NEWS

July 19,2021

CERRADO GOLD REPORTS STRONG Q2 PRODUCTION RESULTS FROM ITS MINERA DON NICOLÀS MINE IN ARGENTINA

•    Q2 and year to date production and operations well ahead of plan
•    Gold Equivalent ounces shipped for the 2nd quarter exceeds 10,000 ounces

TORONTO, ONTARIO - Cerrado Gold Inc. (TSX.V: CERT) (OTCQX: CRDOF) ("Cerrado" or the "Company”) is pleased to announce its production results for the second quarter of 2021 (“Q2 2021”) from the Minera Don Nicolás Mine in Santa Cruz Province, Argentina. Full financial results are to be released by the end of August. 

Q2 Operating Highlights

  • Gold production reported at 9,607 ounces for Q2 2021, a 28% improvement over Q1 2021 production of 7,485 gold ounces. Gold production exceeded managements budget by 10% for Q2 2021 and YTD production exceeds budget by 8%.  Management continues to target to exit the year at a production run rate of approximately 55,000 ounces per annum.

  • Production of Gold Equivalent ounces (“GEO”) ounces was 10,063 ounces for Q2 2021, a 48% increase over Q1 2021. 

  • Since Cerrado acquired Minera Don Nicolás, gold production has seen a steady month over month increase which has continued in the quarter, highlighted by 3,385 ounces produced in June 2021, a 7% improvement over March 2021 the previous best since Cerrado has taken ownership.  

  • GEO shipped for the quarter exceeded 10,000 ounces, a record for Minera Don Nicolás since start up and a significant increase from 6,793 ounces shipped in Q1 2021.           

 

The strong operational performance is the result of continuous improvement by the onsite team. The mining team has exceeded ore production and Au grade targets consistently year to date. Operational improvements around the processing plant have ensured an increase of approximately 20% on mill design throughput capacity on a sustained basis.
 

Mark Brennan, CEO and Co-Chairman commented “We are extremely pleased with the continuous improvement and the robust operational results that the Don Nicolás team has achieved in a very challenging COVID environment”. He continued, “Quarterly improvements encourage us to believe that we will achieve our production expectations of 45– 55,000 ounces Au annually”.  He continued, “The MDN team as a whole has to be commended for the strong performance it has been delivering in an exceptionally difficult environment; it gives us strong confidence that there is plenty of growth moving forward, especially once restrictions imposed by Covid are removed.”
 

Minera Don Nicolás has been operating the laboratory in house since January 2021. Sample turn around times have improved and as a result mine planning and ore control has been significantly enhanced. Gold grades are steadily increasing with 3.4g/t Au in mill feed reported for June 2021. We note that gold production year to date for the first half of the year alone of 17,091 oz Au exceeds the total gold production during Cerrado’s 9 month ownership in 2020. As previously outlined and based upon the current mine plan, overall ore grades are planned to see further improvement in the second half of the year as performance improvement programs continue and the mine fully catches up with delays caused by COVID 19 issues.


Please see below table for a summary of key highlights from Q2 2021 as well as the full period 2020.

Mining 
The mine design is based on standard open pit mining techniques of drill, blast and haul using contract mining to reduce upfront capital needs.  Based upon the newly expanded resource, GE21 has designed a  mine plan which extracts approximately 18.5 million tonnes of the current resource base over an 8-year mine life at an average strip ratio of 6.64 for the first 5 years and 10.9 to 1 over the life of mine.  The Phase I exploratory drilling program completed earlier this year, increased the mineral resources model mainly to the North and East, resulting in the extension of the open pit in the same direction resulting in a slightly higher strip ratio than the prior PEA, but significantly increasing recoverable ounces. Mining will reach nominal ore feed to mill in year 2 of approximately 2.6 million tonnes. Mining costs are estimated at US$1.70/t of material moved which is based on current costs at other regional operations.  The annual mining costs reflect adjusted haul distances and waste/ore ratios relative to the previous PEA completed in 2020 and as shown below.  

The steady increase in production numbers highlighted in Q1 continued in to Q2. Recovery issues in May caused by copper sulphide-bearing gold ore from our Paloma deposit resulted in a 5% drop in overall Au recovery for the month. Ore from this small copper rich area has been mined out and recovery levels have returned to more normal levels in June.   

Review of Technical Information 
The scientific and technical information in this press release has been reviewed and approved by Sergio Gelcich, P.Geo., Vice President, Exploration for Cerrado Gold Inc., who is a Qualified Person as defined in National Instrument 43-101.