Cerrado Gold (CERT) Q4 2024 earnings summary

Executive summary

• Achieved annual gold equivalent production of 54,494 ounces, a 4% increase year-over-year, with stable operations and strong cash flow, and transitioned Minera Don Nicolás (MDN) to a heap leach operation targeting 4,000–5,000 ounces per month at all-in sustaining costs of $1,500–$1,700 per ounce.

• Completed sale of Monte Do Carmo project in Brazil for $60 million, including $45 million in cash and $15 million in receivables, resulting in a $24.9 million gain from discontinued operations.

• Entered into an agreement to acquire Ascendant Resources Inc., expanding into the Lagoa Salgada Project in Portugal, with feasibility study completion expected in Q3 and construction decision in Q4.

• Initiated aggressive exploration at MDN, aiming to add 300,000–800,000 ounces to resources, and began cost reduction initiatives in response to higher AISC.

• Granted an option to AngloGold Ashanti's subsidiary to purchase certain Argentine properties for up to $14 million, with $4 million received in 2024.

Financial highlights

• Revenue from metal sales increased 16% to $116.2 million in 2024, with annual gold-equivalent production of 54,494 ounces and Q4 production of 10,431 ounces.

• Adjusted EBITDA for 2024 was $24.4 million, a 38% increase from 2023; Q4 adjusted EBITDA was $4.5 million, up 88%.

• Net income for 2024 was $25.4 million, compared to a net loss of $6.8 million in 2023, driven by the Monte Do Carmo sale.

• All-in sustaining cost for 2024 was $1,651/oz, up from $1,427/oz in 2023, mainly due to inflationary labor costs in Argentina.

• Working capital improved by $54.5 million, with cash rising to $26 million at year-end, but a working capital deficit of $12.9 million remains.

• Net debt reduced by 52% over the past 12 months, and by 64% from peak levels in June 2024.

Outlook and guidance

• MDN expected to maintain 55,000 ounces/year production for 3–4 years, with potential upside from exploration and underground operations to begin generating revenue in Q3/Q4 2025.

• Lagoa Salgada feasibility study update expected by late Q2/early Q3, with NPV anticipated at $175–200 million and construction targeted for Q1 2026, production start in Q2 2027.

• Mont Sorcier iron project in Quebec progressing toward feasibility study by Q1 2026.

• Cash flow expected at ~$50 million/year and free cash flow at ~$25 million/year at $2,100/oz gold.

• Material uncertainties exist regarding going concern status due to current liabilities exceeding current assets and reliance on future financings or asset sales.