Cerrado Gold Update & Presentation

July 1 2020

Dear All,
Happy Canada Day for those of you in Canada and likewise for those in the US for the  upcoming Independence Day long weekend.
We are making very good progress with our efforts in Argentina with our MDN acquisition even though we have been hampered by Covid-19 operating conditions.
Please see the presentation to help with this update.
Just prior to the completion of our acquisition of MDN in mid-March we added Mr. Kerry Barker as General Manager, who in turn brought in Mr. Roque Pereyra as our senior Mine Planner. Kerry was formerly running the Katanga Mine in the DRC and Roque was formerly the mine planner at Arequipa. They have done an amazing job to date and we are thrilled to have them on our team. We are also very pleased to have added Mrs. Veronica Nohara as our Country Manager for Argentina based in BA.
Now that we have possession of the MDN Mine, we have scrubbed and rescrubbed our geological models numerous times and are very happy with the initial premise of our analysis and investment.
We have engaged SRK to provide a 43-101 compliant Resource Report, expected by the end of August, and a Reserves Report by the end of October.
With respect to the plant, we have successfully increased daily feed from 900 tpd to 1100 tpd and are now moving to test 1200 tpd. Also, our recoveries have moved from 88% to 92% since we acquired the mine, and we are targeting 95% by year end.
The biggest challenge/ short term opportunity that we see at MDN is mining and the optimization of mining procedures (again in line with our initial investment thesis). Of note, this includes very little additional capex.
Operations have been somewhat constrained due to Covid-19 isolation and the associated modified operating procedures, however even though the mine operated at 25% capacity in April and 50% capacity in May, MDN still made strong free cash. Our first “normal” full shift occurred on June 2nd and our focus has been on retraining and restructuring the mining team/ operations to focus on the new mine plan, sequencing and operating procedures.
Roque has recently completed Cerrado’s 3rd iteration of the pit shell designs and mine plan and while more complete and detailed (aided by our being in possession of the mine), the results fall in line with our original investment thesis.
The major opportunity that will generate strong free cash moving forward will be focused on ore control and dilution via mining. 
We have substantially altered the mine plan and sequencing, reduced many benches to 2.5 metres from 5 metres, reduced mining polygons, painted extraction polygons on the mine floor, added ore spotters to aid reduction in waste, are removing ore during the day shift versus at night,  are instituting a sampling program that will see 2-300 samples per day from the mine versus 20 previously…all processes focused on reducing dilution and waste feed to the plant.
With these and other new selective mining procedures in place we expect to see a dramatic increase in the average grade feed to the mill. As a reminder, MDN is a high grade open pit mine with +5 g/t average grade.
On the exploration front, we have been very pleasantly surprised by the number of high grade (+5-10g/t) satellite deposits that have had extensive drilling and/or work but have not had resource models developed nor were included in our original estimates. We are very confident of the strong potential to increase our resources moving forward.
In Brasil, we continue to drive the Monte do Carmo project through desk top analysis. We are currently focused on a thorough review of geological structure.
On the Corporate front we are moving forward with bringing MDN into 43-101 compliance and implementing the mining improvements that will lead to a successful IPO.
We are currently looking to raise US$5 million at a price of US$0.80 ($47 million market cap) and would welcome anyone’s participation should they wish to invest (see term sheet). While we do not need funds for operations we see great advantage to position key institutions ahead of the IPO and feel an increase of resources in Brasil will materially help valuation for the IPO.
Use of proceeds will be $4 million for Brasil which is targeted to take resources to 1.4 million ounces at Serra Alta and $1million for working capital. 
We will also complete a PEA shortly thereafter, although this may or may not be completed by our targeted timeframe for an IPO (Q4/Q1 2020).
I would welcome any questions, comments or suggestions that you may have.
Again, thank you for your support.