Cabral Gold gets Full Mining License at Cuiú Cuiú, Continues Exploration through Construction Phase

Key Concepts

• Licença Prévia (LP): The primary environmental mining license in Brazil, representing the most critical regulatory milestone for mine development.
• Cuiú Cuiú Project: A gold development project located in the Tapajós region of Brazil, operated by Cabral Gold.
• Phase One (Oxide Heap Leach): The initial, smaller-scale mining operation targeting weathered surface material (up to 60m depth).
• Phase Two (Hard Rock Mining): The future, larger-scale operation targeting primary gold deposits located beneath the weathered cap.
• ADR Plant: Adsorption, Desorption, and Recovery plant, a critical component for gold processing.
• Magnetic Destruction: A geological indicator used to identify potential gold mineralization zones via magnetic surveys.

1. Regulatory Milestones and Permitting

The receipt of the Licença Prévia (LP) is the culmination of an eight-year process involving multiple government agencies and stakeholder consultations.

• Significance: The LP transitions the project from trial mining licenses (limited to 1,500 tons/day) to a full mining license with no production limit, allowing for a design capacity of 3,000 tons/day and future expansion.
• Process: The LP required a multi-year Environmental Impact Assessment (EIA) covering flora and fauna across both wet and dry seasons.
• Next Steps: The company will apply for the "License to Construct" and "License to Operate" in March, with expectations to receive them within a few months.

2. Phase One Development Status

The project is currently in the construction phase for the oxide heap leach operation.

• Progress: As of early March, the project is 54% complete, remaining on budget and on schedule.
• Risk Management: Despite building during the rainy season, the company successfully completed civil earthworks and equipment foundations. Risk was managed by maximizing operational hours during dry spells and utilizing a highly experienced construction team led by Luis Solaro.
• Critical Path: The primary focus is the delivery and installation of the ADR plant, currently being commissioned in Australia before being shipped to Brazil. Commercial production is targeted for Q4 of this year.

3. Phase Two Strategy

Phase Two represents a significantly larger financial and operational commitment.

• Objective: To mine the hard rock material located 60m below the surface.
• Timeline: The company is currently conducting aggressive drilling to update the resource estimate. A Preliminary Economic Assessment (PEA) is planned for Q2 of next year, followed by a Pre-Feasibility Study (PFS) and a Bankable Feasibility Study (BFS), with a construction decision targeted for 2028.
• Scale: While Phase One is a ~$40 million build, Phase Two is estimated to cost between $300–$500 million, targeting 150,000 to 250,000 ounces of gold production annually.

4. Exploration and Geological Findings

The company reported a significant high-grade discovery at the Jerimum Sema target.

• Key Result: A drill hole intercepted 9.5 meters at 87.4 g/t gold.
• Significance: This discovery is located 3 km from existing resources and has been traced over 900 meters of strike length.
• Methodology: The company utilizes drone-based magnetometry to identify "magnetic lows" (magnetic destruction), which correlate with gold mineralization. This high-resolution data is used to prioritize the 50+ targets within the district.

5. Financial Outlook and Market Risks

• Financial Position: The company holds approximately $40 million CAD in cash, sufficient to maintain both construction and exploration efforts.
• Economic Resilience: Even with potential cost increases due to fuel prices and global inflation, the project maintains a high margin. The company estimates production costs at $1,200–$1,500/oz, providing a strong buffer against current gold price fluctuations.
• Strategic Advantage: Because the project is an open-pit operation involving "mud" (weathered material) rather than hard rock crushing/grinding, mining and processing costs remain low.

Notable Quotes

• “The receipt of the LP is the most important step if you’re trying to permit a mine in Brazil.” — Alan Carter, on the regulatory significance of the license.
• “We’ve basically split our workforce in two. So, we’ve got a dedicated construction team and a dedicated exploration team.” — Alan Carter, explaining how the company maintains momentum during the transition to production.

Synthesis

Cabral Gold is successfully transitioning from an exploration-focused junior to a developer and soon-to-be producer. By utilizing a two-phase strategy—using the cash flow from the smaller, lower-cost Phase One oxide operation to fund the exploration and eventual development of the larger, high-grade Phase Two hard rock project—the company aims to minimize shareholder dilution while maximizing the value of the Cuiú Cuiú district. The project remains on track for Q4 production, supported by a robust cash position and significant recent exploration success.