Cabral Gold (TSXV:CBR) - Meet The Team - Alan Carter

Key Concepts

• Cabral Gold: A junior resource company focused on gold exploration and development in the Tapajós region of Brazil.
• Kuyukuyu Project: Cabral Gold's flagship project in the Tapajós district, believed to have significant untapped gold potential.
• Tapajós Gold Rush: A historical period of intense gold prospecting in northern Brazil, particularly in the Tapajós region.
• Placer Gold: Gold found in alluvial deposits, typically in streams and rivers, often a precursor to hard rock gold discoveries.
• Hard Rock Gold: Gold found within solid rock formations, requiring more extensive mining and processing.
• Oxide Starter Project: A phased development approach focusing on near-surface, weathered material for initial cash flow.
• Stage 1 Development: The initial phase of the Kuyukuyu project, involving a 3,000-ton-per-day operation to heat-leach weathered material.
• Stage 2 Development: The subsequent phase focused on developing a larger hard rock mining operation.
• Dilutive Equity Financings: Raising capital by issuing new shares, which can reduce the ownership percentage of existing shareholders.
• All-in Sustaining Cost (AISC): A comprehensive measure of the total costs to produce an ounce of gold.
• Structural Geology: The study of the deformation of rocks and the resulting structures, crucial for understanding mineral deposit formation.
• Gold Geochemistry: The study of the chemical behavior of gold in geological environments, aiding in exploration.

Alan Carter's Background and Philosophy

Alan Carter, founder and CEO of Cabral Gold, brings extensive experience to the company. He holds a BSC in geology and a PhD in structural geology and gold geochemistry. His career includes 13 years with major mining companies like Riotinto, Bilitin, and BHP, with significant time spent living and working in South America, making him fluent in Spanish and Portuguese. His prior role as a business development manager for BHP involved identifying promising junior companies for acquisition. This experience led him to co-found Peragan Metals, which was successfully sold for nearly 500 million Canadian dollars in 2011.

Carter's personal philosophy for building a successful gold company in Brazil emphasizes:

• Long-term Commitment: Acknowledging that success requires sustained effort and dedication.
• Management Investment: Believing that management should have a significant personal stake in the company, as demonstrated by his own $2 million investment in Cabral Gold.
• Fundraising Capability: The ability to secure capital in both favorable and challenging market conditions.
• Attracting Top Talent: The critical importance of recruiting and retaining skilled professionals, exemplified by the addition of Venicius Dominguez, Head of Permitting and Regulatory Affairs for Vale, to Cabral's board.
• Understanding Brazil: Recognizing the necessity of understanding the local language (Portuguese) and culture to navigate the Brazilian mining landscape effectively.

The Tapajós District: A Unique Gold Province

The Tapajós district in northern Brazil is highlighted as a uniquely prospective region for gold. Carter describes the Kuyukuyu area within Tapajós as the largest placer gold camp during the Tapajós gold rush, which was the largest gold rush in Brazil's history and one of the largest globally.

• Historical Production: The Brazilian mining agency estimates that 2 million ounces of placer gold were extracted from streams at Kuyukuyu during the gold rush. This is ten times more than was recovered from the streams at the nearby Tokensson and Zenya deposit.
• Tokensson and Zenya Deposit: This deposit, located southeast of Kuyukuyu, is now Brazil's third-largest gold mine, producing 200,000 ounces annually. Crucially, for every ounce of placer gold recovered from its streams, there are an estimated 10 ounces in the underlying hard rock, which is currently being mined.
• Kuyukuyu Potential: If this 1:10 ratio holds true for Kuyukuyu, the project could potentially contain 20 million ounces of gold. Carter states that the sheer size of the gold anomaly at Kuyukuyu is among the largest he has encountered in his career.

Cabral Gold's Kuyukuyu Project: Discoveries and Potential

Cabral Gold's Kuyukuyu project is presented as having exceptional potential, with multiple discoveries and significant resource expansion possibilities.

• Multiple Discoveries: The project boasts not just one, but four new discoveries in addition to two existing gold deposits.
• Spectacular Drill Results: One of the new discoveries, Mashishi Northeast, has yielded impressive drill results, including 12 meters at 27.7 g/t gold and 11 meters at 33 g/t gold.
• High-Grade Boulders: Numerous boulder fields with very high gold grades have been identified at Kuyukuyu, with examples including average grades of 91 g/t and 75 g/t. The source of these boulders is yet to be determined.
• District Control: Cabral Gold owns the entirety of the Kuyukuyu district, a significant advantage that most junior mining companies would covet.

Development Strategy: Balancing Cash Flow and Long-Term Growth

Cabral Gold's strategy for advancing Kuyukuyu into production is a two-phase approach designed to balance near-term cash flow with long-term resource expansion and minimize shareholder dilution.

• Phase 1: Oxide Starter Project:
  • Objective: To generate significant after-tax cash flows through the mining and processing of near-surface, weathered material.
  • Operation: An initial 3,000-ton-per-day mining operation utilizing heat-leach processing for free-digging, weathered material.
  • Expected Cash Flow: Estimated at $50 to $60 million USD per year at current gold prices.
  • Purpose of Cash Flow: The bulk of this cash will be directed towards funding the larger Stage 2 development.
• Phase 2: Hard Rock Mining Operation:
  • Objective: To develop a substantial hard rock mining operation.
  • Requirement: Expansion of the current resource base through continued exploration drilling is necessary to make the construction decision for Stage 2.
  • Funding Mechanism: The cash flow generated from Stage 1 will more than fund the required drilling, thereby eliminating the need for future dilutive equity financings and enabling self-funding of growth.
• Continued Exploration During Construction: Unlike typical new mine builds, Cabral Gold intends to continue its exploration drilling program during the construction phase of Stage 1. This is to accelerate the growth of the hard rock resource, which is considered the "really big prize" at Kuyukuyu. The company plans to significantly expand its exploration program and the number of drills operating (currently three on site) once cash flow from the starter operation is achieved.

Community Engagement and Social Responsibility

Cabral Gold places a strong emphasis on building trust with communities, regulators, and stakeholders in northern Brazil. They have a long-term presence in the region and have cultivated strong relationships at all levels of government and within the communities where they operate.

• Improving Living Standards: The company is passionate about improving living standards in the community of Kuyukuyu.
• Local Employment and Procurement: They prioritize employing local people and purchasing goods and services from the local community.
• Community Initiatives:
  • Waste Management: Organized a rubbish collection service for the village.
  • Healthcare: Built a health clinic and fund a full-time nurse providing free medical care.
  • Education: Renovated the existing school and partially funded the construction of a new, advanced school with a computer lab.
  • Water Access: Funded the drilling of water boreholes, purchased tanks, and excavated new water pipes to ensure year-round running water for the community.
  • Internet Access: Brought high-speed internet to the community.

Opportunities and Risks

Carter identifies the following as key opportunities and risks for advancing Kuyukuyu into production:

• Opportunities:
  • Stage 1 Success: Successful execution of the Stage 1 starter operation is projected to yield 25,000 ounces of gold per year at an all-in sustaining cost of $1,210 per ounce.
  • Profitability: At current gold prices, this is expected to generate a profit of nearly $3,000 per ounce, or around $70 million USD per year.
  • Funding Growth: This profit will fund an aggressive exploration drill program for hard rock resource expansion, allow for operational expansion or acquisitions, and eliminate dilutive equity financings.
  • Community Value: The project will create lasting value for the community through stable jobs, training programs, and support for local suppliers.
  • Infrastructure and Environment: Commitment to improving local infrastructure and implementing environmental initiatives for long-term regional benefit.
• Risks:
  • Skilled Workforce: Maintaining a skilled workforce.
  • Seasonal Weather: Managing seasonal weather conditions.
  • Equipment Delivery: Ensuring the timely delivery of equipment.
  • Carter notes that these are all factors that can be planned for and actively managed.

Brazil as a Mining Destination

Carter views Brazil as an exceptional combination of opportunity and capability for the mining industry.

• Skilled Professionals: A deep pool of skilled professionals.
• Mining Culture: A well-established mining culture.
• Prospective Geology: Some of the most prospective and underexplored geology globally.
• Year-Round Drilling: The climate allows for year-round drilling.

These factors, combined with the potential for significant discoveries, make Brazil one of the most attractive places to invest in mining.

Conclusion

Cabral Gold, led by Alan Carter, is strategically positioned to capitalize on the significant gold potential of the Tapajós district in Brazil. The company's two-phase development strategy for the Kuyukuyu project aims to generate early cash flow from oxide material to self-fund aggressive exploration for a much larger hard rock resource, thereby minimizing shareholder dilution. Carter's extensive experience, personal investment, and commitment to community engagement, coupled with the unique geological prospectivity of the Tapajós region, present a compelling case for Cabral Gold's future success. The company's focus on building trust, attracting top talent, and understanding the local context are key pillars of its operational philosophy.