Cerrado Gold – Full-Year 2024 Financials and Operations at Minera Don Nicolas, Value Proposition of Lagoa Salgada, and Optionality At Mont Sorcier
Mark Brennan, Founder, CEO, and Director of Cerrado Gold Inc (TSX.V: CERT) (OTCQX: CRDOF), joins me to review the Q4 and full-year 2024 operations and financials at Minera Don Nicolas in Argentina, the transformative acquisition underway of Ascendant Resources and the value proposition at the Lagoa Salgada VMS Project in Portugal, along with the further value and optionality at the Mont Sorcier Iron-Vanadium project in Quebec.
Q4/24 and Annual Minera Don Nicholas Financial and Operating Highlights:
- Production of 10,431 GEO in Q4 and Annual production of 54,494 GEO
- Adjusted EBITDA of $4.5 million in Q4 and US$24.4 million for the year excluding assets sales and Option payment proceeds.
- Received $34 million in Asset sale and Option payment proceeds in Q4: Received $49 million for the full year with up to $25 million ($15 million guaranteed) due in the coming years.
- AISC of $1,953 during Q4 vs $1,594 in Q4/23 due to lower production levels and ongoing inflationary pressures in Argentina
- Received Asset Sale and Option payments totaling $34 MM during the quarter, significantly strengthening the balance sheet.
- Focus remains on ramping up heap leach production to 4,000 – 4,500 GEO per month
Mark and I review their Minera Don Nicolas producing gold project in Argentina, and how the production profile can grow by eventually going underground, as well as finding more satellite open-pits at surface. The higher gold prices are allowing for a faster repayment of debt along with an aggressive exploration program underway in 2025 to expand resources at depth and at key surface targets.
Operational results for the fourth quarter demonstrated a decrease in production relative to Q4/23 as high-grade ore to the CIL plant declined as mining from the Calandrias Norte pit was completed, and as the operation transitioned to focus on heap leach production. With higher gold prices, the CIL plant is expected to continue processing low grade stockpiles through Q2/25 when it will be blended with new high-grade material from initial underground mining feed from Q3/25 onward. The ramp up of heap leach operations continues to improve as crushing capacity continued to climb with production of 5,956 GEO during the quarter.
Next we unpack the ongoing transaction to acquire Ascendant Resources Inc. (TSX: ASND) for their 80% interest in the robust Lagoa Salgada VMS Project with a Post-tax NPV of US$147 million and a 39% IRR in current Feasibility Study. The vote is next week and this Project adds both substantial precious metals resources along with critical minerals exposure (34% silver & Gold, 30% Zinc, 15% copper, 14% lead, 7% tin) to the future production profile. Project economics studies anticipate lowest cost quartile production with US$0.59/lb Zinc Equivalent All in sustaining cost (AISC) for the first 5 years. Mark also highlights how there is extensive exploration potential to keep expanding resources at this Project. There will be an optimized Feasibility Study due in Q3, construction decision by year end 2025 and initial production expected in second half of 2027.
We wrap up discussing the underappreciated value and ongoing derisking work that is moving towards an updated economic study at the Mont Sorcier Iron-Vanadium in Quebec. Recent metallurgical test work, announced on May 1st has reaffirmed the potential to produce high grade and high purity iron concentrate grading in excess of 67% iron with silica and alumina content below 2.3%. More ongoing test work and improvements to the overall process design will be at the core of the NI 43-101 Bankable Feasibility Study (“BFS”) which is targeted to be completed by the end of Q1 2026.
If you have questions for Mark regarding Cerrado Gold, then please email those to me at Shad@kereport.com.
- In full disclosure, Shad is a shareholder of Cerrado Gold at the time of this recording, and may choose to buy or sell shares at any time.
do not sure about others, but Matthew said, he was buying ipt recently.
IPT recently gave new life to more than 30M warrants which were about to expire worthless earlier this April. Those $0.35 warrants were initially gifted to investers in a PP in April 2023. Their life has been extended an extra 18 months to October 2026. At least one IPT insider owns some of these warrants.
That’s right Alex; I’ve added quite a few shares this year.
Considering where silver’s going and the deal that IPT got on Plomosas, those warrants won’t be a problem. And of course they will benefit the company’s cash position.
What we need now is for silver to prove that it has bottomed versus gold. If it hasn’t yet, it will soon unless the Fed opts for the worst credit collapse in history.
Matthew, sure some will benefit if those warrants are eventually in the money but most others would be better off if they had expired worthless this past April, 2025 before IPT management got involved and changed the rules to benefit some investors over others.
A solution might be to now issue one $0.35 warrant for every outstanding share of IPT, expiring in October 2026.
The company would receive almost $12M from those warrants yet many seem to focus only on the dilution as if they’re getting no value from them. If we were talking about options I’d have a very different opinion.
The expiration extension is not unusual at all in this sector.
Lots of unscrupulous managements in this sector. IPT just one of many
No, there’s lots of need for cash in this sector and access to it just might disappear if management doesn’t take care of those that fund their companies. IPT is among the better juniors when it comes to financing terms. Shares are typically offered at or near the market and warrants are usually well out of the money. It is also common for IPT to issue half a warrant per offered share instead of a full warrant. A lot of companies fail to get such decent terms for a variety of reasons and none of them are good.
Glen, eventually you’ll be correct, however, I fear we’re going to be in a corrective phase for the precious metals and miners for a good part of this year. But not to worry, we’re still in good shape and I’m a buyer and adder to my positions on the bottoming of this pullback—a buyer when gld challenges the 42-46 level.
Silver Santa 🦀 @Silver__Santa
$CERT.V – CERRADO GOLD
“In 2024, Cerrado Gold produced 55,000 GEO at an impressive AISC of just $1,594. The company improved its balance sheet by over $54.5M, received $49M during the year, and is set to receive another $25M in the coming years. Financials were very strong considering the market cap – almost as if the market had been pricing in bankruptcy, while in reality the balance sheet is quite healthy. A company that will generate around $50M USD in free cash flow – roughly equivalent to its entire market cap prior to the $ASND acquisition. On an EV basis, the company is now even cheaper than it was a year ago, and without the same perceived bankruptcy risk.”
“These numbers are remarkable given a current market cap of only $50M USD, which aligns more with an explorer than an active producer. With rising production and new projects on the horizon, additional free cash flow seems likely. At this point, a $50M valuation no longer seems justified. DYODD. CERT is now my 4th largest position at 9.2%.”
https://x.com/Silver__Santa/status/1918293337485840548?t=ijhq6go4B9DfmtRsbjNC3A&s=19
Let me get this going!
As bleak as this may sound and rightfully, I think these monthly candles in the little guys we invest in, are screaming to take off…Everything media, social and online is bear and I can’t find one bull in these explorers/discovery and near term production companies that is not an old schooler..
Either I’m blind or really really suck but this is the moment the charts every way I have looked at them tell me we are taking off this month/next in a hugeee way… please anyone hold me accountable to this. I’m speaking of 80perxemt of the companies. I see in my tunnel vision 6/7 month rocket launcher.
As the titcamuc would say, is there anyone out there? And I’m dead serious! Is there? Because if doc or Matthew or dt or shad wolf or Charles or Jerry the whole crew doesn’t see the major contrarian in this then I’m completely alone which is fine…
The moment is now literally this month we need to start moving and I see that as hard as it is to see.. let’s see if this one works out.
For the record silver about to do something few see coming.. aka it’s playing mind games but this is the one time I will say this, the beta and cycles are all pointing we are extremely and I mean extremely delayed and the rocket is going to kill it..
Glen