Cabral Gold: PFS by July 2024, Near-Term Production and Now High-Grade Gold

• Cabral Gold has a 1.2 million ounce gold resource at its Cuiú Cuiú project in Brazil with significant potential to grow
• Recent drilling returned high-grade intercepts including 11m @ 33 g/t gold, opening up new targets
• The company plans to initially mine and heap leach near-surface oxidized ore to generate cashflow while continuing to explore and expand the resource
• A prefeasibility study on the oxide project is expected in July 2024, with a construction decision targeted for Q3 2024
• Cabral aims to build a modest heap leach operation by late 2025, then scale up as it proves out the wider district potential

Cabral Gold (TSXV:CBR) offers investors exposure to a rapidly advancing gold project in Brazil with near-term production potential and significant exploration upside. The company's flagship Cuiú Cuiú project hosts 1.2 million ounces of gold across several deposits, with recent drilling pointing to strong potential for further resource growth.

High-Grade Drilling Results Open Up New Targets

Cabral reported exciting new drill results from Cuiú Cuiú on May 30, including:

• 11m @ 33.0 g/t gold
• 25m @ 2.9 g/t gold
• 21m @ 1.3 g/t gold

CEO Alan Carter noted that the headline 11m intercept was the second-best hole ever drilled on the property.

"It's a very high grade over a very good width, and we think it's a new zone," he explained. "It's open to the east and west and down dip, so it's an exciting time for us."

The high-grade results came from the Machichie Northeast target, representing just one of the dozens of peripheral targets Cabral has identified across the wider district. Carter sees strong potential to expand the global resource as Cabral systematically tests these targets.

Interview with President & CEO Alan Carter

Near-Term Cashflow Potential from Oxide Project

While exploration drilling continues, Cabral is advancing studies on a nearer-term opportunity to mine and heap leach the oxidized, near-surface portion of the Cuiú Cuiú resource. Column leach tests have demonstrated that this saprolite material is amenable to heap leaching, enabling Cabral to initially focus on a modest, low-cost operation that can be scaled up over time. A pre-feasibility study on the oxide project is scheduled for completion in July 2024. Pending a positive outcome and financing, Cabral is targeting a construction decision in the third quarter of 2023. Initial production could commence 9-12 months thereafter.

"The idea is to get into cash flow, start making money, and then use that money to fund the wider exploration of the larger district," Carter explained. "This is a very, very big district, and there's a lot of different targets here."

Low-Cost Exploration and Development Strategy

Cabral has taken several steps to minimize dilution and maximize the impact of its exploration spending. The company owns and operates its own reverse circulation (RC) drill rig, enabling it to drill for an all-in cost of just C$75 per meter – a fraction of what many peers pay. Cabral has also been judicious in its financings, raising just over C$2.2 million in April 2024 despite having orders for significantly more. "It was all about trying to mitigate the effect of dilution to the capital structure," Carter noted.

On the development side, Cabral sees potential for a low-cost heap leach operation owing to the weathered nature of the oxidized material. With no need for drilling, blasting or crushing, and a very low strip ratio, capital and operating costs are expected to be low. Cabral is in discussions with contract miners as costs for the pre-feasibility study are finalized.

Benefitting from G Mining's Neighboring Development

Cabral benefits from its close proximity to G Mining's Tocantinzinho (TZ) project, which is currently under construction and scheduled to become Brazil's third-largest gold mine. In addition to providing valuable infrastructure, including roads and power, TZ serves as a template for permitting and development that should help derisk and fast-track Cuiú Cuiú.

"Having TZ (which Carter helped discover) building this massive mine immediately next door to us really helps us from a permitting perspective because it's the largest non-government investment in eastern Pará state ever," Carter said. "Many positive things are happening in our part of the world."

The Path to Production and Resource Growth

Looking ahead, Cabral is focused on delivering the oxide project pre-feasibility study in July and making a construction decision in the third quarter of 2024. Pending financing and permitting, the company aims to be in production in the second half of 2025, initially at a rate of approximately 1,000 tonnes per day.

Exploration remains a key priority, with Cabral planning to deploy the cash flow from its oxide operation to drill the many untested targets across the district aggressively. The company aims to complete a resource update in the next 12 months, incorporating the latest high-grade results from Machichie and Machichie Northeast. In the long term, it sees potential for a much larger development as it proves the district's scale.

"Within the next two or three years, we could be doing a scoping study, a pre-feasibility study and ultimately a feasibility study on a much larger global resource," Carter concluded. "I think that resource will be much larger than it currently is."

Cabral Gold offers a unique combination of near-term production potential, significant exploration upside and a low-cost pathway to creating value. With 1.2Moz already and a resource update expected within 12 months, the company is well positioned to continue growing its resource base by exploring the wider district.

At the same time, Cabral is rapidly advancing a low-cost oxide heap leach project to production, with key catalysts including the completion of a PFS in July 2024, a construction decision in Q3 2024, and potential first production in H2 2025. The oxide project should provide valuable cash flow to fund ongoing exploration and resource growth, with Cabral aiming to demonstrate the potential for a much larger development within 2-3 years. The company's experienced management team, low-cost operating strategy, and key infrastructure, thanks to G Mining's nearby TZ project, are all key advantages that should help minimize risk and maximize the odds of success.

The Investment Thesis for Cabral Gold

• 1.2Moz resource with potential for significant near-term growth through exploration
• High-grade drilling intercepts demonstrate potential for new discoveries across the wider district
• Fast-track to production and cash flow via low-cost oxide heap leach project
• PFS expected in July 2024, construction decision targeted for Q3 2024
• Initial modest production targeted for H2 2025, with plans to scale up as resource grows
• Company owns drill rig enabling low-cost exploration ($75/m all-in drilling cost)
• Benefits from nearby construction of Brazil's 3rd largest gold mine (G Mining's TZ project)
• Well-funded to deliver oxide project PFS and continue exploration
• Experienced management team with significant ownership (~30%)

Macro Thematic Analysis

The current macro environment appears highly supportive of gold, with central bank demand recently hitting a record high and ongoing concerns about inflation and financial system risks. This backdrop bodes well for gold prices and equities, particularly those with strong fundamentals and value-creation potential. Brazil is an especially attractive gold exploration and development jurisdiction, ranking 12th globally in gold production and hosting several large, high-quality deposits. The country's favorable geology, mining-friendly policies and well-developed infrastructure are key advantages.

As CEO Alan Carter explained:

"This is a very, very big district. There are a lot of different targets here. Last count, we had 45 peripheral targets where we know there's gold. Obviously, I'm not suggesting that all of those will be deposits, but I'm very confident a number of them will be."

Cabral Gold is well positioned to capitalize on these macro tailwinds through its dual-pronged near-term production and district-scale exploration strategy. The company's oxide heap leach project offers a low-cost, fast-track route to generating cash flow, while its vast land package and pipeline of exploration targets provide significant upside potential.