (www.cerradogold.com).
Q4 2022 Minera Don Nicolas (“MDN”) Operational Highlights:
• Gold production of 17,360 GEO in Q4/22, a 13% improvement year-on-year (“yoy”)
• Strong operating margin of $7.6 million and operating cash flows of $8.4 million in the fourth
quarter
• AISC of $1,015 per ounce during Q4
Full-Year 2022 Minera Don Nicolas (“MDN”) Operational Highlights:
• Annual 2022 gold production of 53,672 GEO, a 23% improvement yoy (43,559 ounces 2021)
• Strong annual operating margin of $19.5 million and operating cash flows of $15.2 million
• Full-year adjusted EBITDA of $20.7 million; a 76% increase yoy
• Annual AISC of $1,231 per ounce, at the lower end of guidance
Mark Brennan, CEO and Co-Chairman, stated: “We are very pleased to see another solid year at our
MDN operations translating into strong cashflow generation and lower AISC. With production from
our initial heap leach project at Las Calandrias on schedule to begin in June, we expect to deliver
further production and cost improvement in 2023. In addition, feasibility study work at Monte Do
Carmo continues positively and is expected to be completed by the end of May 2023. We expect the
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Feasibility to highlight the robust growth profile we plan for Cerrado in the coming years to over
200,000 ounces of production per annum.”
Fourth Quarter 2022 Operational and Financial Performance
Q4/22 and Full Year Operational Highlights
Minera Don Nicolas
The Company produced 17,360 GEO ounces during the three months ended December 31, 2022, as
compared to 15,368 GEO ounces in the three months ended December 31, 2021. Production was
13% higher in the three months ended December 31, 2022, due to both higher grade and higher
recovery. Production of 17,360 GEO ounces in the fourth quarter 202 2 also represented a 35%
improvement over the 11,284 GEO ounces produced in the third quarter of 2022.
The average quarterly gold head grade of 5.83 g/t was the highest recorded since the Cerrado
acquisition in early 2020 and represents a 22% increase as compared to the average head grade of
Key Operating Information Unit 2022 2021 2022 2021
Operating Data
Ore Mined ktonnes 109.45 120.50 375.14 411.64
Waste Mined ktonnes 1,256.00 1,061.13 4,529.97 5,113.87
Total Mined ktonnes 1,365.45 1,224.66 4,905.11 5,738.04
Strip Ratio waste/ore 11.48 8.81 12.08 12.42
Mining rate ktpd 14.84 13.31 13.44 15.98
Ore Milled ktonnes 94.39 109.89 394.86 413.50
Head Grade Au g/t 5.83 4.77 4.56 3.51
Head Grade Ag g/t 7.39 17.94 10.97 12.63
Recovery Au % 95% 89% 92% 89%
Recovery Ag % 66% 57% 64% 59%
Mill Throughput tpd 1,026 1,194 1,082 1,152
Gold Ounces Produced oz 17,187 15,008 52,504 42,267
Silver Ounces Produced oz 14,962 27,579 95,803 94,092
Gold Equivalent Ounces Produced oz 17,360 15,368 53,672 43,559
Gold Ounces Sold oz 14,545 12,864 50,668 38,839
Silver Ounces Sold oz 12,800 26,268 95,795 88,093
Gold Equivalent Ounces Sold oz 14,787 13,150 51,923 40,133
Average realized price and Average realized margin
Metal Sales $ 000's 24,824 23,100 90,360 70,051
Cost of Sales $ 000's 17,268 14,984 70,901 56,350
Gross Margin from Mining Operations $ 000's 7,556 8,116 19,459 13,701
Average realized price per gold ounce sold (1) $/oz 1,689 1,748 1,742 1,747
Total cash costs per gold ounce sold (1) $/oz 1,003 955 1,192 1,247
Average realized margin per gold ounce sold (1) $/oz 686 793 550 500
Total Direct Operating Costs (1) $ 000's 12,085 9,826 50,963 41,048
Royalties and production taxes (1) $ 000's 2,498 2,455 9,436 7,392
Total Cash Costs (1) $ 000's $14,583 $12,281 $60,399 $48,440
Total direct operating costs per gold ounce sold (1) $/oz 831 764 1,006 1,057
Royalties and production taxes per gold ounce sold (1) $/oz 172 191 186 190
Total cash costs per gold ounce sold (1) $/oz $1,003 $955 $1,192 $1,247
AISC - Minera Don Nicolas (1) $/oz $1,015 $995 $1,231 $1,356
(1) This is a non-IFRS performance measure, see non-IFRS Performance Measures
Three Months Ended December Year Ended December
Corporate Financial Highlights Unit 2022 2021 2022 2021
Financial Data
Total revenue $ 000's 24,824 23,100 90,360 70,051
Mine operating expenses $ 000's 17,268 14,984 70,901 56,350
Income from mining operations $ 000's 7,556 8,116 19,459 13,701
Net income (loss) $ 000's (1,146) 2,539 (5,908) (6,299)
Adjusted EBITDA (1) $ 000's 7,300 8,286 20,665 11,754
Operating cash flow before movements in working capital (1) $ 000's 6,366 8,295 14,696 9,035
Operating cash flow $ 000's 8,419 4,686 15,198 6,618
Cash and cash equivalents $ 000's 5,921 1,726 5,921 1,726
Working capital (deficiency) $ 000's (11,638) (13,543) (11,638) (13,543)
Capital Expenditures $ 000's 4,070 1,275 11,066 8,229
(1) This is a non-IFRS performance measure, see non-IFRS Performance Measures
Three Months Ended December Year Ended December
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4.77 g/t recorded in the fourth quarter of 2021. The fourth quarter gold head grade of 5.83 g/t also
represents a 33% improvement over the 4.40 g/t head grade recorded in Q3 2022.
Gold recovery of 95% represents a 7% increase in recovery as compared to the fourth quarter of
2021. Fourth quarter 202 2 mill recovery also represents a 4% increase as compared to the third
quarter of 2022.
For the full year 2022 t he Company produced 53,672 gold equivalent ounces (“GEO”) during the
year ended December 31, 2022, as compared to 43,559 GEO for the year ended December 31, 2021.
Production is significantly higher in the year ended December 31, 2022, due to 30% higher gold head
grade and 9% higher silver recovery.
During 2022 exploration efforts were designed to advance several green and brownfield targets in
parallel with the aim of increasing mine life and expanding the overall resource endowment at MDN.
Brownfield efforts were concentrated in the Paloma area, where shallow RC drilling was conducted
along strike extension of known structures (e.g. Arco Iris and Violeta) and deeper Diamond Drilling
on the down dip extension of the known resource in the Sulfuro/Esperanza vein complex. In
addition, exploration work to support the move to underground mining was also commenced.
Las Calandrias Project
During 2022, work progressed on the engineering and construction of the Las Calandrias heap leach
project. During 2022 the Company completed the detailed design of the heap leach pad as well as
completed the procurement and construction of the crushing plant and is finalizing the Carbon in
Column plant construction. Placement of ore commenced in early April 2023 , with the first gold
production expected in late May or early June 2023. The Calandrias Heap Leach is expected to add
25,000-30,000 ounces of incremental production commencing in 2023 and is the first step in
Cerrado’s plans for growing production capacity in Argentina up to 100,000 ounces p er annum in
the near term, with the addition of a second heap leach facility planned at Martinetas in the second
half of 2023. All MDN projects are to be funded by cash flow and local debt facilities.
Monte Do Carmo Project, Brazil
During 2022 the Company continued with numerous work programs related to the completion of a
bankable feasibility study (“FS”) by the end of May 2023. During 2022 , the Company completed a
48,714 metre infill drilling program to support the upgrading of the resource to the Measured and
Indicated categories for the FS for the Serra Alta Deposit. To date, all assay results from the FS drilling
campaign have been received, and SRK Consulting is now incorporating the information to support
the update of the Resource model. In addition to drilling to support the FS , regional exploration
continues to expand the known targets for continued exploration on the overall project to further
grow the known resources on the overall property.
The Environmental Impact Study (“EIS”) for the MDC project is currently under assessment by
NATURATINS. It is expected that the Preliminary License (“LP”) will be issued shortly. After final
approval a nd issuance of the LP by NATURATINS an application for the License of
Installation/Construction (“LI”) will follow.
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Q4/2022 Financial Highlights
The Company generated revenue of $24.8 million for the three months ended December 31, 2022,
from the sale of 14,545 ounces of gold and 12,800 ounces of silver at an average realized price per
gold ounce sold of $1, 689 and price per silver ounce sold of $20.31. For the three months ended
December 31, 202 1, the Company generated revenue of $ 23.1 million from the sale of 12,864
ounces of gold and 26,268 ounces of silver. Revenue from sales of gold and silver for the current
period was 7% higher than the three months ended December 31, 2021, due to the higher number
of ounces sold, offset slightly by $ 59 per ounce lower realized price in the current period as
compared to the three months ended December 31, 2021.
Cash costs per ounce sold w ere $1,003 per ounce in the three months ended December 31, 2022,
as compared to cash costs per ounce sold of $955 per ounce in the three months ended December
31, 2021, a 5% increase. The 5% increase is a result of higher labour costs due to the inflationary
pressures in Argentina. Fourth quarter 2022 cash operating cos ts per ounce sold represent a 3 1%
reduction compared to Q3 2022 of $1,461/oz due to the increased production base.
Net loss for the three months ended December 31, 2022, was $ 1.1 million as compared to a $2.5
million net income for the three months ended December 31, 2021, a difference of $3.6 million. The
decrease in net income is primarily a result of a deferred tax expense recorded in the fourth quarter
of 2022 of $3.0 million as compared to $nil in the fourth quarter of 2021.
The Company incurred general and administrative expenses of $ 1.9 million for the three months
ended December 31, 2022, a $0.9 million decrease compared to the general and administrative
expenses incurred during the three months ended December 31, 2021. During the three months
ended December 31, 2022, the Company had decreases in stock-based compensation expenses and
salary expenses, which were slightly offset by increases in professional fees and office expenses.
Other expense incurred of $ 1.3 million during the three months ended December 31, 2022, was
slightly higher than the $0.8 million other expense recorded during the three months ended
December 31, 2021, due to drilling expensed in 2022.
Adjusted EBITDA was $7.3 million in the fourth quarter of 2022, which is a $6.6 million improvement
as compared to the third quarter of 2022. Full -year 2022 adjusted EBITDA of $2 0.7 million also
represented an $8.9 million improvement as compared to the full year of 2021.
Basic and diluted loss per share for the three months ended December 31, 202 2, was $0.0 1,
compared to the basic and diluted earnings per share of $0. 03 for the three months ended
December 31, 2021, a $0.04 per share decrease as a result of higher taxes. Basic and diluted loss per
share for the year ended December 31, 2022, was $0.0 8, consistent with the basic and diluted
earnings loss per share of $0.09 for the year ended December 31, 2021. Higher revenue and income
from mining operations in 2022 were offset by higher finance expenses and deferred taxes.
Full-Year 2022 Financial Highlights
The Company generated revenue of $90.4 million for the year ended December 31, 2022, 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 compared to the year ended December 31 , 2021, when the Company generated
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revenue of $70.1 million from the sale of 38,839 ounces of gold and 88,093 ounces of silver. Revenue
and sales of gold and silver for the current period is higher than the year ended December 31, 2021,
due to higher grades and recovery.
Cost of sales for the year ended December 31, 2022, was $70.9 million as compared to $56.4 million
for the year ended December 31, 2021. The Company incurred $9.8 million higher production costs
for the year ended December 31, 2022, due to higher costs of operational contractors and materials
and higher labour costs in the year ended 2022 as compared to 2021.
Total cash costs (including royalties) per ounce sold was $1,192 per ounce in the year ended
December 31, 2022, as compared to $1,247 per ounce for the year ended December 31, 2021, a $55
per ounce decrease (refer to the reconciliation of Non-IFRS performance metrics). The decrease is a
result of significantly higher ounces sold during 2022 as a result of higher grades and recover y
achieved in the year ended December 31, 2022.
Net loss for the year ended December 31, 2022, was $5.9 million as compared to a $6.3 million loss
for the year ended December 31, 2021. There was a $5.8 million increase in mine operating margin
in 2022 wh ich is a result of higher gold sales and realized metal prices. The increase in operating
margin was offset by an increase in deferred tax expense of $3.0 million and an increase in mining
tax expense of $0.5 million.
Annual Guidance for 2023
As previously stated, gold production is expected to be between 60,000 – 70,000 GEO for 2023, and
the Company expects to deliver an AISC of US$1,100-1,300 per ounce for the upcoming year.
Mark Brennan Mike McAllister
CEO and Co 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
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 of historical fact, are forward -looking statements and are
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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 expected timing of commencement of gold production at Las Calandrias, the expectations of
2023 results as well as 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. 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.