Earnings call transcript: Cerrado Gold Q4 2025 sees stable production, stock rises

Cerrado Gold’s Q4 2025 earnings call revealed stable gold production levels and significant improvements in operational efficiency. Trading at $5.46, the stock has faced headwinds with a 37.57% decline year-to-date, though the company maintains a market capitalization of $872 million. According to InvestingPro analysis, the stock appears undervalued relative to its Fair Value, suggesting potential upside for investors willing to look past near-term volatility. The company’s focus on transitioning to a mixed production model and its ability to maintain stable production amid challenging conditions were key highlights.

Key Takeaways

• Cerrado Gold maintained stable production levels with 50,238 gold equivalent ounces for 2025.
• Q4 2025 saw a 20% reduction in all-in sustaining costs (AISC) to $1,391 per ounce.
• The company ended 2025 with a cash position of over $22 million, providing financial flexibility.
• The stock increased by 0.6%, reflecting positive market sentiment.
• 2026 production guidance is set at 50,000-60,000 ounces, with a focus on H2.

Company Performance

Cerrado Gold reported stable production for the full year 2025, with 50,238 gold equivalent ounces, matching 2024 levels. The transition from heap leach operations to a diversified production model, including underground mining, contributed to a significant reduction in Q4 AISC. This operational shift allowed the company to leverage higher production volumes, resulting in a 20% cost reduction compared to the full-year average. The company’s adjusted EBITDA reached $46 million, benefiting from elevated gold prices.

Financial Highlights

• Total Gold Equivalent Production: 50,238 ounces (stable YoY)
• Q4 2025 Production: 13,806 gold equivalent ounces
• Full Year AISC: $1,746 per ounce; Q4 AISC: $1,391 per ounce
• Adjusted EBITDA: $46 million for 2025
• Year-End Cash Position: Over $22 million

Outlook & Guidance

Cerrado Gold projects 2026 production to range between 50,000 and 60,000 ounces, with production weighted towards the second half of the year. The company anticipates AISC to be between $1,800 and $2,000 per ounce. Capital expenditure is expected to be around $30 million, primarily for the development of the MDN project. Analysts forecast earnings of $0.45 per share for fiscal 2026, with price targets ranging from $6.35 to $11.00, suggesting significant upside potential from current levels. The company plans to continue its aggressive exploration program with 50,000 meters of surface drilling.

Executive Commentary

Cerrado Gold’s management highlighted the strategic transition to a mixed production model, emphasizing its role in reducing costs and enhancing operational efficiency. The company is optimistic about its financial health, with a strong cash position and expected continued cash flow generation in 2026.

Risks and Challenges

• Potential supply chain disruptions could impact production schedules.
• Fluctuations in gold prices may affect profitability.
• Regulatory challenges, particularly in international operations, could pose risks.
• Environmental concerns related to mining operations may require additional compliance measures.

Cerrado Gold’s strategic initiatives and operational improvements position it well for 2026, with a focus on increasing production and maintaining financial stability. The company’s proactive approach to managing costs and leveraging high gold prices has bolstered its market position, as reflected in the positive stock movement.

Full transcript - Cerrado Gold Corp (CERT) Q4 2025:

Operator: Good day and thank you for standing by. Welcome to Cerrado Gold Q4 and year-end 2025 financial and production results conference call. At this time, all participants are in a listen only mode. After the speaker’s presentation, there’ll be a question and answer session. To ask a question during the session, you’ll need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today’s conference is being recorded. I would now like to turn the conference over to your speaker for today, Mike McAllister, Vice President, Investor Relations. Please go ahead.

Mike McAllister, Vice President, Investor Relations, Cerrado Gold: Good morning, and thank you, operator. I’d like to note that today’s call may contain forward-looking information that is based on the company’s current expectations, estimates, and beliefs. Please review this slide and the other forward-looking information contained on page two of today’s presentation, as well as in the company’s annual information form, which is publicly available on SEDAR+ and the company’s website. The accompanying presentation for today’s call is available for download from the company’s website at www.cerradogold.com. The accompanying press release is also posted on the website and on SEDAR+. Please note that all dollar amounts mentioned on today’s call are in US dollars unless otherwise noted. Following management’s presentation and remarks, a Q&A period will follow.

Joining us on the call today are Mark Brennan, our CEO and Chairman, Jason Brooks, our CFO, Cliff Hale-Sanders, our President, Ed Guimaraes, our Executive Vice President, Andrew Croal, our Chief Technical Officer, Carl Calandra, our Vice President and Legal Counsel, and David Ball, our Vice President, Corporate Development. With that, I’d now like to turn the call over to our CEO, Mark Brennan.

Mark Brennan, Chief Executive Officer and Chairman, Cerrado Gold: Thanks, Mike, and I’d like to thank everyone for joining us today. I’d also particularly like to thank the Cerrado Financial team and our auditors at McGovern Hurley and Grant Thornton for the delivery of the year-end results a full month in advance of the statutory requirement. You know, we’ve come a long way in the last two years on the financial reporting, and we’re thrilled. 2025 has been a very successful transitional year for the company. Not only did we make a lot of money, you know, leaving our treasury and financial position very strong, but we’ve also made significant investments into each of our three projects, setting the stage for future success and growth for 2026 and beyond.

Our EBITDA for 2025 was $46 million, with our closing balance of cash at over $22 million. This has grown materially in the first quarter, and our prospects for 2026 look significantly brighter with gold trading at the $4,600 level. The results achieved in the fourth quarter and for the full year demonstrate Cerrado’s ability to maintain production at our MDN operation with stable operating costs as we transition from solely heap leach driven production to production sourced from underground, the heap leach and existing low stockpiles. This process has continued throughout the first quarter of 2026, and we expect the underground to reach stable production levels in the latter part of Q2 of 2026.

Not only was 2025 successful operationally, but organizationally we have invested in people and systems to improve everything from cost control to reporting, which, as stated above, we are very proud to say has enabled us to release our financial results one month ahead of schedule. With elevated gold prices, we continue to generate significant cash flows, supporting our continued optimization and exploration efforts at MDN, which we expect will lead to an extension of the mine life and increased production. We expect to see robust economic potential with the completion of the bankable feasibility study at Mont Sorcier targeted for the Q2 this year. We continued the development process at the Lagoa Salgada project, while at the same time reducing debt and building a strong cash position, improving Cerrado’s overall financial strength.

Following robust levels of adjusted EBITDA in the fourth quarter of 2025, we continue to see strong cash generation into this quarter and throughout the year, especially now that the majority of our growth CapEx programs are nearing completion and the prior hedging program we had in place has been completed. Looking forward to 2026, operations at MDN are performing exceptionally well and we are benefiting from continued strong gold prices providing strong margins, leaving us to expect that the year will be another strong year for Cerrado. We are providing our 2026 production guidance at 50,000-60,000 ounces GEO with an AISC of $1,800-$2,000, with production weighted towards the second half of the year when the underground is expected to reach expected capacity.

Our focus for the coming year will continue to be on developing MDN, extending mine life, increasing production, and continuing to develop future cash generation by completing the feasibility studies at both our development projects in Portugal and Quebec with limited dilution. I’d now like to turn the call over to Jason Brooks to take us through the financial highlights.

Jason Brooks, Chief Financial Officer, Cerrado Gold: Thanks, Mark. Turning to slide three. In 2025, the company produced 50,238 gold equivalent ounces, with 13,806 gold equivalent ounces produced in the fourth quarter. Operational results for the full year 2025 showed stable production relative to the previous year. 2025 was a transitional year as the company shifted to rely on production from the heap leach operations at Las Calandrias, while the underground continued to ramp up towards the end of the year. Production rates would have been higher, however, the heap leach pad was irrigated less than usual due to water availability constraints caused by a very dry summer conditions late in the year.

The all-in sustaining costs for the full year came in at $1,746 per ounce, with Q4 all-in sustaining costs of $1,391 per ounce, which was a result of the higher production in the fourth quarter. The company continued to focus on operating costs. Sorry, excuse me. The company’s continued focus on operating costs enabled all-in sustaining costs to remain at relatively low levels despite inflationary pressures and higher water purchase costs in Q4. In 2026, the company is guiding gold equivalent ounce production between 50,000 and 60,000 ounces as the heap leach operation stabilizes at higher levels and more ounces come in from the underground this year. We expect that all-in sustaining costs will continue to moderate due to a reduction in water purchases and higher feed grades from the underground.

Production rates are skewed higher in the second half of 2026 due to mine sequencing, as more underground ore is expected to be available in the second half of the year. In 2025, driven by stable operating costs and much higher gold prices, the company generated adjusted EBITDA of $46 million for the full year and $22 million in the fourth quarter. Going into 2026, Cerrado’s production will be unhedged, allowing MDN operations to reap the benefits of the completion of its recent expansionary capital expenditure program to grow production through its new heap leach operations, as well as the availability of additional high-grade ore from underground operations. With the hedging program completed in 2025, Cerrado is now substantially exposed to record gold prices.

Additional investment plan for 2026, including an expanded heap leach pad, a new tailings area, additional fleet enhancements, and ongoing exploration activities, is positioning MDN for long-term success. Finally, the company finished the year with over $22 million in cash. Moving into 2026, given the current gold price environment, the company expects to continue improving its cash position above and beyond capital allocated to project growth plans. With that, I would now like to return the call back to Mark Brennan and take us through some production highlights and outlook for 2026.

Mark Brennan, Chief Executive Officer and Chairman, Cerrado Gold: Thanks, Jason. Turning to slide four. As we progress through 2026, we have a strong exploration program in place. We are targeting a surface exploration program of approximately 50,000 meters that does not include underground exploration. To accomplish this, we have acquired three owner-operated rigs. We now have three diamond rigs and one RC rig turning as we speak, with initial results continuing to be encouraging. While drilling performance is now on target, we continue to see some delays with assay results. We are in the process of certifying our internal lab to shorten turnaround times and improve exploration performance and targeting. We will be releasing results to the market when we can demonstrate critical mass and new ore bodies. Cerrado’s target is to expand the current mine life to at least 6+ years and grow production.

We also plan to have a fifth drill arriving in August that will focus on exploration at the Paloma underground site, which is open at depth and along strike, where exploration success has the potential to increase grade to the mill and potentially materially boost production rates. As we progress into 2026, our focus remains on ramping up underground production during the second and third quarters. As water availability returns as we enter the rainy season, heap leach production levels should recover to nameplate capacity and contribute to lower costs. We also have extensive operational optimization programs underway at MDN. As these programs are completed, we expect it will result in reduced unit costs and expanded production capabilities.

As previously mentioned, 2025 was a very successful transition year for the company, with significant investments made to advance our projects and set the company up for future mineral resource and production growth at MDN and advance our development projects with optimized feasibility studies and a production decision at Lagoa Salgada in Portugal expected in Q3. As previously announced in early 2026, we are working with various government agencies in Portugal to resolve the current impasse with respect to the granting of the environmental impact approval given that Cerrado received a notice that the Portuguese environmental agency had purported to issue an unfavorable opinion for the Lagoa Salgada project, contrary to what we believe is contrary to applicable laws and regulatory framework.

We expect to be in a position to provide greater detail in the coming weeks as to the resolution of this matter. At Mont Sorcier in Quebec, we are nearing completion of our feasibility study expected by the end of Q2 2026, and the submission of the environmental impact assessment by year-end. In 2026, we completed just under 18,000 meters of drilling to support upgrading the resources to reserves. As highlighted in Q4, the project is set to be developed into a phase 8 million ton per annum project, producing over 67% high grade, high purity iron ore concentrates in two phases of 4 million tons per annum. This should also lead to more optimal phasing of capital costs where we are seeing some upward pressure.

The market for high-grade iron concentrates remains robust, with a significant premium seen in the market for Mont Sorcier’s high-grade, high-purity material, which we anticipate will translate into strong support for the project in the global iron ore market.

We continue to see that a strong value proposition for Cerrado remains in place, with significant cash flow growth and minimal shareholder dilution needed as we advance all three projects, targeting higher cash flow and production rates. We continue to believe our shares are trading at a material discount to our peers and we anticipate we can close this gap as we continue to deliver on production, cash flows, and project development. This concludes the present portion of the call. I will now turn the call back to Lisa to open the call for the Q&A portion of the call.

Operator: Thank you. As a reminder, if you would like to ask a question, please press star one one on your telephone. You will hear that automated message advising your hand is raised. If you would like to remove yourself from the queue, press star one one again. We also ask that you please wait for your name and company to be announced before proceeding with your question. One moment while we compile the Q&A roster. Our first question will be coming from the line of Ron Stewart of Red Cloud Securities. Your line is open.

Ron Stewart, Analyst, Red Cloud Securities: Good morning, Mark. Good morning, everyone. Congrats on getting the news out. Mark, I might have missed it, but do you have guidance of sustaining capital, development capital, and exploration spending for 2026?

Mark Brennan, Chief Executive Officer and Chairman, Cerrado Gold: Are we in? We dropped again. Stupid call. I’m sorry, did you get my question? On here, we just dropped. Could you please repeat that question one more time?

Ron Stewart, Analyst, Red Cloud Securities: Yeah, no worries. Do you have guidance on sustaining capital, development capital, and exploration spending for 2026?

Mark Brennan, Chief Executive Officer and Chairman, Cerrado Gold: We’ll be using an all-sustaining cost guidance of $1,800-$2,000 per ounce. We’re targeting 50,000 meters of surface drilling with additional underground drilling. We have ordered an underground rig that should be delivered July, August. It’s a very difficult time to find rigs right now for underground exploration. We’ll have that on site by July, August. We expect-

Ron Stewart, Analyst, Red Cloud Securities: Uh, and you-

Mark Brennan, Chief Executive Officer and Chairman, Cerrado Gold: We expect that we could see an additional, you know, 10-20,000 meters of drilling underground.

Ron Stewart, Analyst, Red Cloud Securities: No, I’ve got that. I was wondering whether or not you provided guidance as to the costing and whether or not the drilling is going to be capitalized or expensed.

Mark Brennan, Chief Executive Officer and Chairman, Cerrado Gold: The drilling for underground will probably be capitalized. In terms of guidance of cost, if you’re looking for a guidance on, we’re probably looking at around, because they’re our own rigs, they’re probably around $250 a meter, excuse me.

Ron Stewart, Analyst, Red Cloud Securities: Okay. Okay.

Mark Brennan, Chief Executive Officer and Chairman, Cerrado Gold: Does that answer your question?

Ron Stewart, Analyst, Red Cloud Securities: The total capital spending that you’re anticipating for advancing the projects?

Mark Brennan, Chief Executive Officer and Chairman, Cerrado Gold: Oh, excuse me. We’re spending approximately $30 million of CapEx at MDN this year.

Ron Stewart, Analyst, Red Cloud Securities: Okay. Okay, thank you.

Mark Brennan, Chief Executive Officer and Chairman, Cerrado Gold: Thank you, Ron.

Operator: Thank you. One moment for the next question. Our next question will be coming from the line of Heiko Ihle from H.C. Wainwright. Your line is open.

Heiko Ihle, Analyst, H.C. Wainwright: Hey. Excuse me. Hey, everybody. It’s Heiko Ihle from H.C. Wainwright. Two things. With the water availability at the MDN, first of all, what have you seen recently? Second of all, how should we think of this going forward? Is there presumably more variability going forward? Or should we really just look at this as getting better with time?

Mark Brennan, Chief Executive Officer and Chairman, Cerrado Gold: Are you speaking specifically on the second point, Heiko, to the water or in general?

Heiko Ihle, Analyst, H.C. Wainwright: I thought with just the water, but if you wanna answer both, by all means, go ahead.

Mark Brennan, Chief Executive Officer and Chairman, Cerrado Gold: Yeah. I guess for the 25-26 summer months in Argentina, we’ve had a particularly dry season. Combined with that, we also saw one of our water wells had depleted. Our usual capacity requirement is about 45 cubic meters. Basically, with the dry weather that we experienced, we’re having to bring in about 60 trucks a day to provide water in order to continue the operations. Now, this had an impact as highlighted on the heap leach irrigation and therefore production. You know, what we’re finding now is that we

That was costing us, excuse me, about $850,000 a month for that water. I’m very pleased to say that on the water reservoir perspective, we’ve actually drilled a borehole that has basically about 30 cubic meters, which fulfills, you know, 70% of our production requirement. Then on top of that, we’re also moving into the rainy season starting in late April. We’re expecting that we’re not gonna have the same issue. Our water costs have dropped down to about $250,000 a month from $850,000 a month.

Again, this was a fairly unusual and unique dry I guess summer that we’ve experienced. From that regard, you know, we’re obviously being very careful with what we’re looking forward to what’s potentially in the fall of 2026. We’re hopeful that we won’t have a repeat of the dry season that we’ve experienced. That kind of puts in place the water situation. We are looking at other ways to, you know, we are looking for other water reservoirs that we can tap for all of our water needs.

As it relates to the project in general, I think what you’ve seen at the site and, you know, when we mentioned that last year was a transitional year, it really took us away from being, you know, fighting our way through deposits. We’ve now really come much more into a management of the asset perspective as opposed to continually driving projects that had to contain or continue our sustainability. I’m seeing much more efficiencies, much more attention to long-term value add, like increasing our fleets, you know, one, increasing the fleet, two, increasing the loaders, you know, and then the trucks that are transporting from 30 tons to 45 tons.

We’re seeing operational advantages that we’re implementing now that’ll have long-term implications. I fully expect that, you know, we’ll continue to see, as the second half rolls on, we’ll continue to see lower costs. Again, our objective with our drill program, with our corporate development, is that we will continue to see resource growth and potential for expansion of life of mine and production levels.

Heiko Ihle, Analyst, H.C. Wainwright: That was comprehensive. Thank you. I have a feeling the next one’s a little bit more touchy-feely. I’m trying to figure out how we should handicap Lagoa. I mean, if you were in my shoes and you know what the analyst community goes through, Mark, how should we handicap this thing, model this thing? If you were in my shoes, what would you do?

Mark Brennan, Chief Executive Officer and Chairman, Cerrado Gold: I think that as mentioned in the core of the discussion and you know we’re very confident in our case and that we feel that you know there’s been irregularities in process and timing and in conclusions that were not regular. We’re hopeful, Heiko, that within a period of two months, certainly by the end of the quarter, we’ll have a resolution that’s satisfactory to all parties.

That’s being accommodated you know, with the intervention of the Portuguese government, who are dealing with Lagoa and Cerrado and dealing with APA, the regulatory agency on the other hand. You know, there’s negotiations, discussions going on. Again, we’re hopeful that there’ll be a resolution within the next 2-3 months. I guess in terms of how do you handicap this, that’s a tough one. The reality is that

Heiko Ihle, Analyst, H.C. Wainwright: Sure

Mark Brennan, Chief Executive Officer and Chairman, Cerrado Gold: You know, what I would perhaps, you know, to a certain extent, I would defer the decision if you can till the end of the second quarter. In the absence that you can’t, I mean, I think you determine what, you know, whether you handicap it, you know, 20%-80%. That really is gonna be on your perspective of risk. What I would say is that, you know, when I look at the valuation for Cerrado right now, forget about Portugal or even Quebec for that matter, we stand on our own in terms of our value proposition with MDN on its own.

I can’t imagine or I don’t believe that Lagoa has, you know, has, is having, you know, should have the impact with respect to the potential that we see for MDN in the coming few months. I wish I could give you something more definitive, but it really is gonna depend on your risk tolerance and how you feel that people should, you know, how people pursue it. I mean, our internal view is that we’re still looking to enter into the construction phase in the first quarter of next year.

Heiko Ihle, Analyst, H.C. Wainwright: Okay. Fair enough. I will get back to you. Thanks for the two comprehensive answers there, my friend.

Mark Brennan, Chief Executive Officer and Chairman, Cerrado Gold: Thank you, Heiko. Really appreciate it.

Operator: Thank you. As a reminder, if you would like to ask a question, please press star one on your telephone. One moment for the next question. Our next question will be coming from the line of Colin McClelland of The Northern Miner. Your line is open.

Colin McClelland, Analyst, The Northern Miner: Good morning. Thanks for taking the question. Most of it’s been answered. I was interested about Lagoa. It appears like you guys were blindsided on the water issue. I just wondered what happened there. You were surprised. How come you didn’t know there was an issue with it?

Mark Brennan, Chief Executive Officer and Chairman, Cerrado Gold: Well, technically, there wasn’t. You know, what’s very unique and when we speak of irregularities, in May, we were informed by the APA that of their technical evaluation committee, we had the first project in the history of Portugal that had unanimity with its evaluation of 17 strong divisions that look after the technical evaluation for APA. That we had, again, that we had unanimity with all members of the 17 strong committee approving the project. Now, at that time, we also were considering looking at leaching our precious metals, so we had a small component of cyanide usage, which the president of APA did not want us to proceed with, which we kind of understood.

Even at that stage when in May of last year, we had already moved to flotation and the precious metals, and we’re not gonna use cyanide anyway. In their second point that they made to us in May was that they wanted us to enhance the protection of the aquifer, but only the aquifer that was being utilized by the local community. In our instance, there’s three aquifers. There’s one aquifer at, say, 10 meters, which is used for the agricultural community. If there’s rain, they use it. If there’s no rain, they don’t get it. At a depth of 35 meters is the main aquifer that’s used by the local community.

That aquifer, you know, is what they asked us in May to continue to protect. The third aquifer, which is actually where we’re drawing our water from, is already contaminated by sulfides and acid drainage. That can’t be used by the agriculture community. It cannot be used by the local community. We never had any problems or no issues commented to us in May about the deeper aquifer. When they came back with the decision in January, they did not refer to the two upper aquifers. They only referred to the deeper aquifer, which they had never suggested any issues with in the past.

Now, I’ll mention that I believe, Colin, that we have probably one of the most sophisticated hydrological studies conducted in Portuguese history. The reason for that is that we have an expert in Spain who’s, you know, renowned as one of the leading experts on water resources, mine water resources management. He actually runs the International Mine Water Association. The fact is that we had very comprehensive layout and plans as it relates to all three aquifers. When they gave us the final decision, which related to only the deepest aquifer.

First of all, that was a contravention of permissible questions allowed under the rule of law. Second of all, they didn’t give us an opportunity to respond to their question with respect to the deeper aquifer. Basically, we had our fellow in Spain provided a 120-page response to their question, which again, we feel sufficiently answered any questions that they may have or any issues that they may have. They did not even take the time to review that response before they gave us the negative opinion.

It’s our strong belief that there have been irregularities, not only in the timing and, but also in the process as well as the technical evaluation of the project. We think that they’re quite evident. As a consequence, we’re hopeful that we will have a positive forward dialogue with the Portuguese government and the development of Lagoa Salgada moving forward.

Colin McClelland, Analyst, The Northern Miner: Okay, just a quick follow-up then. One of the mayors over there seems to be, you know, he’s jumping up and down a bit about it. You guys are reaching out, trying to persuade him or talk to him about the issues?

Mark Brennan, Chief Executive Officer and Chairman, Cerrado Gold: Well, you know, what’s very interesting is we had a very positive relationship with that mayor up until the last election. You know, obviously, as you can imagine, you know, a mining project in anybody’s backyard is highly controversial. The funny thing is that with this particular mayor, we had a tremendously strong relationship with him.

What was interesting is that up until the inauguration date, let’s say, which I believe was in September, let’s say it was the fifteenth of September, which is a Saturday, there was an official and formal inauguration, which we were invited to, which we participated in, which we were you know kind of feted, I guess, for lack of a better word. At that Saturday, you know, there was a meeting set up for the following Friday, and at that point, the mayor went dark and he went on a totally different course than he had had with us. We had a phenomenal we had a...

You know, just so you know, over the course of the past eight years, we have had a phenomenal relationship with the local community, with the federal community, and we’ve never had any injunctions. We’ve never had any issues with any of the local community until this mayor frankly had a totally 180-degree change in his perspective, which we don’t understand. We’re still trying to understand how that perspective came about, and why that perspective came about. You know, we know that there’s a real estate community called Conforto that they’re developing two golf courses and very luxurious homes. You know, perhaps we’re an inconvenience to that development.

Again, what we would say is that there are high irregularities in the whole process here.

Colin McClelland, Analyst, The Northern Miner: Right. How far is that luxury development away from you guys?

Mark Brennan, Chief Executive Officer and Chairman, Cerrado Gold: Well, in terms of distance, it’s about 35 km. Really, we don’t feel it should have any impact, although it is still within the Grândola jurisdiction. Second of all, you know, probably more importantly, is that the project is, it’s almost completed its selling process. Once that sales process is completed, my guess is that people are gonna change their tune on Lagoa fairly considerably.

Colin McClelland, Analyst, The Northern Miner: Great. Thanks very much.

Mark Brennan, Chief Executive Officer and Chairman, Cerrado Gold: Thank you, Colin. I appreciate the question.

Operator: Thank you. At this time, there are no more questions in the queue, and I’d like to turn the call back over to Mike. Please go ahead, Mike.

Mike McAllister, Vice President, Investor Relations, Cerrado Gold: Thank you, operator. We’re just gonna check the webcast just to see if there’s any questions that have come in through that. We do have a few here. The first one is from Matt Crabbe. He’s asking when if we anticipate any release of the drilling results at MDN.

Mark Brennan, Chief Executive Officer and Chairman, Cerrado Gold: We’re proceeding with the drilling, you know, we’ve had some very interesting progress there. We have two areas that look highly prospective. We’re drilling with the area called Soforo S, which is just east of and south of the Paloma underground pit. On top of that, we’re also looking at an area in the southern zone called Baritina and Chilongo, which looks very interesting as well.

Now, the issue that we have in terms of producing and publishing results is that what we need to do there is to really have a density of drilling that we can actually come out with, you know, what we would consider to be resource worthy kind of size. That’s really what we’re looking to put out. I would say that by mid-year, we’ll be able to come out with hopefully some greater progress and discussion on that, certainly before mid-year.

Also, you know, we are looking to be able to, within that timeframe, also provide evidence to the market that we can, you know, expand our life of mine and look to potentially double that life of mine. That’s something we’re still focusing on in the midterm, short term as well.

Mike McAllister, Vice President, Investor Relations, Cerrado Gold: We also have one other follow-up call or question from Matt regarding the company’s buyback. He’s asking if the company bought back, and if so, how many shares during the quarter?

Mark Brennan, Chief Executive Officer and Chairman, Cerrado Gold: Yeah. We bought a total in our buyback of about 380,000 shares or just under 400,000 shares of a total buyback of 6.4 million. You know, our treasury is building up very nicely and you know, we’re buying shares on a daily basis. However, you know, what we’re kinda contemplating, we’re waiting for is to see if the markets have any significant sell-off and looking at that as potentially an opportunity to come in and buy a larger bulk of shares.

I mean, we tend to think that the hostilities in the Middle East are probably gonna continue a little more than people were looking for as of yesterday. Today it’s a different day. We think that there’s still probably some capitulation in the markets and potential for capitulation in the market, and we think we can use that as an opportunity to buy our shares at that time.

Mike McAllister, Vice President, Investor Relations, Cerrado Gold: Just one follow-up question. He’s asking, in terms of, Eric Tremblay’s asking, will you receive any funding or grants from the Canadian government for the development of the Mont Sorcier project?

Mark Brennan, Chief Executive Officer and Chairman, Cerrado Gold: I think it’s an avenue we could pursue, but as we’ve really tried to highlight to people, we don’t need the money from the Canadian government. One of our, you know, strongest positions here is that we have the support of UKEF, which is the U.K. Export Credit Agency, and we believe in conjunction with another development agency that we’ll be able to fund this project to the tune of about 70%. On top of that, we believe that the other two remaining sources of funding, which would make up the 30%, we believe offtake and potential stream could help us a long way towards completing that.

Then by 2028, when we anticipate being in construction, we believe we’ll have a cash position that can furnish the balance. In terms of our mantra, as you guys are well aware, as per the same response for Portugal, you know, we really believe that there’s a strong possibility that we can develop these three projects from our own cash flows, as well as through means which are non-dilutive and predominantly through offtaker agreements or potential sales streams, although we know that the long-term costs of streams. You know, again, we’re building a very strong cash position.

We’re seeing that expand with Lagoa potentially coming on stream in 2028, that would put us in a position where you know, if I’m looking at today’s market, we’re probably generating $200 million of cash flow. So we’re really building up some momentum here, that I think we’ll be able to sustain and grow these projects without the requirement for dilution.

Mike McAllister, Vice President, Investor Relations, Cerrado Gold: Great. One other one. The company has stated that the production is back-end loaded in the year. How many ounces do you expect will come from the underground in the latter half of the year and estimate on that grade of those ounces?

Mark Brennan, Chief Executive Officer and Chairman, Cerrado Gold: My guesstimate would be that we’re looking at something in the region of about 1,000 ounces a month or so. Now, you know, remember, the purpose of the underground development was not to go and we have a plan where we see about. We published a PEA that basically had a 30,000 ounce resource underground. I believe that, you know, the objective that we have is not to really go underground to produce the existing resources that we have. Really is to go underground and start drilling aggressively to grow the resources. That’s what we’ve seen at our neighbors at Cerro Negro, at Cerro Moro, at Cerro Vanguardia, at Cerro Negro.

Really underground is where you start to see the rubber hit the road. You know, for the most part in on the massif, you tend to see, you know, fairly vein structures that are dispersed, that they are small, but multiple. They are a large number of them. The fact is that as you move underground, you tend to find vein structures that are more complete and larger. That’s what we’re anticipating that we’ll see. We really need to go down there and drill aggressively, which we’ll do as soon as we receive the rig, which will be in July or August.

It leads to the question that, you know, with a little bit of success, and our average grade that we’re contemplating is about 5 grams per ton in our budget. When we were mining the Paloma pit above the underground, you know, we’re averaging 7-8 grams. I think that, you know, the potential here is that, you know, that we can see with any success with the drilling, with the open pit, with the surface drilling, the underground, you know, we can really see our production expand fairly dramatically. We have all the infrastructure in place to develop it.

It really is just resource management that we need to develop and expand the expansion of the resources, which we’re obviously focusing on now for the first time in our history of being at the mine. We’re very optimistic that at some point the shoe will drop. We’re just not sure when that’ll be.

Mike McAllister, Vice President, Investor Relations, Cerrado Gold: Follow-up question from Stijn Schmidt. He’s mentioning that we have mentioned limited dilution multiple times. What dilution do we foresee, or could we do these, advance these projects with no dilution?

Mark Brennan, Chief Executive Officer and Chairman, Cerrado Gold: My preference would be for no dilution, obviously. You know, one has to consider the variabilities of market conditions. The mining sector, as we all know, is a very volatile space. You know, what we’re seeing now, for example, in Portugal, just to give you a little bit of color, on our position with funding of Lagoa Salgada, is basically, we have, you know, again, the support of the UK Export Credit Agency for 70% project funding. You know, the addition—On, let’s call it a, for example, a $200 million CapEx.

If we’re looking at $140 million coming from UKEF and Santander Bank, who are working with UKEF. Basically, the $60 million that we require due to the fact that Boliden has acquired Neves-Corvo and the large number of the trading groups, and even Boliden for that matter, are looking for more ore to go into their smelters. We believe that the current dynamic is that we can use traders to actually help us fund the development of the balance of the capital required. Therefore, you know, I think there’s a strong belief that we have that we could fund that project with third-party money.

If we need to put in a little bit of capital, we’ll be more than strong enough in our own cash position to actually supply that capital ourselves. That means we’re not contemplating substantial dilution. If we look at a much bigger capital program in Quebec, we believe the same is true. We may have to rely a little bit on the stream if necessary, but we believe through project funding, offtake, and our own cash position, we should be able to cover the majority of the funding required. I can’t make the promise we won’t dilute, and that’s why we don’t say we will never dilute. Our hope is that that’ll be the ultimate endpoint.

Mike McAllister, Vice President, Investor Relations, Cerrado Gold: Great. Then just one last question regarding recoveries for the heap leaching. They noticed 32% for the year. Is that what we expect going forward, or could we expect increased recovery from the heap leach?

Mark Brennan, Chief Executive Officer and Chairman, Cerrado Gold: I mean, it really depends on whether you’re producing the sulfides or the oxides. You know, you correctly highlight that we’ve been producing from the sulfides, and so the recoveries have been a little bit lower than normal than what we anticipate. I would expect that those recoveries will improve, you know, as we move into other areas. I would expect, you know, for the sulfides, we’re probably running 35%-40% recoveries. Then for the oxides, we’re probably closer to 60%. Obviously, the oxides are probably running lower grade than what we see in the sulfides.

Mike McAllister, Vice President, Investor Relations, Cerrado Gold: Great. There’s no more questions from the webcast portion of the call. I’ll now turn the call back over to Mark Brennan just for any closing comments.

Mark Brennan, Chief Executive Officer and Chairman, Cerrado Gold: Well, thank you everyone who joined us today. As a reminder, the recording of this call, along with the presentation, will be available on the company’s website at cerradogold.com. For any follow-up questions or concerns, you can find our contact details on our website. You know, and thank you very much for your support, interest, and following the Cerrado story. With that, operator, thank you very much. I think that concludes our call.

Operator: Thank you. This does conclude today’s program. You may all disconnect.

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