Cabral Gold (CBR) - 5 Drill Rigs, Targeting High-grade Intercepts

Cabral Gold is a mineral exploration company focused on gold and copper. The company was founded in 2014 and is headquartered in Vancouver, Canada. Magellan Brazil is a subsidiary of the company. The company is listed on the Toronto Stock Exchange (TSX-V: CBR) and the OTC Markets (OTCQX: CBGZF). The company's key assets include the Cuiú Cuiú Project in Northern Brazil, the Tapajos Region, and the Bom Jardim project. 

We met with Alan Carter, CEO, Director, and Founder, Cabral Gold. Alan is the co-founder of Peregrine Metals Ltd. and Cupurum Resources Ltd. He also serves as a Director and Chairman at Fremont Gold Inc. and Altamira Gold Corp. His education credentials include a B.Sc. degree in Geology from the University of Southampton, UK. 

Company Overview

Cabral Gold is a publicly traded company focused on advancing its flagship, district-scale Cuiú Cuiú gold project in Brazil. The company is looking to grow its existing resource through trenching, sampling and drilling.

The company's advanced gold project in North Brazil features 2 gold deposits that are 43-101 compliant resources. These resources collectively output 1Moz. The company has identified 43 targets within an 8 km area of the 2 main deposits. They already have 3 drill rigs on-site and have recently signed a contract to add 2 additional drill rigs. These rigs will be carrying out the target exploration for the next 9-12 months. 

Capital Raised

The company witnessed a strong 2020 and 2021 in which they were able to raise $11.5M, the largest financing deal in the company's history. The company entered a bought deal backed by a syndicate of 4 brokers, offering a low-risk, guaranteed financing option. The majority of these funds are planned towards ramping up the company's drilling program. 

The company recently issued a half warrant set at $0.80 without a price cap, making it freely tradable. Cabral Gold expects this warrant is expected to bring an additional cash flow of $7M-$8M at a 2-year strike price. The company's drilling program is focused on the high-grade zones within the identified deposits. They plan to drill off the low-grade blankets sitting atop of one of their gold deposits. 

Cabral Gold currently has a $70M market cap with $12.5M in liquidity. They plan to allocate these funds towards high-grade targets at the Cuiú Cuiú site. The priority is towards drilling the identified high-grade zones at the MG and Central sites. The company is looking to allocate a drill rig for drilling each of these zones. 

The company's previous financing round brought in $4.2M. The company is optimistic that their research would get coverage from the brokers who made this bought deal possible, generating increased attention in the market. 

Drilling Targets

At the MG site, the company is currently drilling off a blanket of low-grade oxidization. This operation has an estimated timeline of 3 months. The company is looking to drill 70 holes at the MG site across a 500m by 400m blanket of low-grade material using an RC rig, with a planned section-wise blanket drilling. The company plans to utilize a diamond rig to revisit potential targets that were previously difficult to access due to the wet season.

The targeted area has a maximum thickness of 50m with significant oxide material at the top. The average thickness is estimated between 30m-40m with grades averaging in the 0.5g/t-1g/t range.  The company also found a 3.5g/t blanket zone at a depth of 60m atop the projected hard rock deposit. 

The company is looking to start with a small-scale production with a low CapEx (Capital Expenditure) as they believe that more value can be generated through discovery. The 43 targets identified by the company are promising as 10 holes have shown high intercepts, while another 12 targets feature high-grade veins. 

Cabral Gold is focused on tracing intercepts and eventually steps up to identify potential deposits from these targets. The company has planned a 9-12 month exploration program with extensive drilling and tests carried out on the high-grade targets. The company currently has the funding to meet its current exploration goals.

The Machichie target has also been drilled and is expected to function as the company's third deposit. The blanket on this target serves as a standalone deposit and the company is looking to aggressively explore the target areas through 5 drilling rigs.

The company is actively seeking continuity in these deposits and they have been able to discover a hole at the Morro da Lua deposit which cuts through 3 different veins. The company also put 6 additional drill holes at the site and discovered continuity in these veins. 

At the MG Deposit, strong continuity has been observed over a distance of 2 km, allowing the tracing of mineralization from one section to another. At the Central deposit, the Machichie zone, located 500m to the north, there's continuity which was traced up to 600m so far. The coming 9-12 months are dedicated to drilling and exploration while simultaneously testing the high-grade targets. These deposits have the potential for a district-scale operation in the future. 

Cabral Gold has targeted the low-grade blanket at the deposit's surface. The grade ranges between 0.5g/t - 1g/t, while higher-grade samples reach up to 3.5g/t at a depth of 60m. The focus on drilling this blanket is backed by the presence of mineralized unconsolidated material. Since the main deposit is located below this blanket, mining the surface offers a low-cost, minimal processing option that will add significant ounces to the company's overall supply. Additionally, this low-grade material does not require grinding, leading to further resource and cost optimization. 

Once the blanket has been drilled, it will enable the company to quickly enter production and add ounces to their supply. The company is already in possession of trial mining licenses allowing them to build a small plant and initiate mining within a span of a few months. This also doubles as an attractive prospect for the company's shareholders and investors. 

Region-specific Challenges

As Brazil looks to vaccinate the majority of its population and bring the rate of infection down, the ongoing exploration program is expected to see an upward trend. Since lockdowns and restrictions severely affect the movement of goods and services, the company has endured numerous challenges ever since the pandemic began. There has been a severe impact on the supply chain, especially when it comes to consumables. 

The mining industry is critical to Brazil's economy, and even though the government is focused on making things easier, the situation will take a few months to normalize. 

To find out more, go to the Cabral Gold Website