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Cerrado Gold Commences 12,000 Metre Drill Program at the Minera Don Nicolas Gold Project in Santa Cruz Province, Argentina

Feb 1, 2021

12,000-metre drill program focused on brownfield targets to expand high grade resources at Minera Don Nicolas project

Toronto, Ontario–(Newsfile Corp. – February 1, 2021) – CERRADO GOLD (“Cerrado” or the “Company”) is pleased to announce the commencement of its 2021 exploration drill program at the Minera Don Nicolás Project (“Minera Don Nicolás” or the “MDN Project”) located in Santa Cruz province, Argentina. The new drill program is expected to consist of approximately 12,000 metres of core drilling and supporting assay work to build upon the current resources outlined at the MDN Project. Cerrado expects the program to be completed by July 2021 with the publication of a new 43-101 Mineral Resource estimate thereafter.

Mark Brennan, Co-Chairman and CEO commented, “We are very excited to commence our first formal exploration drilling campaign at Minera Don Nicolás, located in the prolific Deseado Massif in Santa Cruz Province. Our program will focus on near mine, high grade brownfield prospects and will leverage off significant historical drilling from which we expect to be able to quickly add additional resource ounces near to our existing mining operations that we can ultimately bring into the mine plan.”

This new drill program is aimed at expanding the recent updated Mineral Resource estimate with an effective date of August 31, 2020, posted on the Company’s website, that was prepared by SRK Consulting (Canada) Inc. (“SRK”) in accordance with the Canadian Securities Administrators’ National Instrument 43-101 and Form 43-101F1 (See PR October 20, 2020). The current NI 43-101 Mineral Resource estimate is outlined below:

Table 1: Mineral Resource Statement*, Don Nicolás Project, Santa Cruz, Argentina, SRK Consulting, August 31, 2020

Category Quantity Grade Metal
Au Ag Au Ag
tonne gpt gpt Oz oz
Open Pit** Cut-off 0.3 g/t gold
Measured 249,400 4.32 5.50 34,668 44,100
Indicated 820,600 5.77 9.61 152,237 183,126
Measured and Indicated 1,070,000 5.43 8.39 186,905 227,226
Inferred 4,108,400 1.59 3.75 210,476 195,252
Underground** Cut-off 3.0 g/t gold
Measured 0 0.00 0.00 0 0
Indicated 56,200 6.59 8.12 11,903 14,677
Measured and Indicated 56,200 6.59 8.12 11,903 14,677
Inferred 555,300 7.74 8.41 138,217 124,867
Combined Mining
Measured 249,400 4.32 5.50 34,668 44,100
Indicated 876,800 5.82 9.48 164,140 197,803
Measured and Indicated 1,126,200 5.49 8.37 198,808 241,903
Inferred 4,663,700 2.33 4.78 348,693 320,118

 

Notes:
*- Mineral resources are reported in relation to a conceptual pit shell. Mineral resources are not mineral reserves and do not have demonstrated economic viability. All figures are rounded to reflect the relative accuracy of the estimate. All composites have been capped where appropriate.
**- Open pit mineral resources are reported at a cut-off grade of 0.3 g/t gold for the open pit portion and 3.0 g/t gold for the underground deposits. Cut-off grades are based on a price of US$1,550 per ounce of gold and gold recoveries of 95 percent at Martinetas and 88 percent at La Paloma, without considering revenues from other metals.

The 2021 exploration program is comprised of 12,000 metres of diamond drilling. This program will consist mainly of step-out and downdip drilling to target extensions of gold mineralization and a modest amount of infill drilling to upgrade resources. The primary areas of focus for the program will be to build on the numerous exploration targets that have been defined by limited historical drilling, such as the Esperanza and Paula Andrea (Baritina, Chulengo, Ariana, Carcol targets) areas, and upgrade these to NI 43-101 compliant status. The current program is in addition to current RC drilling by the mine for infill and grade control used to extend the current mining areas of La Paloma and Martinetas both along strike and at depth.

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LA PALOMA MINING GROUP 2021 DDH PROGRAM

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MARTINETAS MINING GROUP 2021 DDH PROGRAM

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Review of Technical Information

The scientific and technical information in this press release has been reviewed and approved by Robert Campbell, P.Geo., Vice President, Exploration and Director for Cerrado Gold Inc., who is a Qualified Persons as defined in National Instrument 43-101.

Minera Don Nicolás Overview

Minera Don Nicolás is located 1,625km south west of Buenos Aires, Argentina in the Deseado Massif region in the mining friendly province of Santa Cruz. The project is comprised of several exploration concessions totaling 333,400 Ha’s. The largest regional centre is Comodoro Rivadavia, which provides logistical and other support for the operations.

MDN Project is situated within the world renowned Deseado Massif where the underlying geology of the region is dominated by rhyolitic and andesitic volcanic and tuffaceous volcaniclastic lithologies of Middle to Upper Jurassic age (130 to 170 ma). It is criss-crossed by numerous extensive fault and fracture zones, which served as conduits for hydrothermal activity during periods of Jurassic volcanism. The result of this activity is a widespread network of shallow level mineralized “epithermal” fissure veins, breccias, and stock-work systems, many of which carry potentially economic Au and Ag mineralization. The Deseado Massif region is host to several epithermal gold-silver deposits and several multi-million ounce gold deposits, including Cerro Vanguardia (Anglo Gold), Cerro Negro (Newmont GoldCorp), Cerro Morro (Yamana).

In February 2012, Minera IRL published a Full Feasibility Technical Report in accordance with National Instrument 43-101 (“NI 43-101”). Construction of the facilities was completed in 2017 and production has been ramping up to full capacity between 2018 and 2021.

Current mining operations are conducted in two areas, the high grade La Paloma deposit and the Martinetas deposits, approximately 30km apart. Ore is processed through a 1,000 tpd CIL plant located near the Martinetas pit. The project currently supports 325 employees and contractors on a fly-in fly-out basis. Mineral Don Nicolás has strong regional and local community backing having signed agreements with the two neighboring communities.

Cerrado acquired the MDN Project property in March 2020 and undertook a fundamental review of the resource database and based upon a significant geological re-interpretation, engaged SRK to conduct an independent NI43-101 updated resource technical report. This was completed on August 31, 2020 and is highlighted in Table 1 above. Also, highlighted in maps above, are the numerous other target areas that can be expected to be quickly added to the mineral inventory with exploration work and is the focus of this new drilling program.

For further information please contact

Mark Brennan
CEO and Co Chairman
416-647-796-0023
www.cerradogold.com

About Cerrado Gold

Cerrado Gold is a private gold producer and exploration company with gold production derived from its 100% owned Minera Don Nicolas mine in Santa Cruz province, Argentina. It also owns 100% of the assets of Minera Mariana in Santa Cruz province, Argentina. The company is also undertaking exploration at its 100% owned Monte Do Carmo project located in Tocantins, Brazil. For more information about Cerrado Gold please visit our website at www.cerradogold.com.