Cabral Gold

CEO to discuss the next chapter. Thanks very much. Yep, I’m Alan Carter. I’m the CEO of Cabral Gold. We’re just in the process of commissioning our first mine in Brazil, in the Tapajós region of Brazil. The key points about Cabral are that we have a Phase 1 mine right now undergoing commissioning, that is part of a two-phase strategy. The second phase will be a much larger hard rock development, but Phase 1 is, we’re currently mining and heap leaching the oxide material.

We’re targeting 25,000 ounces a year next year in our first full year of production. We had our first gold pour about three weeks ago. We poured just over 1,100 ounces of gold, and we’re anticipating hitting commercial production sometime in November, so a couple of months’ time. As I said, there is a much larger Phase 2 operation coming along behind that, and we expect to complete a PEA next year, probably by about this time next year.

We have an underexplored district, really. This isn’t a project, it’s really a district. We have 1.2 million ounces, of which over half of that is indicated. That was last recalculated in 2022, four years ago, so we’ve done 50,000 meters of drilling since then. That resource was also based on three gold deposits. We’re now modeling six. So we’ve made a number of hard rock discoveries since then, and we’ve been getting some pretty good drill results. We’ve got six rigs running. We recently drilled 9.5 meters, 87 grams, but there are a number of other very, very interesting high-grade targets in the district that we control. We’re right next door to G Mining’s Tocantinzinho gold mine, which has been a huge success.

And I’m a pretty big shareholder. I’ve so far invested $2 million of my own money into this, and we’ve been credited with five grassroots gold discoveries in Brazil over the last 20, 25 years or so. So I founded this company with another guy about nine years ago. I’m ex-Rio Tinto and BHP. Brian Arkle used to work for Newmont. Brian’s our VP Technical Services. Luis Seelaru has just built the Phase 1 mine two months ahead of schedule here and on budget. Elton Pereira, very accomplished exploration geologist in Brazil, and Rory McKnight is an Australian that has been living in Brazil for 30 years and is our President Brazil. John Gilligan, who’s the CEO of Liberty Gold, he’s our chairman. Larry Lippard, fund manager, Larry’s here. Vinicius Dominguez is a senior guy at Vale. Ian Gendall is a geologist who runs DLP Resources.

We are about a 500 million market cap company. We’re currently trading at about a buck sixty. It says $55 million cash here, but that’s now about $70 million because we’ve just executed on our first gold sale. In the last 12 months, the stock has appreciated by 300%, approximately. So it’s done reasonably well. We’ve got some good institutional shareholders here. Our largest shareholder would be Alpana, Peru’s largest private mining company.

We’re in an area of Brazil called the Tapajós. The Tapajós is historically the world’s largest gold rush. There was a massive gold rush here that happened in the 1980s, and Cuiu Cuiu, which is in the middle of that trend that you can see there, was the largest placer field. So very, very prospective. Ninety-five percent of these placer fields, there’s no source been identified yet. It just hasn’t had the exploration work.

Moving in, as I said, we’re right next door to Tocantinzinho, which is the third-largest gold mine in Brazil. We’re on the same geological structure as I showed you earlier. That’s that line, the dotted line you can see there. A couple of things here. Historically, Tocantinzinho, the placer field at Tocantinzinho, produced an estimated 200,000 ounces. The placer field at Cuiu Cuiu produced 2 million ounces. So the placer field here wasn’t twice or three times the size, it was ten times the size. And also the gold-in-soil anomaly that we identified originally at Tocantinzinho was a kilometer across. The gold-in-soil anomaly at Cuiu Cuiu is currently seven kilometers across, and it’s still growing.

This is zooming in on our area. All these shaded areas are drainages where gold was recovered from gravels, placer gold, by the old-timers in the 1980s. What this shows are the gold deposits that we knew about four years ago in brown, Central, MG and JB. So that’s where the 1.2 million ounces currently is. The discoveries in yellow are discoveries we’ve made since 2022. So we’re modeling all of these right now. We’re updating the three original ones from 2022, and we’re putting maiden resources together on the other four.

And that table on the left there shows that we’ve been getting some pretty good results on the new discoveries in yellow. I mentioned the 9.5 meters, 87.4 grams that you can see there in Germân Sema, but also some very good results, notably Mexiki Northeast, which has been returning some very good high-grade results over good widths, 12 meters at 27 grams, 11 meters at 33 grams.

This is the Central gold deposit, so if I go back one, you can see the Central gold deposit there. It is on trend with another discovery called PDM. The length of that individual trend within this property is five kilometers. There’s a lot of upside within that trend. [clears throat] This is, again, a geophysical map showing the location of the Central gold deposit. The thick black lines there are the gold-in-soil anomaly. This part of the property is about five kilometers long, as I said. We’ve got some excellent targets here. You can see there the PDM discovery at the north. That is one of the four new discoveries we’re modeling now, and we’ll have a resource on that one, just like all the other ones, by the end of the year. But there is a five-kilometer-long trend here.

The Central Southeast target, which is 500 meters southeast of the Central gold deposit. We’ve drilled five holes down there, and you can see some of the results there. 27 meters at 6.9. So that is an area we’re gonna be following up in the next 12 months or so. And between Central and PDM, we’re currently drilling now. We’ve got the Mutum target, where the trenches are averaging 0.9 to 1 gram a ton. And also the Mutum West target. We’re also getting some interesting drill results. So there’s a big gap there between Central and PDM, and we think there’s a good chance that all that gap area is gonna be mineralized. But, as I said, we are drilling right now.

The MG gold deposit, second one we found. This one’s a similar size to Central. Currently about half a million ounces, but both of these gold deposits are growing. This one is about two kilometers long by about 60, 70 meters wide. There are a number of high-grade veins within the low-grade halo here. The low-grade halo in yellow and the high-grade veins in red. That box there is about 2.6 meters at 28.9 grams. And that vein we can trace within the low-grade halo for about 700 meters or so.

There’s another new discovery. One of those four new discoveries that we’ve made is immediately north of the MG gold deposit. You’re looking at it there. The dotted line here is the extent of the weathered envelope, if you like, or the weathered profile. That’s the material we’re actually currently mining at the MG gold deposit. But there is another one that we’ll start mining next month. It’s 500 meters to the north called Mashishi. And there is also this Mashishi West target there. I mentioned some of the drill results we’re getting, which is a couple of hundred meters further to the northeast there. So that needs more drilling. We are currently expanding the Mashishi deposit. And again, Mashishi is one of those new targets that we’ve discovered since 2022.

German Sima, this one’s about three kilometers east-northeast of Central. It’s the newest gold deposit that we’ve found so far. This is the one that’s bringing some really spectacular drill results, including that 9.5 meters at 87.4 grams. It’s a wide zone. It’s about 200 meters wide north-south, and so far we’ve traced it for about 600, 700 meters east-west, and it’s open to the east. Again, this will have a maiden resource on it as well within the next three months.

The regional potential here is excellent. We’ve got a number of regional targets. What we’ve just been looking at on the target pyramid here, the 1.2 million ounces at the top of the pyramid in blue. The new discoveries, some of which I’ve mentioned already, are that second bar down in green. And then in the middle of the pyramid here, you’ve got targets where we’ve got a few drill holes, recce drill holes. There’s about a dozen targets here, 10 or 12 targets. I mentioned Central Southeast, which has got five holes, 27 meters at 6.9. But there are others here. Mashishi Southwest, that’s got a couple of holes, including 3.4 meters at 36.9 grams. Morodouloua, 2.8 meters at 19.5 grams. I think there’s just two holes on Morodouloua. So a lot of follow-up drilling that needs to be done on those.

Underneath that, you’ve got that brown bar, second from the bottom of the pyramid, where we’ve got mineralization in outcrop. So we’re finding gold exposed on surface, notably the JN target there in the north, where we’ve got a trench that ran 5.3 meters at 24 grams. Mutum over by PDM. The trench is there, 32 meters at 1 gram. And you can see in the middle of the district there, Bazalha On, so 14.7 meters at 2.6. Again, all these things need drill testing and follow-up.

And then in gray, you’ve got boulder fields. So these are boulder fields, big blocks of quartz lying around on surface. We don’t know where these boulders are coming from. We’ve got about a dozen, 10 or 12 of those, some of which are on this map. Notably, the Alonso one, which is just to the right of the scale bar there. The boulder field there is about 300 meters across and is averaging 91.7 grams a ton. Average. Trakazha, which is over there in the central part of the slide on the right-hand side. That’s five kilometers from Alonso. The boulder field there, a similar sort of size, 300 or 400 meters across, and the boulders there are averaging 74.9 grams a ton. Obviously, on all these boulder fields, we don’t know where the gold is coming from.

So it is a true district, which is excellent. Lots of upside to the district, lots of exploration work here still to do. We’re ultimately targeting in the district 5 to 10 million ounces. As I said, we are growing that current resource. We will have a new resource update out at the end of this year. It will be a big jump on the previous estimate, but it does represent an excellent opportunity. It also represents a challenge. The question being, how do you actually effectively explore as a junior company a district this big? This is more a Newmont or Kinross sort of size target area or target district.

We have decided that rather than do a JV or rather than continually dilute, dilute, dilute, we will develop this district in two phases, and Phase 1 is to mine the satellite material. So all these gold deposits are weathered to a depth of about 60 meters. And that satellite material is what we’re mining now. So we’re gonna start relatively small at 3,000 tons a day. As I said, we just had our first gold pour on the 10th of September. Get into cash flow. First full year, we should be doing 25,000 ounces at about $1,200 all-in sustaining cost per ounce, and then go after the hard rock project, which will be a much larger project. And we are planning a PEA on that Phase 2 hard rock project. To give you guys an idea of size, that will probably be targeting 150,000 ounces a year. But we’ve got to do the PEA next year.

Oh, sorry. That’s the material on the left that we’re mining right now. That’s soil on the top, and then the paler material at the bottom is saprolite. And as I said, that extends about 60 meters below surface. It’s all free digging material. We don’t have to drill and blast here, and we don’t need to crush or grind this material to recover the gold. We are heap leaching this. We’re putting it through a sizer, and then we’re agglomerating with cement.

There are five of these blankets, what I call blankets, which are basically the tops of the primary ore deposits. Currently, we’ve got about 300,000 ounces in resources here, and about 130,000 ounces in reserves. Those numbers are all expected to go up within the next couple of months as we update the resource estimates. We’ve just started the one in the south there, south central area. That’s the area we’re mining right now, the MG blanket. Next year, we’ll start on MG, but mining will continue... Sorry, Mashishi. But next, mining will continue on both of these.

Typical cross-section. The orange blanket material at the top, that’s the weathered cap. It’s about 60 meters thick. And then the stronger orangey colors at depth there is the hard rock material, which would form the basis for Phase 2. So no big surprise, where the hard rock deposits come through and project into the weathered material, you get the highest grades. So that drill hole on the top of that ore body there within the saprolite material, that’s 60 meters at 3.5 grams. I think I mentioned we’ve got about 300,000 ounces of resources here in the oxide material only. There’s about 900,000 currently from four years ago in the hard rock, and that’s gonna be updated. But about 130,000 ounces in the reserve base.

The PFS economic analysis here, this is a six-and-a-half-year mine project, or was, 18 months ago. That mine life is gonna grow. 3,000 tons a day or a thousand tons per annum, or a million tons per annum, sorry, an average grade about 0.7. I think all these numbers are gonna go up here. We are currently expecting to expand this operation to two million tons a day or 6,000... Sorry, two million tons a year, 6,000 tons a day by this time next year. So these numbers are all gonna double.

Heap leach operation, on-off pads, pretty simple. We agglomerate this material. We put it on pads. Each one of these four pads has a 120-day cycle, 30 days to stack, 60 days to leach, and 30 days to wash and remove the spent material. Then it goes through a series of carbon columns, an electrowinning cell, ADR plant, and we’re producing doré right now. We’ve produced about 80, 90, 80 or 90 kilograms to date, and we’ve only been at it three weeks.

The base case, the PFS study that was released in July last year, was all premised on a base case gold price of $2,500 an ounce. And at that gold price, obviously the gold price is a lot higher than that now, we have an after-tax rate of return here of 78% and a payback of ten months. So those numbers are considerably better. You can see the upside case there that at the time was $3,500 gold, 151% post-tax payback, and a six-month term for paying that capital back.

This is it. These are some photos of the operation. That’s the dry circuit on the top left, the wet circuit on the right with the ADR plant and the carbon columns, and then the first pad there that’s being irrigated, and then some of the gold bars from the first pour.

Timeline, we’re past the first pour. We’re now in ramp-up. As I said, we are expecting to declare commercial production, which I should really add into this, in November of this year, so in a couple of months’ time. Short-term catalysts include commercial production in Phase 1 in November. We are gonna update that global resource estimate, as I mentioned, also by probably end of November, December time. And we are gonna put out news here in the next couple of months on our Phase 1 expansion plans and that doubling of production from one million to two million tons. We have six rigs turning, so we’ve got a lot of exploration drill results. That will almost certainly continue well through 2027. That will be a minimum six rigs. We may well go to seven or eight rigs for 2027.

So what’s the opportunity here? We’re commissioning, or almost complete the commissioning of stage one right now. Commercial production expected in November. As I said, it looks like a very profitable mine. The leaching is proceeding extremely well. We have an existing resource base here of about 1.2 million ounces, which is gonna get updated by the end of this year. We have a track record in Brazil. We’ve got a lot of our own money at stake, and we are next door to Brazil’s third-largest gold mine. We have a number of new discoveries since the resource was last updated in September of 2022. Six rigs turning. Some very good drill results have come out of this. The project is district scale. I hope I gave you some flavor of that with the slide with the triangle on it. But there are a lot of targets here that need to be tested, and we don’t need any additional capital. So there’s no more dilution going forward here. I think that’s it. I’ll leave it at that.

Great. Thank you. Any questions from the audience?

Could I ask you what your cash position would be and what you plan on doing? It sounds like you’ve got a lot of excellent targets there. Your potential exploration budget for next year?

The cash position right now is 70 million Canadian dollars or thereabouts in broad terms. Obviously, we’re pouring gold every week, and we’re making a significant amount of money versus our operating costs. So by the end of the year, I expect the cash position to go up to 80, 85 million Canadian dollars. The exploration budget for next year, we haven’t set it yet. We haven’t agreed the budgets, but I think it’ll be $20 to $25 million a year next year.

Great. And with that, if no further questions, wrap it up there. Thanks. Thank you.