Q1 2025 Cerrado Gold Inc Earnings Call
Thank you for standing by this is the conference operator welcome to the theoretical 'twenty 25, Q1 financial and operational results Conference call. As a reminder, all participants are a listen only mode and the conference is being recorded.
After the presentation, there will be an opportunity to ask questions.
During the question queue. You May Press Star then one on your telephone keypad should you need assistance during the conference call you May signal, an operator by pressing Star then zero.
I would now like to turn the conference over to Mike Mcallister, Vice President of Investor Relations, but radical. Please go ahead.
Mike Mcallister: Thank you operator, and good morning, everyone.
Mike Mcallister: I'd like to note that this call may contain forward looking information that is based on the company's current expectations estimates and beliefs. Please review this slide and other forward looking information contained on page two of today's presentation as well as in the company's annual information form which is publicly available on SEDAR plus and the company's website.
Mike Mcallister: The accompanying presentation for today's call is available for download from the homepage of the company's website at Cerrado dwell dotcom. The accompanying press release is also posted on our website and on SEDAR plus. Please note that all dollar amounts mentioned on today's call are in U S dollars, unless otherwise noted and as mentioned.
Mike Mcallister: Following managements presentation and remarks, there will be a Q&A period.
Mike Mcallister: Joining me on today's call are Mark Brennan, CEO, and Chairman, Jason Brooks, Chief Financial Officer, David Borde, Vice President corporate development.
With that I'd like to now turn the call over to Mark Brennan our CEO.
Mike Mcallister: Thank you very much Mike and thank you very much ladies and gentlemen for joining us for Q1 conference call.
Mike Mcallister: Had a really good quarter.
Really starting to see some strong developments coming out of the second quarter and so really looking to two to provide some really good updates in terms of our initiatives that we're working on.
First I'd like to introduce Jason Brooks, our Chief Financial Officer.
Jason Brooks: Thanks Mark.
Speaker Change: Turning to slide three of the presentation.
Speaker Change: In the first quarter.
Speaker Change: Cerrado produced 11163 gold equivalent ounces or geo ounces as compared to 11204 ounces in Q1 of 2024.
And in the first quarter of 2025.
7228 of those Geo ounces were produced to date.
Speaker Change: Each operation, which was an increase of over 6000 ounces year over year.
Speaker Change: Whereas <unk>.
Speaker Change: Just shy of 3000 ounces produced other CLO CIL plant for the 11163 total.
Speaker Change: This move.
Speaker Change: Towards the heap Leach side. This was a record production in the first quarter.
Speaker Change: Of heap Leach heap Leach production.
Speaker Change: As we move our operations towards the heap Leach operation.
Speaker Change: In the first quarter of 2025, we had adjusted EBITDA of $4 $8 million as compared to an adjusted EBITDA loss of $1 1 million in the prior year.
Speaker Change: Which is closer to $6 million increase.
Speaker Change: The main reason driver of that increase year over years, as an $8 million increase in revenue.
Speaker Change: Much like many of the gold companies in the space we were.
Speaker Change: Lifted by the higher gold prices in the first quarter that we saw.
Speaker Change: As we realized $550 per ounce higher gold gold per ounce compared to the first quarter of last year.
Speaker Change: All in sustaining costs in the first quarter were 19 $132 per ounce as compared to 2045 in Q1 2024.
Speaker Change: Which was a 6% decrease.
Speaker Change: The all in sustaining cost was lower than first quarter, primarily due to the higher gold ounces that we sold in 2025 as compared to 2024.
Speaker Change: These higher ounces were slightly offset by 540000 higher costs, which is only 2% increase as a result of hiring equipment rental costs and associated labor costs.
Speaker Change: The company is <unk> still targeting cost reduction initiatives.
Speaker Change: 500, 1700, all in sustaining cost per ounce going forward.
Speaker Change: The balance sheet continued to improve during Q1.
Speaker Change: The cash balance remains strong.
Speaker Change: $20 million U S. While debt levels on payables continued to fall.
Speaker Change: During the quarter, we made the following reductions in our liabilities, we repaid $4 million decrease in our promissory notes in Argentina.
Speaker Change: $3 $4 million decrease in trade payables.
Speaker Change: $2 million decrease in short and long term payables as well as a $1 million decrease in future consideration payable, which was our payable to the sellers.
Speaker Change: And then on April 1st the company made our final payment to the MTA East MTN sellers, reducing an additional $5 million and $5 million excuse me in debt.
Speaker Change: The focus remains on ramping up the heap Leach production.
Speaker Change: The target production is 4000 to 4500 Geo ounces gold equivalent ounces per month.
Speaker Change: And we're planning on starting underground production in the third quarter.
Speaker Change: Once that production starts there is an underground exploration program that will follow.
Speaker Change: Open pit drilling program at MTN.
Speaker Change: Going to start on open pit drilling program of 2000, excuse me 20000 meters, which will hopefully produce a target of 300 to 700000 further ounces at them at the mine.
Speaker Change: And with that I'll turn it back over to Mark. Thank you Jason.
Speaker Change: So as a corporate hole, we continue to focus on our strengthening of our balance sheet.
Speaker Change: Expect to see a significant reduction.
Speaker Change: And our balance sheet to the end of the year.
Speaker Change: So, we're making very strong progress with that.
Speaker Change: And then on top of that we continue to see our production ramping up.
Speaker Change: As discussed we've increased our guidance from from $50 to 55000 ounces to $55 to 60000 ounces and we're very comfortable with those new numbers.
Speaker Change: Largely in part at M D and we've completed the crushing.
Speaker Change: New crushing circuit, which basically now takes us up to about 450000 ton.
Speaker Change: <unk> capacity per month.
Speaker Change: Which will give us a good redundancy in case any of the crushing systems go down.
Speaker Change: The main.
Speaker Change: The main circuit.
Speaker Change: Crushing has been a bit of a tough crack for us for the past year or so and we're now very confident that we'll be able to push to that 4000, and 4500 ounces per month that Jason was describing.
Speaker Change: On top of that we're looking at some high value add strong growth initiatives focused on first of all expanding our resource and life of mine at MTN.
Speaker Change: We've just we're just in the process now of starting a new 20000 meter drill program. This is focused on open pit.
Speaker Change: Poe open pit resources at.
Speaker Change: At Paloma East as.
Speaker Change: As well as looking at Columbia.
Speaker Change: Some other areas.
Speaker Change: So we expect to see.
Speaker Change: This program, culminating.
Speaker Change: And by the end of the year and as Jason mentioned were targeted at about 300 to 700000 ounces of inferred resources by the end of the year. So this should be a tremendous improvement to our life of mine.
Speaker Change: And improve our ability to expand our resources and production.
Speaker Change: We're also commencing our underground operation.
Speaker Change: We currently are we will be moving below the Paloma pit.
Speaker Change: It's been Dewatered, we've already.
Speaker Change: And are receiving initial equipment.
Speaker Change: Portal development has started.
Speaker Change: We anticipate that we will see.
Speaker Change: Ramp up of development and production beginning as early as June.
Speaker Change: So we'll be we'll be developing an ore initially and then looking to two to mine exclusively in the higher grade mine in the higher grade veins. So we're very excited for that for two reasons. One we will get some initial production, which will look forward to expand our production.
Speaker Change: And two it will enable us to go underground for exploration.
Speaker Change: Little exploration has been done at.
Speaker Change: At the underground at Paloma.
Speaker Change: And what we anticipate is a very strong program to look at again.
Speaker Change: Finding substantial high grade high value ounces.
Speaker Change: Below the.
Speaker Change: That where we are today.
Speaker Change: The current production target will be about five grams per tonne.
Speaker Change: Just over five grams per tonne, but when we were mining the bottom of the Paloma pet.
Speaker Change: So for obeying basically we were mining at anywhere between eight to 12 grams per tonne. So we're very hopeful that we'll be able to expand our resources with high grade ounces underground.
Speaker Change: On top of that we're looking at.
Speaker Change: With respect to Laguardia I've got in Portugal, we just coming to the end of our very successful metallurgical test program.
Speaker Change: So that's been a very strong success, we expect our.
Speaker Change: The environmental impact assessment approval imminently.
Speaker Change: Imminently.
Speaker Change: <unk> received initial notification that.
Speaker Change: That the approval process is coming to its conclusion, and so we'd be able to we expect to be able to announce that very shortly.
Speaker Change: That will follow up with the feasibility study.
Speaker Change: Sometime in the July August period with.
Speaker Change: With the publication of the feasibility report in August.
Speaker Change: Likewise, we will we will look to a construction permit through the rig copy process in Portugal.
Speaker Change: To receive a construction authorization in November.
Speaker Change: Or sometime in the late in the fourth quarter.
Speaker Change: And at that time, we expect to look at moving to a construction decision, which we anticipate the strong results that we expect from the feasibility to be a go.
Speaker Change: We will start construction basically we're targeting for the first quarter of 2026.
Speaker Change: Simultaneously, we are continuing to drive our feasibility study at <unk> sorry at <unk>.
Speaker Change: The most tertiary project and and Quebec again, this is a high purity high value iron ore project.
Speaker Change: Did we see tremendous economic benefits coming from so so from that perspective.
Speaker Change: By the end of the year, we expect to have the very very strong balance sheet and financial position. We expect to have concluded our development cycle for <unk> and we expect to see.
Speaker Change: That project is.
Speaker Change: Into the construction mode and fully funded.
Speaker Change: We are continuing at MTN with some very high value initiatives that I think will be transformation will in terms of valuation for the asset.
Speaker Change: And we continue to drive this very high value most.
Speaker Change: Most of our iron ore project in Quebec.
Speaker Change: With that.
Speaker Change: Thats the conclusion of our initial remarks.
Speaker Change: I guess in terms of if we can ask the operator to suggest if there are any questions available.
Speaker Change: Okay.
Speaker Change: To join the question queue you May Press Star then one on your telephone keypad.
John: John acknowledging your request.
Speaker Change: Yes.
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Speaker Change: Let me try a question. Please press Star then two.
Speaker Change: Once again, if you have a question. Please press Star then one.
Speaker Change: Our first question comes from Dave Koning.
Speaker Change: Sir Please go ahead.
Speaker Change: I'm, sorry about that I misunderstood the instructions please ignore.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: Since there are no questions Jessica.
Speaker Change: Oh.
Speaker Change: You have a question from Matt.
Speaker Change: With the backlog question.
Speaker Change: Please go ahead.
Speaker Change: Thank you.
Speaker Change: Shannon.
Speaker Change: Thank you.
Speaker Change: Yes.
Speaker Change: Good luck in the holiday of Lumpiness.
Speaker Change: Canada.
Speaker Change: Yes.
Speaker Change: Yes.
Speaker Change: Lastly, again being there.
Speaker Change: Maybe I'll ask project.
Speaker Change: From Europe.
Speaker Change: Yes.
Speaker Change: You will interest any thoughts.
Speaker Change: And then you all products yet.
Speaker Change: So is.
Speaker Change: Is that.
Speaker Change: You may begin.
Speaker Change: How do you add a product to them.
Speaker Change: Maybe.
Speaker Change: Okay.
Speaker Change: Yes, Rob Mountain.
Speaker Change: Matt.
Speaker Change: And secondly, my question.
Speaker Change: We're getting there.
Speaker Change: And what's the Delta.
Speaker Change: Yeah.
Speaker Change: Yes.
Speaker Change: Maybe I'll follow up.
Speaker Change: I see.
Speaker Change: For all other projects in parts about that.
Speaker Change: Adam.
Speaker Change: Thank you.
Speaker Change: They add on that.
Speaker Change: Italy.
Speaker Change: Portugal.
Speaker Change: Rich.
Speaker Change: Oh man.
Speaker Change: No.
Speaker Change: Do you have.
Speaker Change: I know.
Speaker Change: Project in Portugal.
Speaker Change: Four.
Speaker Change: The acquisition.
Speaker Change: Yeah.
Speaker Change: My question. Thank you.
Speaker Change: Thank you very much for your question I'll begin with MTN.
Speaker Change: Indeed, what we're anticipating and just to reiterate we were hoping from the open pit operations alone the exploration program on the open pit.
Speaker Change: Exploration really to add about 300 to 700000 ounces.
Speaker Change: View that as conservative really adding at least three to seven years in terms of range to our life of mine, which would give us a very healthy and substantive mine life. This does not include any potential exploration that we our success that we have at the underground at Paloma So from that regard.
Speaker Change: <unk>.
Speaker Change: We were hoping to see a very substantial increase in our resources by year end.
Speaker Change: Just to remind everybody, we're producing $55 to 60000 ounces per year currently.
Speaker Change: Our expectation our hope is that we can grow our mine life first and then second of all look to expand on that that production base.
Speaker Change: We have a 1200 ton per day.
Speaker Change: CIL plant that is largely an unutilized.
Speaker Change: An underutilized so from that perspective, we have the capacity to bruises a lot more that's the importance of having high grade material going through that plant. It goes it will really just add.
Speaker Change: Substantially to our bottom line and reduce our operational cost dramatically.
Speaker Change: So yes, we are also within the <unk> belt that as prolific in gold.
Speaker Change: In gold endowment.
Speaker Change: We have people around us Pan American are sitting.
Speaker Change: On a on a large resource and a mind probably a total of about two to 3 million ounces to date from Cerro Moro Cerro Vanguardia. His mind Anglos project to the South of US is mind about seven to 8 million ounces to date.
Speaker Change: Newmont.
Speaker Change: Cerro <expletive> project has about six to 7 million ounces in inventory. So we believe that we're very much at the beginning of the cycle for MTN and think there's a long future ahead of us.
Speaker Change: As it applies to your question with regard to permitting in Portugal in Laguna Saga.
Speaker Change: We feel very similar to MDM on this project first of all we will get have the strong support of the local and the federal government, where project of national interest or a pin project, which means that we have the strong support of the local communities local government as well as the federal government.
Speaker Change: And we expect to see our.
Speaker Change: Permit announced within within the coming days, if not weeks. So we're very optimistic about that.
Speaker Change: As you mentioned there are other projects.
Speaker Change: In the north it is a little bit more complex getting permitting.
Speaker Change: But in the South we have al just strehl less than an hour away, which is a fairly significant zinc operation.
Speaker Change: We also have the largest mine in Europe with nervous Corvo, which is now owned by Bulletin.
Speaker Change: About 45 minutes away as well so we're in a jurisdiction that welcomes mining that.
Speaker Change: The benefits of mining.
Speaker Change: And so our perspective is that we.
Speaker Change: Again were the new kids on the block just like we are in the designated myself with MTN.
Speaker Change: So we see lots of potential where we look at other assets in.
Speaker Change: In Portugal, probably not.
Speaker Change: Our perspective here is that <unk> is still very very young we've only done 40000 meters of exploration drilling.
Speaker Change: Demarcated 27 million tonnes of resource.
Speaker Change: It's a tremendous yields on drilling.
Speaker Change: But we think that theres multiples and multiples of.
Speaker Change: Resources to come from this project, our philosophy was to get a sufficient resource to go and drive production and then from there. What we would do is we would look at driving our our exploration.
Speaker Change: On the back of cash flow generated from production. So our expectation is again that will be.
Speaker Change: And construction in the first quarter were just completing a new initiative called undercover.
Speaker Change: As a significant seismic and Geo physics based program there'll be spending about 3 million euros on the project on evaluating deep targets.
Speaker Change: Both near mine and also at Greenfield areas of the Laguardia, So I've got a project.
Speaker Change: As quickly as the end of the summer we could see some very substantial targets coming our way and this is a very very sophisticated.
Speaker Change: Undercover.
Speaker Change: Geophysics program.
Speaker Change: <unk> utilized by the EU and have been sponsored and paid by the EU.
Speaker Change: We think we'll see some good growth potential and exploration targets from so long story short we see multiple.
Speaker Change: Expansion of our resources and don't really feel we need to be looking at new targets in Portugal.
Speaker Change: Okay. Thank you so much.
Speaker Change: And then.
Speaker Change: Kevin.
Speaker Change: This concludes the question and answer session I would like to turn the conference back over to Mike Garland for any closing remarks. Please go ahead.
Mike Garland: Thank you Ed.
Mike Garland: Thank you operator, and thank you everyone for joining us today.
Mike Garland: Just a reminder that the replay of this presentation will be available on our website in the coming days.
Mike Garland: And again the presentation is also available on our website underneath the investor presentation section.
Mike Garland: With that that concludes the call. Thank you operator, please terminate.
Speaker Change: Thanks, Doug.
Speaker Change: Conference call you may disconnect. Your lines. Thank you for participating and have a pleasant day.
Mike Garland: Okay.
Mike Garland: Okay.
Mike Garland: Yes.
Mike Garland: [music].