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Cerrado Gold Announces Potential UK Export Credit Agency Support for Project Finance at Its Monte Do Carmo and Mont Sorcier Projects

Jul 5, 2023

  • UKEF, the UK Export Credit Agency, selected from group of 4 compliant Expressions of Interest

  • Potentially up to US$610 million in Export Credit Agency ("ECA") support via long term ECA Project Finance to cover up to 70% of pre-production costs plus additional support to cover Interest During Construction and Insurance Premium Costs

  • UKEF's Expression of Interest will encourage a UK-led sourcing strategy while allowing flexibility for sourcing from other countries. Support available subject to standard project finance terms and successful due diligence

  • Process to appoint Mandated Lead Arranger(s) to commence shortly

TORONTO, ON / ACCESSWIRE / July 5, 2023 / Cerrado Gold Inc. (TSXV:CERT)(OTCQX:CRDOF) ("Cerrado" or the "Company") is pleased to announce that it has received and accepted Expressions of Interest ("EOIs") from UK Export Finance ("UKEF") to support potential export credit facilities for the Company's 100% owned the Monte Do Carmo Project in Tocantins State, Brazil ("MDC") and the Mont Sorcier Iron Ore and Vanadium Project in Quebec, Canada ("MS") held by its wholly owned subsidiary Voyager Metals Inc. The EOIs provide support for up to US$190 million for the MDC Project and up to $420 million for the MS Project; representing 70% of total capital expenditure, interest payable during construction, the political risk insurance premium as well as other approved expenditures for each project.

UKEF is a department of the UK Government and is the UK's official Export Credit Agency ("ECA"). UKEF operates under an Act of Parliament to support UK exports, predominately through the provision of 100% unconditional guarantees backed by the UK Government.

UKEF's engagement with the opportunity is at an early stage. UKEF's EOI is not a legally binding commitment and is subject to a series of standard project finance terms and due diligence, including, among others, suitable structured offtake contracts, the successful completion of the Definitive Feasibility Study (DFS), and an Environmental and Social Impact Assessment (ESIA) to Equator Principles. The EOI provides an indication of currently available country limits, an indication of the attractiveness of the project, and it covers, in principle, the level of financial support, their flexibility and desired conditions.

UKEF's EOI is in line with the OECD Arrangements for Officially Supported Export Credits and stipulates minimum UK content requirements whilst enabling equipment to be sourced locally and from other countries.

As previously announced on April 17, 2023 the Company appointed SD Capital Advisory Ltd and GKB Ventures Ltd ("S&G") to solict interest for Export Credit Agency backed Project Financing. As a result of this process the Company received 4 expressions of interest from ECAs around the world. The Company also received an expression of interest from an additional ECA on an untied basis which may be used to complement UKEF support. The company is very excited with the level of support and interest from the ECA market which highlights the potential for success of both of these projects.

The company has selected UKEF based on numerous factors related to the terms of the Expression of Interest and unique aspects of the capital spend at both MDC and MS.

Together with S&G, the company will now be soliciting interest from Project Finance Banks to act as Mandated Lead Arranger ("MLA") for the transactions. The Company expects to appoint an MLA by the end of July. Once an MLA has been appointed, detailed due diligence will commence with the aim of receiving final terms for the ECA backed Project Financing at MDC towards the end of the year.

Mark Brennan, CEO and Chairman commented "We are very pleased to partner with UKEF to bring both our Monte Do Carmo and Mont Sorcier projects into development. The support of the UK Government and UKEF is a testament to the robust and attractive nature of both the MDC and MS Projects and we look forward to working with UKEF and the future appointed MLA to complete project financing in the coming months."

He added, "We view ECA supported limited recourse Project Finance with each project undertaken on a ring-fenced, stand-alone basis, as an attractive form of long term Debt capital.

In addition, S&G's mandate has now been amended to include the structuring and arranging of ECA backed Project Financing for the MS Project.

About Cerrado

Cerrado Gold is a Toronto-based gold production, development, and exploration company focused on gold projects in South America. The Company is the 100% owner of both the producing Minera Don Nicolás and Las Calandrias mine in Santa Cruz province, Argentina, and the highly prospective Monte Do Carmo development project, located in Tocantins State, Brazil. In Canada, Cerrado Gold is developing it's 100% owned Mont Sorcier Iron Ore and Vanadium project located outside of Chibougamou, Quebec.

In Argentina, Cerrado is maximizing asset value at its Minera Don Nicolas operation through continued operational optimization and is growing production through its operations at the Las Calandrias Heap Leach project. An extensive campaign of exploration is ongoing to further unlock potential resources in our highly prospective land package in the heart of the Deseado Masiff.

At Brazil, Cerrado is rapidly advancing the Serra Alta deposit at its Monte Do Carmo Project, through Feasibility and into production. Serra Alta is expected to be a high-margin and high-return project with significant exploration potential on an extensive and highly prospective 82,542 hectare land package.

In Canada, Cerrado holds a 100% interest in the Mont Sorcier Iron Ore and Vanadium Project, which has the potential to produce a premium iron ore concentrate over a long mine life at low operating costs and low capital intensity. Furthermore, its high grade and high purity product facilitates the migration of steel producers from blast furnaces to electric arc furnaces contributing to the decarbonisation of the industry and the achievement of SDG goals.

For more information about Cerrado please visit our website at: www.cerradogold.com.

For further information, contact:

Mark Brennan
CEO and Chairman
Tel: +1-647-796-0023
[email protected]

Mike McAllister
Vice President, Investor Releations
Tel: +1-647-805-5662
[email protected]

Disclaimer

NEITHER TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

This press release contains statements that constitute "forward-looking information" (collectively, "forward-looking statements") within the meaning of the applicable Canadian securities legislation, all statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that discusses predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "believes" or "intends" or variations of such words and phrases or stating that certain actions, events or results "may" or "could", "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements.

Forward-looking statements contained in this press release include, without limitation, statements regarding the business and operations of Cerrado. In making the forward- looking statements contained in this press release, Cerrado has made certain assumptions, including, but not limited to the indicative nature of the support from UKEF and the Companies ability to secure an MLA and ultimately recievce terms for a Project Financing. Although Cerrado believes that the expectations reflected in forward-looking statements are reasonable, it can give no assurance that the expectations of any forward-looking statements will prove to be correct. Known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to general business, economic, competitive, political and social uncertainties. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this press release. Except as required by law, Cerrado disclaims any intention and assumes no obligation to update or revise any forward-looking statements to reflect actual results, whether as a result of new information, future events, changes in assumptions, changes in factors affecting such forward-looking statements or otherwise.

SOURCE: Cerrado Gold Inc.