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Cerrado Gold's Q3 Production Surge: A Boon for Debt Reduction and Future Growth

AInvestWednesday, Oct 16, 2024 1:25 pm ET
1min read
Cerrado Gold Inc. (TSXV:CERT)(OTCQX:CRDOF) has announced a significant increase in gold production for the third quarter of 2024, marking a substantial improvement over the previous quarter. The Minera Don Nicolas Mine in Santa Cruz Province, Argentina (MDN), produced 16,255 Gold Equivalent Ounces (GEO) in Q2, which has now risen to 22,345 GEO in Q3. This impressive growth can be attributed to several factors that have contributed to a more sustainable production level.


The ramp-up of heap leach operations at Calandrias Norte played a crucial role in the Q3 production increase. The mine produced 421 GEO in April and ramped up to 943 GEO for June, despite harsh winter weather conditions. The addition of a mobile crushing unit at Calandrias Sur also impacted the production capacity, doubling overall crushing capacity to around 10,000 tpd and supporting an increase in production in the latter part of the year.

Harsh winter conditions in Q2 affected production levels in Q3, with June seeing a modest decline due to heavy snow and reduced mill throughput. However, this material is expected to be processed in the coming months, supporting production levels going forward. The performance of the Heap Leach during this period continues to improve, boding well for the ramp-up to full commercial production, which is expected to occur in Q3/2024 as the weather improves.

The improved working capital position and reduced corporate expenses also contributed to the Q3 production increase. Cerrado has reduced overall current liabilities by approximately US$10MM from the beginning of the year, with further declines expected in the coming quarters. This strengthening of the company's financial position, coupled with significant cost reductions, has helped to improve overall profitability for the future.


The Q3 production results have a significant impact on Cerrado Gold's financial outlook and debt reduction efforts. The increased production levels are expected to remain around the current level in Q4, allowing the company to execute on its plan to reduce debt levels and strengthen the balance sheet. This surge in production also sets the stage for the upcoming MDN 43-101 Preliminary Economic Assessment and Updated Mineral Resource Estimate, which are expected to be announced shortly. The positive production results will likely influence the timing and potential outcomes of these assessments, further bolstering the company's growth prospects.

In conclusion, Cerrado Gold's Q3 production surge is a testament to the company's operational improvements and cost reductions. With a more sustainable production level and a strengthened financial position, Cerrado Gold is well-positioned to continue its debt reduction efforts and capitalize on the growing demand for gold. As the company looks ahead to the MDN 43-101 Preliminary Economic Assessment and Updated Mineral Resource Estimate, investors can expect a positive outlook for Cerrado Gold's future growth and profitability.
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