Cerrado GOLD Reports Third Quarter Operating and Financial Results at Its Minera Don Nicolas MINE IN Argentina
2
November 23, 2022 www.cerradogold.com
CERRADO GOLD REPORTS THIRD QUARTER OPERATING AND FINANCIAL RESULTS
AT ITS MINERA DON NICOLAS MINE IN ARGENTINA
• Q3 Production of 11,284 Gold Equivalent Ounces
• AISC of $1,494 per ounce of gold (Expected Peak Costs at MDN)
• Q3 adjusted EBITDA of $0.7 million
• Minera Don Nicolas receives permit to allow pad construction at Calandrias Heap Leach
Project
TORONTO, ONTARIO - Cerrado Gold Inc. [TSX.V: CERT][OTCQX:CRDOF] ("Cerrado" or the
"Company”) reports its operational and financial results for the third quarter of 2022 (“Q3 2022”).
The Company’s financial results are reported and available on SEDAR as well as on the Company’s
website (www.cerradogold.com).
Q3 2022 Financial and Operational Highlights (All numbers reported in US$)
• Production of 11,015 ounces of gold in Q3 2022 (11,284 Gold Equivalent Ounces (“GEO”), in-
line with annual guidance of 45,000 – 55,000 ounces of production
• AISC of $1, 494 per ounce of gold sold due to higher stripping costs, lower throughput and
higher labor costs during the quarter; costs expected to be significantly reduced in the fourth
quarter
• Q3 adjusted EBITDA of $0.7 million primarily due to higher operating costs
Mark Brennan, CEO and Co -Chairman stated: “ Q3 provided challenges as we integrated new pits ,
increased strip ratio s and incurred increased labor costs. We expect unit operating costs to have
peaked with the fourth quarter looking particularity strong and note that production levels are within
our range of guidance for 2022. Our heap leach pad construction has commenced and we believe
this is the first step to wards bringing stronger long term operating metrics to MDN. In Brazil, work
continues to upgrade the resources at Monte Do Carmo while feasibility works are progressing as
planned.”
-2-
Third Quarter 2022 Operational and Financial Performance
Minera Don Nicolas
The Company produced 11,015 ounces of gold and 22,419 ounces of silver during the three month
period ended September 30, 2022, as compared to 11,296 ounces of gold and 2 8,721 ounces of
silver in the second quarter of 2022. Ounces produced in the quarter were consistent with the
second quarter, however, the slight decrease was primarily related to a decrease in throughput at
the mill. Although mine production rates showed a slight decrease at the start of the quarter,
planning and management intervention has ensured that mining numbers ended in line with
expectations at the end of the quarter. As the new pits are further developed, we expect grades
and throughput rates to improve in the fourth quarter of the year. Gold production was 8% higher
than the corresponding period in 202 2, due to improvements in both head grade and recovery, as
the Company produced 10,168 ounces of gold and 28,595 ounces of silver in the three months
ended September 30, 2021.
The average gold head grade of 4.40 grams per tonne (“g/t”) represents a 28% increase on the 3.44
g/t head grade achieved in the second quarter of 2022 and a 23% increase as compared to the
average head grade of 3.57 g/t recorded in the third quarter of 2021. The average silver head grade
Key Operating Information Unit 2022 2021 2022 2021
Operating Data
Ore Mined ktonnes 84.79 113.47 265.69 291.14
Waste Mined ktonnes 1,265.08 1,461.57 3,273.97 4,052.75
Total Mined ktonnes 1,349.86 1,653.75 3,539.66 4,513.38
Strip Ratio waste/ore 14.92 12.88 12.32 13.92
Mining rate ktpd 14.67 18.17 12.97 16.90
Ore Milled ktonnes 98.92 102.43 300.47 303.61
Head Grade Au g/t 4.40 3.57 4.16 3.05
Head Grade Ag g/t 11.58 13.01 12.10 10.71
Recovery Au % 91% 88% 90% 91%
Recovery Ag % 66% 63% 64% 64%
Mill Throughput tpd 1,075 1,126 1,101 1,137
Gold Ounces Produced oz 11,015 10,168 35,317 27,259
Silver Ounces Produced oz 22,419 28,595 80,841 66,513
Gold Ounces Sold oz 10,522 9,648 36,124 25,976
Silver Ounces Sold oz 22,355 25,836 82,995 61,825
Average realized price and Average realized margin
Metal Sales $ 000's 17,819 17,930 65,536 46,951
Cost of Sales $ 000's 17,721 14,425 53,633 41,366
Gross Margin from Mining Operations $ 000's 98 3,505 11,903 5,585
Average realized price per gold ounce sold (1) $/oz 1,652 1,795 1,763 1,747
Total cash costs per gold ounce sold (1) $/oz 1,461 1,271 1,268 1,392
Average realized margin per gold ounce sold (1) $/oz 191 524 495 355
Total Direct Operating Costs (1) $ 000's 13,476 10,372 38,878 31,222
Royalties and production taxes (1) $ 000's 1,897 1,889 6,938 4,937
Total Cash Costs (1) $ 000's $15,373 $12,261 $45,816 $36,159
Total direct operating costs per gold ounce sold (1) $/oz 1,281 1,075 1,076 1,202
Royalties and production taxes per gold ounce sold (1) $/oz 180 196 192 190
Total cash costs per gold ounce sold (1) $/oz $1,461 $1,271 $1,268 $1,392
AISC - Minera Don Nicolas (1) $/oz $1,494 $1,382 $1,318 $1,534
(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 2022 2021 2022 2021
Financial Data
Total revenue $ 000's 17,819 17,930 65,536 46,951
Mine operating expenses $ 000's 17,721 14,425 53,633 41,366
Income from mining operations $ 000's 98 3,505 11,903 5,585
Net loss $ 000's (6,622) (1,401) (4,762) (8,838)
Adjusted EBITDA (1) $ 000's 746 2,653 13,365 3,468
Operating cash flow before movements in working capital (1) $ 000's (704) 1,923 7,280 740
Operating cash flow $ 000's (600) 2,340 5,729 1,932
Cash and cash equivalents $ 000's 9,469 5,333 9,469 5,333
Working capital (deficiency) $ 000's (6,874) (5,063) (6,874) (5,063)
Capital Expenditures $ 000's 2,922 2,308 6,996 6,954
(1) This is a non-IFRS performance measure, see non-IFRS Performance Measures
Three Months Ended September Nine Months Ended September
-3-
of 11.58 g/t represents a 16% increase quarter on quarter and an 11% decrease as compared to the
average silver head grade of 13.01 g/t recorded in the third quarter of 2021. Mill throughput of
98,918 tonnes of ore represents a 4% decrease over the second quarter of 2022 and a 3% decrease
in throughput as compared to the third quarter of 2021.
Monte Do Carmo Project
In Brazil, the Company continues to focus on numerous fronts to support the completion of the
Feasibility Study (“FS”) at Monte do Carmo. Infill drilling continued in the quarter and to November
10th Cerrado completed 26,405 metres as well as 14,174 metres of exploratory drilling and 3,480
metres of sterilization drilling with th e use of 5 drill rigs. To date, assay results from 97 complete
infill drill holes have been received, and results to date continue to support the conversion of
Inferred Resources to the Measured and Indicated resource categories. In addition, four exploratory
drill holes to the east of the East Zone at Serra Alta returned anomalous assay grades defining a new
mineralized zone called E3. The discovery drill hole FSZ -008 presented a remarkable composite of
13.23m@ 5.53 Au g/t, demonstrating potential expansion of the resource base to the east at Serra
Alta. An additional 6,300 meters of drilling were added to the overall 2022 drilling program to target
potential areas to expand the Indicated and inferred resources at Serra Alta.
Exploration drilling continues at MDC targeting extensional and satellite zones like Gogo de Onca
(“Gogo”) and the newly discovered E3 target . The Company announced on November 21 the
discovery hole at E3; a 150m step out corrido r to the east of the East Zone, that according to
preliminary continuity models indicate it could have approximately 250 m of strike length. To date,
the Company has received 24 complete drill hole results from the Gogo target. Initial drilling results
at the Gogo target are encouraging as the main mineralization controls seen at the Serra Alta deposit
are replicated at Gogo. 6,745 meters have been drilled to November 10th. The remarkable results
at Gogo include ; FGO -004 25.09m@ 3.38 Au g/t, FGO -008 - 12.49m@ 3.39 Au g/t and FGO -12
11.69m@ 5.37 Au g/ t. The company will continue to work at Gogo with geological modeling, and
has completed a shipment of 115 Kg of mineralized material from core to perform metallurgical test
work.
The Company has also completed its Environmental Impact Studies (“EIS”) for the Serra Alta deposit
at MDC and filed a full report in July 2022 with the local environmental authorities, NATURATINS.
After receiving approval from NATURATINS, public hearings will be held with the local co mmunity
followed by an application for the Preliminary License (“PL ”) followed rapidly thereafter by the
Installation License (“IL”).
Financial Results
The Company generated revenue of $17.8 million for the three months ended September 30, 2022
from the sale of 10,522 ounces of gold and 22,355 ounces of silver at an average realized price per
gold ounce sold of $1, 652 and average price per silver ounce sold of $19.49. This compares with
second quarter revenue of $20.3 million, from the sale of 10,981 ounces of gold and 27,775 ounces
of silver at an average realized price per gold ounce sold of $1,795 and average price per silver ounce
sold of $2 2.43. The prices realized represents an 8% decrease as compared to second quarter of
2022 primarily as a result of a decrease in gold prices during the quarter.
-4-
Cash operating costs per ounce sold was $ 1,461 per ounce in the three months ended September
30, 2022, which represents a 6% increase on the $1,376 per ounce achieved in Q2 2022. The primary
drivers of the increase in costs were a higher strip ratio, increase in labor rates in Argentina, and an
increase in the cost of operational contractors and materials. The strip ratio of 14.9:1 for the three
months ended September 30, 2022, was higher than the 12.32:1 achieved in the second quarter of
2022. The increase is primarily related to the opening of the new pits and was 16% higher as
compared to the three months ended September 30, 2021.
Adjusted EBITDA was $ 0.7 million in the third quarter of 2022 which is a $2.3 million reduction
quarter on quarter due to the lower productio n and a lower gold sales price over the period.
Adjusted EBITDA decreased by $1.9 million as compared to the $ 2.6 million adjusted EBITDA
recorded in the third quarter 2021. Adjusted EBITDA for the nine months ended September 30, 2021
represented a $10 million improvement as compared to the nine months ended 2021.
The Company incurred general and administrative expenses of $ 2.9 million for the three months
ended September 30, 2022 , a $0.4 million increase compared to the general and administrative
expenses incurred during the three month period ended September 30, 2021. During the three
months ended September 30, 2022, general and administrative expenses increased primarily due to
an increase in non-cash shared-based payments of $0.6 million, offset by lower professional and
consulting fees of $0.2 million.
Other expenses included a $ 1.1 million increase in finance expense, primarily as a result of the
interest expense on the secured note payable which closed in the first quarter of 2022, and interest
on the loan payable which closed in the third quarter of 2022, offset by a net foreign exchange gain
of $0. 1 million during the three months ended September 30, 2022, as compared to the three
months ended September 30, 2021.
Net loss for the three months ended September 30, 2022, was $ 6.6 million as compared to a Net
loss of $1.5 million in the second quarter on 2022 and a $1. 4 million net loss for the three months
ended September 30, 2021.
Capital expenditure for the quarter was $2. 9m and $7.0m for the nine months ended September
30, 2022.
Basic and diluted loss per share for the three months ended September 30, 2022, was $0.0 8,
compared to the basic and diluted earnings per share of $0.02 for the second quarter of 2022 and a
$0.02 loss for the three months ended September 30, 2021, differences are driven by underlying
production from the mine as well as a result of higher finance expenses.
-5-
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.
Mark Brennan David Ball
CEO and Co Chairman Vice President, Corporate Development
Tel: +1-647-796-0023 Tel: +1-647-796-0068
[email protected] [email protected]
About Cerrado
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.
At Minera Don Nicolas, Cerrado is maximising ass et value through further operation optimization
and continued production growth. An extensive campaign of exploration is ongoing to further
unlock potential resources in our highly prospective land package.
At Monte Do Carmo , Cerrado is rapidly advancing the Serra Alta deposit through Feasibility and
production. The Serra Alta deposit Indicated Resources of 541 kozs of contained gold and Inferred
Resources of 780 kozs of contained gold. The Preliminary Economic Assessment demonstrates
robust economics as well as the potential to be one of the industry’s lowest cost producers. Cerrado
also holds an extensive and highly prospective 82,542 ha land package at Monte Do Carmo.
For more information about Cerrado please visit our website at: www.cerradogold.com.
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 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.
-6-
Forward-looking statements contained in this press release include, without limitation,
statements regarding the business and operations of Cerrado Gold. In making the forward -
looking statements contained in this press release, Cerrado Gold has made certain assumptions,
including, but not limited to the peak of unit operating costs, the anticipated strength of financial
results and production rates for the fourth quarter of 2022, the ability to meet production
guidance, the expansion potential of the resou rce to the east of Serra Alta and the dates for the
completion of the Monte Do Carmo Feasibility Study . Although Cerrado Gold believes that the
expectations reflected in forward -looking statements are reasonable, it can give no assurance
that the expectat ions 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 pres s release. Except as required by law, Cerrado
Gold 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.