Cabral Gold - High-Grade Discoveries Enhance Near-Term Production Plan

• Recent high-grade drill results include 12 meters at 27.7 g/t gold and previous intercepts of 11 meters at 33 g/t gold at Machichie Northeast
• Cabral's two-stage development strategy focuses on near-term oxide production to fund district-scale exploration
• Updated PFS expected in May 2025 will incorporate Machichie Main deposit, potentially enhancing already robust economics
• Project offers low CapEx, quick 12-month build time, and AISC of approximately $1,000/oz against $3,000+ gold prices
• District-scale potential with over 50 gold targets across the property and proximity to G Mining's major gold operation

The Cuiú Cuiú Project

Cabral Gold (TSX-V: CBR) is advancing the district-scale Cuiú Cuiú gold project in northern Brazil, where President and CEO Alan Carter recently announced "spectacular drill results" that have significantly enhanced the project's potential. The company has identified multiple high-grade gold zones within its extensive property, creating excitement among investors looking for exposure to near-term gold production opportunities.

"We first jagged it with a hole middle of last year 2024 where we got 11 meters at 33 grams," explained Carter, "and this hole, together with that hole from last year, are two of the best holes we've ever drilled on the project. It really is a stunning, stunning drill result. 12 meters at 27.7 grams is not something that is an everyday occurrence for most companies."

The Cuiú Cuiú project features a strategic two-phase development approach. The initial phase targets relatively shallow, oxidized material amenable to heap leach processing, while the second phase envisions a more extensive operation to exploit the primary mineralization at depth. This approach allows Cabral to minimize initial capital expenditures while establishing cash flow to fund further exploration and development.

With a current global resource of approximately 1.3 million ounces and numerous untested targets, Cabral Gold appears well-positioned to capitalize on the current strong gold price environment. The company completed a Preliminary Feasibility Study (PFS) in October 2024, which demonstrated robust economics even at a conservative gold price of $2,250 per ounce – significantly below current market levels exceeding $3,000 per ounce.

Interview with President & CEO, Alan Carter

High-Grade Gold Discoveries & Geological Insights

The recent high-grade discoveries at Machichie Northeast represent a potential game-changer for Cabral Gold. This zone, located just 150 meters from the Machichie Main deposit and approximately 650 meters north of the MG gold deposit (planned as the initial mining area), could substantially enhance the project economics. Carter explained:

"This new discovery at Machichie Northeast is suggesting that there's a lot more material to the north of the Machichie main oxide deposit within the oxide material that we can get at."

The proximity of these zones to the planned mining area is particularly advantageous, with Carter noting that "because it's so close, trucking distance is half a kilometer or so, probably less than that."

From a geological perspective, the high-grade zones represent the surface expression of potentially extensive primary mineralization at depth. As Carter describes it, "this oxide material has all formed over millions of years from weathering of the primary material." The implications are significant: "That weathered material is a reflection of what's happening underneath in the underlying primary hard rock material, which have been weathering over millions of years."

The company has identified consistent high-grade mineralization along this structural corridor, with Carter highlighting multiple impressive intercepts:

"We've drilled 6 meters at 13 grams, 5 meters at 24 grams, and 11 meters at 33 grams on the same structure. So it's a real zone."

Geophysical data suggests the structure could extend for at least 600 meters, with all zones remaining open at depth.

This high-grade material presents both opportunities and challenges. While the exceptional grades would significantly enhance project economics, they may require a different processing approach than the heap leach method planned for the lower-grade oxide material. Carter acknowledges this, stating, "Obviously with this super high-grade material, we're unlikely to put that on a leach pad. We're probably going to have to develop a small little gravity plant on the side, and we're doing some met work on it now to tackle some of this very high-grade material."

Production Strategy & Economic Considerations

Cabral Gold's production strategy revolves around a pragmatic, two-stage approach designed to minimize initial capital requirements while establishing cash flow to fund further exploration and development. The stage one operation targeting oxide material represents a low-risk entry point with compelling economics.

"We want to get off this hamster wheel, which is continuing to dilute the capital structure by raising money and drilling and exploring and all the rest of it. We want to be in control of our own destiny. We want to have our own sources of revenue so instead of continuing to dilute the capital structure, we anticipate making money, and it looks like it's going to be a significant amount of money from this oxide material."

The project's economics appear robust, particularly in the current gold price environment. The PFS completed in October 2024 projected a 47% post-tax rate of return based on a gold price of $2,250 per ounce. With gold currently trading above $3,000 per ounce despite recent pullbacks, the potential returns could be substantially higher.

The operational costs are equally compelling, with Carter noting:

"The cost, all-in sustaining cost on a per ounce basis, is around about a thousand dollars an ounce, so there's a significant margin there."

This margin, potentially exceeding $2,000 per ounce at current gold prices, would generate substantial cash flow for a relatively modest initial investment.

The company is balancing its focus between advancing the near-term production opportunity and continuing to explore the district's broader potential. "We're going to continue to add the lower-grade ounces, the stuff that's in the range of about 0.7 to 1.5 to 2 gram material, which leaches very well," Carter stated. "And also we're going to continue to drill along strike at Machichie Northeast in particular, to determine how much of high-grade material we've got because it has the potential to add an awful lot of ounces very quickly to the global resource model."

This dual approach ensures that Cabral maintains momentum toward production while continuing to enhance the project's overall resource base and economic potential.

Metallurgical Approaches & PFS Updates

The discovery of high-grade mineralization at Machichie Northeast has prompted Cabral Gold to consider a modified processing approach. While the company remains committed to heap leaching for the bulk of the oxide material, the exceptionally high-grade zones may require different treatment.

Carter explained that the high-grade material is unlikely to be processed on the leach pad, but rather put through a gravity plant, developed on the side. This dual processing approach would optimize recovery rates while maintaining the low-cost advantage of heap leaching for the majority of the material.

The company is preparing an updated PFS expected in May 2025, which will incorporate the Machichie Main deposit. While the recently discovered Machichie Northeast zone won't be included in this update due to insufficient drilling density, Carter anticipates that the updated PFS will show significant improvements over the October 2024 version.

"I think it will be significantly different because as I said, we are targeting bringing this third zone in, the Machichie Main zone," Carter stated. The company has been conducting detailed work on various aspects of the project, with Carter explaining, "We've been looking at the capital costs, getting more granularity and more detail on the capital costs. We've been looking at the operating costs, and we've been certainly looking at the resources and the reserve base that we used in the PFS."

One significant aspect of the updated study will be the conversion of inferred resources to the indicated category, allowing their inclusion in the reserve base and mine plan. "We had back in October about 150,000 ounces in the oxide which was inferred, and we've been doing quite a lot of drilling. So a lot of that is likely to be upgraded to indicated ounces, and once you've got them into the indicated status, you can develop a mine plan around those and move them into the reserve category."

The construction timeline remains attractive, with Carter noting, "This thing should only take us about 12 months to build." The simplicity of the processing approach contributes to this rapid development timeline, as "there's no drilling and blasting, and there's no crushing and grinding."

Financing Strategies & Market Conditions

Cabral Gold is actively pursuing financing for its initial production phase, with Carter noting:

"A big part of my time and effort these days is obviously focused on securing the financing for this little starter operation."

The company aims to secure production financing by approximately July 2025, with concrete pouring potentially beginning in the third quarter.

The near-term production aspect of the project has generated significant interest from various financing sources.

"Investors definitely have a focus currently on those companies that are pursuing near-term production," Carter observed. He further elaborated that interest is coming from "all sorts of different parties, not just traditional groups that would offer you debt, but streaming royalty companies, end users, also strategic groups."

This financing approach aligns with the company's strategy to minimize dilution and maintain control over its capital structure. "Relying on the historic model of just diluting your capital structure when you have no control over your cost of capital or your share price, and stocks are not responding to good drill results, I think that's not a model that people should be pursuing, and we're certainly not going to continue pursuing that model," Carter emphasized.

The company appears largely insulated from potential US tariff impacts, with Carter noting, "We're sourcing all the steel, all the contractors are Brazil based. There's nothing that we anticipate purchasing, no major capital items from the US."

Future Outlook & Gold Price Predictions

Cabral Gold's management maintains a positive outlook on the gold market, despite recent volatility. "I continue to maintain that the outlook for the gold price is very positive," Carter stated. "You've seen it move up significantly in the last six months. It's taken a bit of a pullback along with just about every sector that I'm aware of. But I think the continued uncertainty, both from a political and economic standpoint, will feed into an appetite for gold moving forward."

This positive gold price environment enhances the already compelling economics of the Cuiú Cuiú project. With all-in sustaining costs around $1,000 per ounce against a gold price exceeding $3,000 per ounce, the potential margins are substantial.

Beyond the initial production phase, Cabral envisions a much larger operation targeting the primary mineralization.

"The reason that we're pursuing a two-stage development plan, stage one being the mining of this oxide material to generate cash, most of that cash is then going to go off in a very aggressive program of drilling as part of stage two, and that is to grow this global resource base significantly so that then we can scope out and do a PEA and a feasibility study on the much larger second step, which is mining all this hard rock primary material."

The district-scale potential of the Cuiú Cuiú project is particularly noteworthy, with Carter highlighting, "We've got over 50 targets at Cuiú Cuiú outside the known deposits where we've got gold in trenches, reconnaissance drill holes, boulder fields." Some of these boulder fields contain exceptionally high-grade material, with Carter noting, "We've got boulder fields here where we don't know the source of the boulders that are averaging sort of 75 grams, 90 grams a ton. Gold, not silver."

The company's proximity to G Mining's major gold project provides a compelling comparison. "Cuiú Cuiú has a much bigger footprint. If you're talking the size of the gold-in-soil anomaly, the historic production, it's sort of seven to ten times larger just on that basis," Carter explained. While he acknowledged that "that may not translate to it being ten times larger in terms of a primary resource ultimately," he suggested, "but it could be."

Investment Thesis for Cabral Gold

• Near-Term Production Potential: Low CapEx project with 12-month construction timeline and compelling economics at current gold prices
• Exceptional Recent Drill Results: High-grade discoveries potentially enhancing project economics beyond original projections
• Strategic Two-Phase Approach: Generate cash flow from oxide material to fund exploration of district-scale potential
• Strong Economics: 47% post-tax IRR at $2,250 gold, with significant upside at current $3,000+ gold prices
• Significant Exploration Upside: Over 50 targets across a district with a larger footprint than neighboring major gold operations
• Experienced Management: Team focused on shareholder value creation through strategic development approach
• Financing Progress: Active discussions with multiple potential funding partners, targeting financing completion by mid-2025

Cabral Gold presents a compelling investment opportunity at the intersection of high-grade gold discovery and near-term production potential. The company's strategic approach – generating cash flow from near-surface oxide material to fund exploration of its district-scale property – addresses the persistent financing challenges that have plagued junior gold companies.

Recent exceptional drill results, including 12 meters at 27.7 g/t gold, highlight the potential for significant resource growth beyond current estimates. With an updated PFS expected in May, financing discussions advancing, and a target to begin construction in the third quarter of 2024, the company appears positioned to deliver multiple catalysts in the coming months.

As CEO Alan Carter summarized:

"I think our shareholders should expect quite a lot of news here over the next few months. As I said, there are some major catalysts coming like updating that PFS, but with a discovery like we've got at Machichie Northeast, it's very exciting, and so there'll be a lot more drill results in the short term."

Macro Thematic Analysis: Gold's Resilience in an Uncertain Global Landscape

The investment case for Cabral Gold is strengthened considerably by the current macro environment for precious metals. Gold has demonstrated remarkable resilience and strength, recently breaking through the $3,000 per ounce barrier – a psychological and technical level that few analysts predicted would be reached so quickly.

This robust price performance comes against a backdrop of multiple supportive factors. Central bank purchasing has remained strong, with sovereign institutions continuing to diversify reserves away from fiat currencies. Geopolitical tensions across multiple regions have enhanced gold's traditional safe-haven appeal. Meanwhile, persistent inflation concerns, despite central bank rate hikes, have maintained investor interest in hard assets with inflation-hedging characteristics.

The gold market's strength is particularly notable given the challenging environment for many other asset classes. Recent volatility triggered by US tariff announcements has impacted equity markets broadly, yet gold has maintained much of its gains. This relative stability enhances gold's attractiveness in portfolio construction, potentially driving additional investment demand.

For companies like Cabral Gold, this price environment transforms project economics dramatically. Projects that were marginal at $1,800 gold become highly profitable at $3,000 gold, with operating margins expanding substantially. This dynamic particularly benefits companies with near-term production potential, as they can capitalize on current prices rather than hoping favorable conditions persist through extended development timelines.

The junior gold sector has historically suffered from capital constraints and dilutive financing. However, in the current environment, companies with clearly defined paths to production are attracting renewed interest from diverse funding sources. Strategic investors, streaming companies, and even end users are evaluating opportunities in the sector, potentially allowing companies like Cabral to secure more advantageous financing terms than has been possible in recent years.

While no commodity price can rise indefinitely, structural factors supporting gold appear firmly in place. Central bank diversification strategies represent multi-year programs rather than opportunistic purchases. Geopolitical fragmentation and economic uncertainty show few signs of resolution. Against this backdrop, gold producers – particularly those with low-cost, near-term production potential – represent one of the most compelling investment opportunities in the natural resources sector.