Cabral Gold - Major Gold District Next Door to Brazil's 3rd Largest Mine

• Cabral Gold has an advanced gold project in northern Brazil called Cuiu Cuiu, adjacent to G-Mining's Tocantinzinho project, which is set to become Brazil's third-largest gold mine.
• The company has current indicated and inferred resources of almost 1.2 million ounces and has recently reported high-grade drilling results, including 11 meters at 33g/t gold.
• Cabral is focusing on developing oxide blankets for near-term production using heap leach processing, with a Preliminary Feasibility Study (PFS) nearing completion.
• The company views Cuiu Cuiu as a district-scale play with 45 targets showing gold mineralization outside existing deposits, suggesting significant exploration upside.
• Cabral's strategy is to start small-scale production from oxide material to generate cash flow, which will then fund exploration of the underlying primary gold potential.

About Cabral Gold

uCabral Gold (TSX-V: CBR) is a junior resource company focused on the exploration and development of gold properties in Brazil. The company's primary asset is the Cuiú Cuiú gold district, located in the Tapajós Region of Pará state in northern Brazil. Cabral Gold holds a 100% interest in this promising project, which has already yielded two main gold deposits. According to a National Instrument 43-101 compliant technical report dated October 12, 2022, the Cuiú Cuiú project contains Indicated resources of 21.6 million tonnes grading 0.87 g/t gold (604,000 ounces) and Inferred resources of 19.8 million tonnes grading 0.84 g/t gold (534,500 ounces).

The Cuiú Cuiú project is situated within the Tapajós Gold Province, an area renowned for hosting Brazil's largest gold rush in recent history. The National Mining Agency of Brazil (ANM) estimates that between 1978 and 1995, the region produced between 30 to 50 million ounces of placer gold. Notably, the Cuiú Cuiú area itself was the largest zone of placer workings in the Tapajós, with historical placer gold production estimated at 2 million ounces. This rich history of gold production underscores the significant potential of Cabral Gold's flagship project and the company's strategic position in this prolific gold-bearing region.

Interview with President & CEO, Alan Carter

Project Location & Historical Significance

The Cuiu Cuiu project is situated in the Tapajós region of northern Brazil, an area with a rich history of gold production. Notably, the project is located immediately adjacent to G-Mining's Tocantinzinho project, which is on track to become Brazil's third-largest gold mine. This proximity to a major development project underscores the geological potential of the area and provides Cabral with potential infrastructure advantages.

Alan Carter, President and CEO of Cabral Gold, highlights the historical significance of the project area:

"Historically, Cuiu Cuiu produced 10 times more placer gold during the Tapajós Gold Rush of the 1980s compared to the Tocantinzinho area. This is not my estimate, but the estimate of the ANM, the Mining Agency of Brazil."

This historical production serves as a strong indicator of the area's potential for hosting significant gold deposits. The fact that informal mining activities in the 1980s yielded such substantial amounts of gold suggests that the bedrock source of this mineralization could be substantial.

Current Resources & Recent Discoveries

Cabral Gold has already established a solid foundation of gold resources at Cuiu Cuiu. The company reports current indicated and inferred resources totaling almost 1.2 million ounces, primarily split between two main deposits: MG and Central.

However, recent exploration activities have yielded exciting results that suggest the potential for significant resource growth. Alan Carter notes:

"We've been getting some very, very high-grade drilling results in recent weeks and months immediately adjacent to our existing gold deposits."

One standout result was an intercept of 11 meters grading 33 g/t gold at the Machichi Northeast target, located just 150 meters north of the recently discovered Machichi Main zone. This high-grade intercept, described by Carter as "the best drill hole we've ever drilled at Cuiu Cuiu," demonstrates the potential for new discoveries beyond the known resource areas.

District-Scale Potential

A key aspect of the Cabral Gold story is the district-scale nature of the Cuiu Cuiu project. Unlike many junior gold companies focused on a single deposit, Cabral has identified numerous targets across its large land package.

"Cuiu Cuiu is a district-scale play, which makes it a little bit different. We've got 45 targets with gold outside our existing known gold deposits...I think we're onto something pretty special."

This multitude of targets provides Cabral with numerous opportunities for new discoveries and resource growth. The company has reported high-grade gold in surface samples, trenches, and initial drill holes across several of these targets, suggesting that the known resources may represent only a fraction of the project's ultimate potential.

Near-Term Production Strategy

While Cuiu Cuiu's long-term potential is substantial, Cabral has developed a strategy to generate near-term cash flow from the project. The company is focusing on the development of oxide gold mineralization, which occurs as a blanket overlying the primary gold deposits.

Carter outlines the rationale for this approach:

"Because it's a district-scale play and because the district is going to require a lot more drilling and has enormous potential, we believe the best way forward for us is to get off the hamster wheel of continually raising money and diluting the capital structure."

The oxide material, described as saprolite mud, extends to depths of up to 60 meters and presents several advantages for near-term production:

1. No drilling or blasting required for mining
2. No crushing or grinding needed in the processing plant
3. Amenable to simple heap leach processing

Preliminary metallurgical test work has yielded encouraging results, with initial tests indicating 82% gold recovery after 60 days of leaching. Additional column leach tests are underway, with results expected in the near term.

Preliminary Feasibility Study & Development Plans

Cabral is nearing completion of a Preliminary Feasibility Study (PFS) focused on the economic viability of mining and processing the oxide gold mineralization. While the exact timeline for the PFS completion has been slightly extended due to the incorporation of new drill results, Carter indicates that it is "very, very soon."

The PFS will provide crucial information on the potential economics of a starter operation at Cuiu Cuiu. While specific details are not yet available, Carter suggests that the capital requirements for such an operation would likely be in the "low tens of millions" of dollars, significantly less than what would be required for a large-scale, hard-rock mining operation.

Operating costs are also expected to be favorable, given the soft nature of the oxide material and the relatively simple processing requirements. Carter notes, "Heat leach processing and recovery of gold is a very, very cheap method."

Exploration Upside

While the near-term focus is on advancing the oxide project towards production, Cabral continues to explore the broader potential of the Cuiu Cuiu district. Recent drilling has not only expanded the known oxide mineralization but has also provided valuable information about the underlying primary gold potential.

Carter emphasizes the significance of these results:

"There's not gold in the oxide material unless there's gold underneath that's been weathering over millions and millions of years. I think it's important that people understand that this is a district-scale play."

The company has reported numerous high-grade surface samples and drill intercepts from targets outside the main resource areas. These results, including quartz boulders averaging up to 90 g/t gold and trench samples grading 25 g/t gold over 6 meters, highlight the potential for additional discoveries across the property.

Management & Technical Expertise

Cabral has been strengthening its management team to support the transition from exploration to potential production. Recent hires include Brian Arkell as VP of Exploration and Technical Services, bringing 23 years of experience with Newmont and additional production experience from Argonaut Gold. The company has also appointed Samantha Shorter as CFO, adding both production and Brazil-specific experience to the financial team.

Alan Carter, the company's President and CEO, brings a wealth of experience to the project. His involvement in the discovery of the neighboring Tocantinzinho deposit provides him with valuable insight into the geological potential of the region.

Carter's commitment to the project is evident in his personal investment:

"I put almost two million Canadian dollars cash into Cabral, which for me is an enormous amount of money. So, you know, I'm all in on this."

Valuation & Market Opportunity

With 1.2 million ounces of gold resources already defined and trading at approximately US$40 per ounce in the ground, Cabral appears to be valued conservatively relative to its peers. This valuation does not account for the potential of the numerous exploration targets or the near-term production potential from the oxide material.

As the company advances the PFS and continues to report exploration results, there may be catalysts for market revaluation. Carter notes:

"I'm very heartened to see that the market is starting to respond to good drill results. I mean, once we announced that intercept of 11 meters at 33 grams, the stock responded, and it stayed up."

Risks & Challenges

As with any junior mining company, Cabral Gold faces certain risks and challenges:

1. Execution risk in transitioning from exploration to production
2. Potential for delays or cost overruns in project development
3. Fluctuations in gold prices affecting project economics
4. Geopolitical and regulatory risks associated with operating in Brazil

Investors should carefully consider these factors alongside the potential rewards when evaluating an investment in Cabral Gold.

The Investment Thesis for Cabral Gold:

• District-scale potential: 45 gold targets outside existing deposits suggest significant resource growth potential.
• Near-term production opportunity: Focus on oxide mineralization could generate cash flow to fund further exploration.
• Low-cost production profile: Soft oxide material amenable to simple, low-cost mining and processing methods.
• Strong management team: Recent hires bring valuable production experience to complement exploration expertise.
• Attractive valuation: Current market cap implies ~US$40/oz for existing resources, not accounting for exploration upside.
• Proximity to infrastructure: Location adjacent to soon-to-be producing mine may provide logistical advantages.
• Multiple catalysts ahead: PFS completion, ongoing drill results, and potential production decision could drive revaluation.
• Actionable advice: Consider establishing a position ahead of PFS results and monitor exploration updates for evidence of resource growth.

Cabral Gold's Cuiu Cuiu project in Brazil offers investors exposure to a potentially significant gold district with both near-term production potential and long-term exploration upside. The company's strategy of starting small with oxide mineralization to generate cash flow for further exploration is designed to minimize dilution and maximize long-term value creation. With multiple catalysts on the horizon, including the completion of a PFS and ongoing exploration results, Cabral presents an opportunity for investors to participate in the development of a new gold mining district in Brazil. However, as with any junior mining investment, careful consideration of the risks and potential rewards is essential.

Macro Thematic Analysis

The global gold market continues to demonstrate resilience in the face of economic uncertainties and inflationary pressures. As central banks maintain accommodative monetary policies and governments implement large-scale fiscal stimulus measures, the fundamental case for gold as a store of value and hedge against currency debasement remains strong.

In this context, the gold mining sector plays a crucial role in meeting global demand for the precious metal. However, the industry faces significant challenges, including declining grades at existing mines, increasing costs of production, and a dearth of new major discoveries. These factors have led to a growing interest in projects with district-scale potential, capable of hosting multiple deposits and providing long-term production visibility.

Brazil, with its rich geological endowment and established mining industry, is well-positioned to benefit from this trend. The country's Tapajós region, where Cabral Gold's Cuiu Cuiu project is located, has a long history of gold production and is now seeing renewed interest from both major mining companies and junior explorers.

The development of new gold projects in emerging districts like Tapajós can provide significant economic benefits to local communities while helping to meet global demand for gold. For investors, companies operating in these areas offer exposure to the potential for multiple discoveries and long-life mining operations.

"I've looked at hundreds and hundreds of gold projects around the world. I've worked for a number of big companies in my career, Rio Tinto and BHP, and I've never seen a project like Cuiu Cuiu."