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Cerrado Gold Inc. Announces Significant Transaction with Hochschild Mining Subsidiary

TORONTO, ON / ACCESSWIRE / March 5, 2024 – Cerrado Gold Inc. has officially engaged in an option agreement with Amarillo Mineração do Brasil Ltda., a wholly-owned subsidiary of Hochschild Mining PLC, offering Amarillo the option to acquire a 100% interest in the Monte Do Carmo gold project located in Tocantins, Brazil. This strategic move, offering a total consideration of US$60 million (approximately C$80 million), aims to strengthen the company's balance sheet amidst the junior mining sector's liquidity challenges.

The payment structure outlined includes an initial US$15 million secured, interest-bearing loan. A portion of this loan has already been provided, with the balance contingent on shareholder approval. Furthermore, an additional US$45 million is payable in four installments over three years post-approval. This transaction signifies Amarillo's operational control over the Monte Do Carmo project, with a commitment of at least US$5 million in qualifying expenditures.

CEO Mark Brennan highlighted the transaction's capacity to bolster Cerrado's short-term capital and working capital needs. He emphasized the company's potential for growth through the operational Minera Don Nicolas gold mine and the Mont Sorcier development project in Quebec, despite the current funding challenges faced by junior mining entities.

The agreement is subject to various conditions, including shareholder and regulatory approvals, with a closing contingent on Amarillo exercising the option and completing requisite payments. This deal reflects Cerrado's strategic pivot to secure financial stability and growth amidst a tough liquidity environment for junior miners.

R. H.

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