Cabral Gold Secures $45M Financing and Construction Approval for Brazil Heap Leach Project

• Cabral Gold has executed a US$45 million gold loan agreement with Precious Metals Yield Fund to fully fund its Cuiú Cuiú heap leach starter project in Brazil's Tapajós region.
• The company's Board of Directors has approved a construction decision for the project, which features a 78% post-tax IRR, US$74 million NPV5, and 10-month payback period at US$2,500/oz gold.
• The 39-month gold loan carries a 10% annual interest rate with principal repayments of 39 kilograms of gold per quarter beginning March 2027, representing under 14% of forecast project gold production.
• With approximately C$70 million in treasury upon drawdown, Cabral will transition from early works to full construction in November 2025, targeting plant commissioning in Q3 2026 and production in Q4 2026.
• The financing structure allows the company to continue regional exploration drilling during construction without significant additional equity dilution to shareholders.

Cabral Gold Inc. (TSXV: CBR) (OTCQB: CBGZF) is a junior resource company focused on the identification, exploration, and development of gold properties in Brazil, with primary operations at the Cuiú Cuiú gold district in the Tapajós region of Pará state. The company holds a 100% interest in the district, which contains NI 43-101 compliant Indicated resources of 12.29Mt @ 1.14 g/t gold (450,200oz) in fresh basement material and 13.56Mt @ 0.50 g/t gold (216,182oz) in oxide material, plus additional Inferred resources. The announcement on October 15, 2025 marks a significant milestone as the company transitions from exploration and development into construction and near-term production.

The financing package announced by Cabral Gold addresses a critical challenge facing junior mining companies: securing non-dilutive capital to advance projects through construction. The US$45 million gold loan from Precious Metals Yield Fund, an affiliate of the company's largest institutional shareholder Phoenix Gold Fund, provides complete funding for the US$37.7 million capital expenditure outlined in the Pre-feasibility Study released in July 2025. The Board's simultaneous approval of a construction decision signals management's confidence in the project economics and readiness to move forward.

Gold Loan Structure & Terms

The gold loan agreement features a 39-month term with drawdown expected within weeks, subject to registration of security interests. The US$45 million principal amount can be advanced to Cabral in either gold or cash at the company's option. If advanced in cash, the outstanding balance will be expressed in fine gold kilograms based on the gold price at drawdown, effectively locking in gold prices for debt service obligations.

The financing carries a 10% annual interest rate, with 100% of interest costs capitalized to principal until December 2026. This structure provides near-term cash flow relief during the construction phase. Principal repayments commence March 31, 2027 at 39 kilograms of gold per quarter. The agreement includes provisions for penalty-free repayment of outstanding principal and interest, providing flexibility if the company generates stronger cash flows than anticipated.

Notably, the gold loan contains no hedging requirements, cash sweeps, cash collateralization, or offtake agreements. This structure is relatively borrower-friendly compared to typical mine finance packages, which often include restrictive covenants and revenue sharing mechanisms. The gold loan principal and interest are forecast to account for under 14% of gold produced during the project's life and 32% of gold produced during the loan's life.

As part of the financing, Cabral will issue 10 million non-transferable common share purchase warrants to the lender upon drawdown. Each warrant entitles the lender to acquire one common share for C$0.71 per share, representing a 50% premium to the five-day volume-weighted average price ending October 15, 2025. The warrants have a 24-month exercise period and will be subject to a four-month-plus-one-day statutory hold period under Canadian securities laws.

Project Economics & Technical Parameters

The Cuiú Cuiú heap leach starter project is designed to monetize gold contained in surface oxide blankets through a 1 million tonne per annum capacity heap leach processing facility. According to the Updated Pre-Feasibility Study prepared by Ausenco and released July 29, 2025, the project demonstrates robust economics with a 6.2-year mine life and all-in-sustaining operating costs of US$1,210 per ounce.

At the base case gold price of US$2,500 per ounce, the project returns a post-tax internal rate of return of 78% and a net present value (discounted at 5%) of US$74 million. The payback period is estimated at just 10 months from the start of commercial production, representing exceptionally rapid capital recovery for a mining project. Initial capital costs are estimated at US$37.7 million, of which approximately US$3 million has already been invested in early works activities.

The financial appeal of the project has strengthened considerably since the Pre-feasibility Study release due to substantial increases in gold prices. While the base case used US$2,500 per ounce, spot gold prices have reached record levels above US$2,700 per ounce in recent months, suggesting potential upside to the modeled economics.

Alan Carter, Cabral's President and CEO, emphasized the compelling nature of the project metrics: 

"This Gold Loan agreement is a monumental step forward for our Company and provides a complete funding solution for the construction of our heap leach starter project, without any significant further dilution to our capital structure. The financial metrics included within the recent PFS study make for a compelling opportunity, with a capex cost of US$37.7M, a post tax IRR of 78%, an NPV5 of US$74M and a payback of just 10 months, at a base case gold price of US$2500 / oz."

Construction Timeline & Implementation

With the Board of Directors' construction approval, Cabral expects to transition from early works to full construction mode beginning November 1, 2025. The company has been advancing detailed engineering and procurement activities as part of the early works phase, while building out the project implementation team under Construction Manager Luiz Celaro.

The construction schedule targets completion of earthworks and civil works on the production plateau by the end of 2025, representing a critical milestone for the 12-month construction timeline. Plant commissioning is scheduled for the third quarter of 2026, with commercial production expected to commence in the fourth quarter of 2026. This aggressive timeline reflects the relatively straightforward nature of heap leach processing technology and the groundwork already completed during the early works phase.

Upon drawdown of the gold loan, Cabral will have approximately C$70 million in treasury, providing substantial financial flexibility. This cash position includes proceeds from a C$14.9 million equity raise completed in May 2025, as announced in the company's May 6, 2025 press release. The strong treasury balance provides a cushion for potential construction cost overruns or delays, reducing execution risk for investors.

Regional Exploration Strategy

A significant advantage of the gold loan structure is that it enables Cabral to continue regional exploration drilling during the construction period and beyond. The company's exploration program aims to expand the much larger underlying hard-rock resource base at Cuiú Cuiú, with more than 50 targets identified across the district to date.

Carter outlined the exploration strategy: 

"The Gold Loan agreement also allows us to continue our program of exploration drilling during the construction period and beyond. This program is aimed at expanding the much larger underlying hard rock resource base at Cuiú Cuiú. Following the commencement of commercial production in Q4, 2026, this exploration drill program will expand to test the more than 50 targets so far identified across the Cuiú Cuiú district, and is expected to be self-funding."

The ability to maintain exploration activities during construction is strategically valuable, as it positions the company to potentially expand mine life and production capacity once the heap leach operation is generating cash flow. The Cuiú Cuiú district sits within the Tapajós Gold Province, site of Brazil's largest historical gold rush, which produced an estimated 30 to 50 million ounces of placer gold between 1978 and 1995 according to Brazil's National Mining Agency. Cuiú Cuiú itself was the largest area of placer workings in the Tapajós, producing an estimated 2 million ounces historically.

This geological context suggests significant exploration potential remains in the district. The current resource base includes both oxide material targeted by the heap leach starter project and fresh basement material that could support future hard-rock mining operations. Continued exploration drilling funded by operational cash flow could materially expand the company's resource inventory and extend mine life well beyond the current 6.2-year projection.

Capital Structure & Shareholder Considerations

The financing structure announced by Cabral addresses a key concern for junior mining investors: equity dilution during the transition from development to production. By securing debt financing for the full construction capital requirement, the company has minimized the need for additional equity raises that would dilute existing shareholders.

Carter specifically highlighted this advantage, noting the agreement "provides a complete funding solution for the construction of our heap leach starter project, without any significant further dilution to our capital structure." The 10 million warrants issued to the lender represent approximately 2.8% of the company's outstanding shares based on typical junior mining company capitalizations, and the C$0.71 exercise price represents a 50% premium to current trading levels.

The gold loan's cost of capital at 10% annual interest is competitive relative to typical project finance structures in the mining sector, particularly for a junior company with no operating history. The ability to lock in gold prices for debt service obligations through the loan's structure denominated in gold kilograms provides a natural hedge against gold price volatility.

The involvement of Precious Metals Yield Fund, an affiliate of Phoenix Gold Fund, the company's largest institutional shareholder, suggests strong insider confidence in the project. Related-party financing can raise governance concerns, but it also demonstrates that sophisticated investors with detailed knowledge of the company are willing to commit significant capital to the project.

For Investors

For investors evaluating Cabral Gold, the announcement represents a significant de-risking event. The company has secured full construction financing, obtained Board approval to proceed, and established a clear timeline to production within approximately 14 months. The project economics appear robust even at conservative gold price assumptions, with substantial upside leverage to higher gold prices.

Key investment merits include the rapid payback period of 10 months, strong IRR of 78%, and manageable capital intensity at US$37.7 million for a project generating US$74 million in NPV. The all-in-sustaining cost of US$1,210 per ounce provides significant margin at current gold prices above US$2,700 per ounce. The heap leach processing method is well-established technology with relatively low technical risk compared to more complex metallurgical processes.

Risk factors for investors to consider include construction execution risk, particularly the aggressive 12-month construction timeline; operational risk associated with achieving forecast production rates and costs; gold price volatility; and political risk associated with mining operations in Brazil. The company's ability to satisfy conditions precedent for drawdown of the gold loan and obtain TSX Venture Exchange approval also represents near-term execution risk. Additionally, the exploration upside, while potentially significant, remains speculative until drilling results confirm resource expansion.

The broader investment thesis depends on Cabral's ability to execute construction on time and on budget, achieve commercial production in Q4 2026, and generate sufficient cash flow to repay the gold loan while funding exploration activities. Success would position the company to potentially expand operations beyond the initial 6.2-year mine life and establish a sustainable production profile. For investors seeking exposure to near-term gold production with exploration upside in a jurisdiction with established mining infrastructure, Cabral Gold presents a compelling opportunity at this stage of development.