Cerrado Gold acquires Falcon Properties

Cerrado Gold has finalized an acquisition agreement for the Falcon Properties situated in Argentina's Santa Cruz Province. The transaction, involving a payment of $0.2 million to a subsidiary of Pan American Silver Corp, is significant due to its location adjacent to Cerrado Gold's existing Minera Don Nicolas (MDN) operations. This acquisition marks a strategic step in Cerrado's regional consolidation strategy, aimed at expanding its resource base around its Calandrias Production Hub.

The acquired properties encompass approximately 20,026 hectares and are slated for exploration activities designed to complement Cerrado Gold's current operations. Historical drilling results from the Falcon Properties indicate promising potential, with significant intercepts such as 30 metres grading 1.42 g/t gold equivalent (AuEq), 48 metres at 1.67 g/t AuEq, and 52 metres at 1.34 g/t AuEq. These results suggest the possibility of uncovering 150,000 to 200,000 ounces of gold, with projected grades ranging from 0.8 to 1.1 grams per tonne (g/t), although these figures remain conceptual pending further exploration.

Strategically, this acquisition is poised to enhance Cerrado's capacity to extend the life and escalate production levels of its existing operations. Mark Brennan, CEO and Chairman of Cerrado Gold, described the Falcon Properties as highly prospective, with mineralization that is conveniently located near current operations. The company plans to leverage its existing infrastructure to foster regional growth and consolidation, potentially increasing mineable material available to the Calandrias Hub.

Within the competitive mining sector, Cerrado Gold's move reflects broader industry trends of junior miners seeking to consolidate and optimize local operations for greater efficiency and productivity. The transaction includes an arrangement whereby a royalty of 2% of net smelter returns from the Falcon Properties is payable to the seller, highlighting a common practice in the sector to manage acquisition costs while reserving future potential upsides for both parties.

As for the forward course, Cerrado Gold will immediately embark on a 5,000-metre drilling program to delineate additional resources and test the exploration potential of the Falcon Properties. This exploration will occur over the next three months, aiming to transform current conceptual estimates into classified mineral resources, aligning with the company's broader strategic goals of sustaining and increasing production.