Cerrado Gold agrees to acquire Ascendant Resources
Cerrado Gold Inc. [CERT-TSXV, CRDOF-OTCQX] said it has struck definitive deal to acquire all the issued and outstanding shares of Ascendant Resources Inc. [ASND-TSX] it doesn’t already hold via a plan of arrangement. Upon completion of the arrangement, Cerrado will indirectly own an 80% interest in the Lagoa Salgada polymetallic VMS project in Portugal.
The company said Lagoa Salgada is a well advanced long-life, low-cost project with gold and silver accounting for approximately 34% of NSR, located in the Iberian Pyrite Belt. In 2023, Ascendant completed a NI 43-101-compliant feasibility study for Lagoa Salgada, which envisaged US$75 million annually in free cash flow over the first five years of operations. A new optimized feasibility study is anticipated to be completed by late summer. A construction decision is expected by the fourth quarter of 2025.
Cerrado shares were active on the news, easing 10.2% or $0.05 to 44 cents. The shares trade in a 52-week range of 51 cents and 15 cents. Ascendant shares were unchanged at $0.06.
Under the arrangement, Ascendant shareholders would receive one share of Cerrado for every 7.8 common shares of Ascendant. As well, $5.23 million in debt currently owed by Ascendant to Cerrado will be absorbed by Cerrado. The exchange ratio is approximately equal to the closing price of Ascendant and Cerrado shares at the close of trading on January 30, 2025. Upon closing, Ascendant shareholders would own approximately 21% of the Cerrado shares outstanding. Cerrado will issue 27.7 million shares for the transaction and will have approximately 131.3 million issued and outstanding shares following completion of the transaction.
Cerrado currently holds 16.4 million Ascendant shares, or an 8.78% interest.
Cerrado is a Toronto-based gold production, development and exploration company with a focus on gold projects in South America. The company is the 100%-owner of both the producing Minera Don Nicolas and Las Calandrias mine in Santa Cruz province, Argentina. In Canada, Cerrado is developing its 100%-owned Mount Sorcier iron ore and vanadium project located outside Chibougamau, Quebec.
With funding requirements of less than $5.0 million to deliver a construction decision, Cerrado has budgeted to exit 2025 with over $20 million in cash based on current operating and development budgets and debt reduction.
In connection with the arrangement, Cerrado will subscribe for common shares of Ascendant to raise gross proceeds of $900,000 in cash at a price of $0.0525 per share and the Canadian dollar equivalent of approximately US$1.7 million of accrued and deferred interest owing by Ascendant to Sprott Private Resources Streaming Royalty (Collector) LP.
Back in October, 2024, Cerrado announced that a unit of Hochschild Mining PLC filed notice of its plan to exercise an option to purchase a 100% interest in Cerrado’s Monte do Carmo project in Brazil for US$60 million. Of the total US$60 million, US$15 million was previously received in connection with the granting of the option.