Cerrado Gold's Strategic Move: Selling Michelle Properties for US$14 Million

Cerrado Gold Inc. (TSXV:CERT)(OTCQX:CRDOF)(FRA:BAI0) has announced a significant transaction, entering into an option agreement with AngloGold Ashanti's subsidiary, Cerro Vanguardia SA (CVSA), for the sale of its Michelle Properties in Argentina for a total consideration of US$14 million. The agreement includes an initial US$4 million payment and US$10 million upon exercise within 3 years. This strategic move strengthens Cerrado's balance sheet and allows the company to focus on its core properties, including the operating Minera Don Nicolas gold mine and the Mont Sorcier development project.

The Michelle Properties, comprising 14 exploration concessions totaling 14,000 hectares, are located approximately 100 km southeast of the MDN plant and 10 km northwest of CVSA's Cerro Vanguardia Mine. The transaction allows CVSA to take operational control of the properties during the option period, which can facilitate exploration and potential mining activities in the region.



Cerrado's CEO and Chairman, Mark Brennan, commented on the transaction: "The option of these non-core properties to CVSA, the logical owner of these properties, is highly accretive to Cerrado and its shareholders. The transaction will immediately improve the balance sheet and short-term capital position at MDN, allowing us to focus on our core properties. With current strong operating cashflows at MDN and capital proceeds from asset sales, we are very well positioned to pursue strong growth programs at MDN and at our Mont Sorcier high-grade iron project, as well as look at additional opportunities to grow the company in the near term."

The transaction also involves obtaining prior written consents from all holders of royalties and metal streams applicable to the Michelle Properties, including RG Royalties, LLC, Sandstorm Gold Ltd., and Sprott Private Resource Streaming and Royalty (B) Corp. This reduces risks and expedites closing if CVSA elects to exercise the option. Additionally, Royal Gold and Sandstorm agreed to waive all accrued interest and penalties on royalty amounts outstanding as of September 30, 2024, resulting in substantial reductions of company accounts payable.



The acquisition of the Michelle Properties by CVSA aligns with the company's long-term growth strategy and expansion plans. The strategic location of the properties allows CVSA to leverage existing infrastructure and operational synergies, reducing exploration and development costs. The large and prospective land package has the potential to add significant mineral resources to CVSA's portfolio, contributing to its long-term production and growth targets.

In conclusion, Cerrado Gold's sale of the Michelle Properties to CVSA for US$14 million is a strategic move that strengthens the company's balance sheet and allows it to focus on its core properties. The transaction also supports CVSA's long-term growth strategy by providing access to a large and prospective land package, leveraging existing infrastructure, and diversifying its exploration portfolio. As Cerrado continues to grow and explore new opportunities, investors should keep a close eye on the company's progress and potential future developments.