Cerrado unveils US$10 million streaming deal with Sprott
Cerrado Gold Inc. [CERT-TSXV, CRDOF-OTCQX] said it has entered into an amended and restated metal purchase and sale agreement with Sprott Private Resource Streaming and Royalty Corp.
The agreement includes concessions acquired by the company in Argentina via its acquisition of Minera Mariana Argentina SA in late 2020. The principal assets owned by Minera Mariana include the Las Calandrias and Los Cisnes projects, which are located in Santa Cruz province. In total, the projects consist of approximately 60,400 hectares with the bulk of the land holdings located on the property adjacent to Cerrado’s Mineral Don Nicolas (MDN) gold mine.
The agreement with Sprott broadens the stream area to include production from the Las Calandrias heap leach project where production is expected to start in the second quarter of 2023.
Cerrado the deal provides it with an additional US$10 million in funding in the form of an additional deposit against future production. The original streaming agreement entered was in 2020.
Payment of the deposit is expected to occur on March 7, 2023, subject to certain conditions.
“We are very pleased to be expanding our partnership with our friends at Sprott Streaming and Royalty,’’ said Cerrado CEO and Chairman Mark Brennan. “We view this additional investment as a strong indication of support for our ongoing development plans to increase the gold production capacity at MDN from 50,000 ounces to approximately 90,000 ounces by 2024 with ongoing development of two heap leaching facilities,’’ he said. “Further, the additional inflow of funds is expected to allow the company to capitalize on the success at Las Calandrias and provide additional non-dilutive financing to fund our development plans.’’
On March 2, 2023, Cerrado Gold shares closed at 88 cents and currently trade in a 52-week range of $1.96 and 69 cents.
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 in Tocantins State, Brazil.
At Monte do Carmo, Cerrado is rapidly advancing the Serra Alta deposit through feasibility and production. The Serra Alta deposit is estimated to host an indicated resource of 541,000 ounces of contained gold and an inferred resource of 780,000 ounces.
The company recently announced the discovery of a new mineralized zone at the Serra Alta deposit, which is located on its Monte Do Carmo project.
The company said the new mineralized zone, named E3, is situated approximately 150 metres to the east of the previously outlined east zone at Serra Alta.
News of the discovery was contained in a press release that also features new assay results from a continuing infill/condemnation and extensional drill program at the Serra Alta deposit.
Highlight results include FGO-014, which returned 4.0 metres at 59.97 g/t gold from 171 metres at the Gogo target, which is located 450 metres north of the Serra Alta deposit.