Canadian miner Cerrado Gold (TSXV:CERT) has signed a $20 million revenue financing agreement with Sprott Resource Streaming Royalty, which the company intends to use to fund ongoing work and conduct a reliability for the Monte do Carmo gold property in Brazil.
The Monte do Carmo project, located east of Monte do Carmo, comprises 14 exploration permits covering a total area of 67,785 hectares. The project is expected to produce 149,000 ounces per year during the first five years of operation.
Cerrado Gold CEO and Co-Chairman Mark Brennan said in a press release, “We are very pleased to once again partner with Sprott to fully fund our feasibility study and development work at Monte do Carmo. The facility is non-dilutive and attractive financing that provides full flexibility to add additional project financing for construction from 2023 onwards.”
Under the agreement, Cerrado Gold will sell 2.25% of all gold and silver produced at the Sprott Resource property with the option to buy back 50% of the agreed letter of credit. This is based on a buyback program.
Sprott Resource has issued a $20 million secured promissory note to Cerrado Gold with an interest rate of 10% per annum maturing on March 14, 2031 or upon completion of commercial production from the project, among others conditions.
Mike Harrison, Managing Partner of Sprott, said, “Monte Do Carmo’s PEA Technical Report results demonstrate a high-return, low-cost Tier 1 gold project with excellent exploration potential in a good jurisdiction.
“This funding provides catalytic capital to move the project toward a build decision, and also provides the opportunity for Sprott to provide construction funding as the company moves the project forward.”
Cerrado’s South American Project Pipeline
Cerrado Gold is a Toronto-based precious metals mining exploration and growth company with assets in South America. The Company’s 100%-owned Minera Don Nicolas project, located in Santa Cruz, Argentina, is a new producing gold and silver mine with significant potential for optimization, expansion and exploration . The Company is also focused on exploring its 100% owned Monte do Carmo gold project in Tocantins State, Brazil, expanding the high-grade mineral resource base through further exploration in 2022.