Cerrado Gold tables Monte do Carmo construction update
Cerrado Gold Inc. [CERT-TSXV, CRDOF-OTCQX] said it hopes to receive a construction license in the first quarter of 2024 for its Monte do Carmo development project in Tocantins State, Brazil.
The company also said it expects to complete an Export Credit Agency backed financing by the third quarter of 2024.
Cerrado shares advanced on the news, rising 3.1% or $0.02 to 66 cents. The shares trade in a 52-week range of $1.09 and 49 cents.
The announcement comes after the company said it has filed a technical report of the 43-101-compliant independent feasibility study for Monte do Carmo, which is based on initial prove and probable reserves of 895,000 ounces of gold.
The technical report shows a positive adjustment to the economic parameters outlined in a November 7, 2023 outlining the results of the feasibility study, including a slightly higher after-tax net present value (NPV 5%) of US$390 million.
“The feasibility study demonstrates that the Monte do Carmo project is poised to be an extremely robust project with low capital and operating costs that will generate cash flows well above its weight as a 100,000-ounce producer of gold over a 9.0-year lifespan while providing an approximate 2:1 ratio of NPV over Capex,’’ said Cerrado CEO Mark Brennan.
Cerrado is a Toronto-based company with a focus on gold projects in the Americas. It is the 100% owner of the producing Minera Don Nicolas mine in Santa Cruz, province, Argentina and the Monte do Carmo development project.
The feasibility study is focused on the principal Serra Alta deposit and the smaller satellite deposit of Gogo do Onca and provides a scalable base of production from which to build on future potential exploration success.
Monte do Carmo is expected to commence production at a rate of 1.92 million tonnes annually from the open pit for total production of 712,989 ounces, or 95,212 ounces of gold annually at an all-in-sustaining cost of US$686.6 an ounce. In year four, simultaneous underground development will be launched, and is expected to contribute an additional 143,916 ounces over five years of operation.
Total capital required is pegged at US$262.4 million. The initial capital expenditure is estimated to be US$181.4 million, including a US$15.8 million contingency.
Cerrado says the project benefits from convenient access to essential infrastructure, including paved roads, energy, 69 kV electrical power line, water supply, and an international airport and is well supported by the local community.
Throughout the 21 concessions, Cerrado has identified an additional 30 kilometres of known mineralized trends that may hold the next Serra Alta style discovery. Several targets have been identified, all with minimal drilling to date.
Cerrado was in the news recently when it agreed to acquire all the outstanding shares of Voyager Metals Inc. [VONE-TSXV] it didn’t already own via a plan of arrangement deal. Voyager’s key asset was a 100% stake in the Mon Sorcier iron and vanadium project in Chibougamau, Que., which is advancing towards feasibility and permitting.