Tag: Cerrado Gold Inc.
Cerrado Gold reported drilling results from both the main Serra Alta deposit and surrounding satellite targets at its 100%-owned Monte do Carmo (MDC) project in Brazil. Cerrado currently has seven drill holes on site actively drilling, mostly focused on the infill, geotechnical and condemnation drilling to support a resource update and feasibility study (FS). Overall, the infill drilling results were generally in-line with expectations, and should help upgrade the resource at Serra Alta. The exploration results from other targets, including those testing the west of Serra Alta, are mixed. While they do demonstrate the presence of mineralization and expand the footprints of these targets, they have yet to show the consistent grade and continuity of Serra Alta. Furthermore, we are encouraged to see Cerrado begin exploration at Gogó da Onça, one of the stronger targets identified to date.
Cerrado Gold reported financial results for Q4/21, in addition to 2021 full-year results, at its 100%-owned Minera Don Nicolas (MDN) gold mine in Argentina. The company also previously reported quarterly gold production of 15,008 oz, which was 132% higher YoY (Q4/20) and 27% higher QoQ (Q3/21), and at an average head grade of 4.77 g/t Au, which was 34% higher than in Q3/21. Overall, Cerrado’s continued operational improvements at its MDN mine resulted in strong financials. We note that the ounces sold were less than produced, in part due to the timing of metal deliveries, but this should benefit Q2/22 revenue numbers.
Red Cloud presented a webinar on Cerrado Gold on Tuesday, March 22, 2022. Mark Brennan, Cerrado’s CEO, spoke about the company’s management team, projects, and plans for 2022. With funding in place for the Feasibility Study at Monte do Carmo (MDC) and ongoing production optimization at Minera Don Nicolas (MDN), Cerrado is well poised to grow into a mid-tier gold producer in the next few years.
Yesterday, Red Cloud hosted the second of its three-day 2022 Very Pre-PDAC Mining Showcase, which featured 32 presenting companies and a fireside chat with Ross Beaty, Chairman of Equinox Gold Corp. Over 1,750 participants have registered for the event. With this note, we want to provide a quick recap of the highlights from the conference for those who were unable to attend the live event (see our Day One recap here). If you would like to attend Day Three of Red Cloud’s 2022 Very Pre-PDAC Conference, register here. Replays are available on the Red Cloud website.
We are seeing precious metals rise in the shadow of the Ukraine invasion. Gold is trading around US$1923.80/oz, down a couple percent on short term profit taking since reaching a high of US$1,975/oz overnight. Kitco News notes that the next resistance levels could be between US$2,022/oz and US$2,089/oz. Some such as Frank Holmes of US Global Investors is suggesting that 20% volatility in gold is a non-event, and that gold could go to US$2,800/oz. Other commodities are also moving.
Cerrado provided several production and exploration updates from its 100%-owned Minera Don Nicolas (MDN) Au project in Argentina. The company plans to construct two heap leach units to process low-grade ores. As well, deep drilling will commence at the Sulfuro vein in the La Paloma pit, with an objective to explore the potential for underground mining. Additionally, 2021 drilling results have delineated several new targets that could further extend the mine life. Overall, we believe the plan to add a heap leach component to MDN is a positive development, as it could add production growth with limited up-front costs. Drilling on the project has continued to successfully add near-surface mineralization that could be incorporated into existing mine plans. Meanwhile, drilling deeper targets helps lay the framework for longer-term, underground production. Ultimately, we believe this will evolve to become a mixed open pit/underground operation, much like others in the Deseado Massif region.
Cerrado reported record production results from its Minera Don Nicolas Mine (MDN) in Argentina. Gold equivalent production increased by 46% QoQ and 94% on an annual YoY basis, primarily owing to improvements in ore head grades, strip ratio and mill throughput. We believe these results to be positive, as the company’s continuous operational improvement efforts at MDN have resulted in higher production numbers, well above previous quarters. Notably, this is despite the severe impact of Covid-19 in Argentina. In our view, better operating metrics along with higher annualized production rates could help re-rate the stock. We update our target to reflect this.