Cabral Gold: Two-Stage Development Strategy Offers Near-Term Cash Generation & Long-Term Upside

• Cabral Gold's updated Pre-Feasibility Study delivers exceptional economics with a 78% post-tax IRR and 8-month payback period at current gold prices, projecting $50-60 million in annual pre-tax cash flow from a starter operation that trades below the company's current market capitalization.
• The Cuiu Cuiu project strategically sits adjacent to Brazil's third-largest gold mine (G Mining's Tocantinzinho), providing shared infrastructure benefits, proven district geology, and validation of the region's mining economics in an established gold camp.
• Management's innovative two-stage development strategy eliminates the need for dilutive equity raises by using oxide operation cash flows to self-fund aggressive exploration across 50+ high-priority targets, breaking the traditional junior mining financing cycle.
• The company expects to secure financing within 90 days followed by a 12-month construction timeline targeting H2 2026 production, providing investors with clear visibility to near-term cash generation and multiple re-rating catalysts.
• The current 1.3 million ounce resource represents early-stage validation of district-scale potential targeting 5-10 million ounces across a massive land package, with recent discoveries including exceptional drill results of 11 meters at 33 grams per tonne gold at Mashishi Northeast.

Cabral Gold: A Self-Funding Gold Growth Story

In an environment where junior mining companies struggle with dilutive financing and extended development timelines, Cabral Gold (TSX-V: CBR) has engineered a solution that addresses the sector's fundamental challenges while positioning investors for returns.

CEO Alan Carter has structured a two-stage development approach that prioritizes immediate cash generation over traditional long-term financing models. 

"We want to get off that hamster wheel," Carter explains, referring to the cycle of dilutive equity raises that plague junior miners. 

"We've got a very unusual project here in that our gold deposits are weathered down to 60 meters. Very, very deep weathering. They're all sitting on hilltops, so that means the stripping ratio is very low."

This geological advantage forms the foundation of Cabral's investment thesis. The company's Cuiu Cuiu project in northern Brazil sits "immediately next door to G Mining's Tocantinzinho mine," Carter notes. 

"G Mining have just achieved nameplate production. It's the third largest gold mine and we're right next door." 

This strategic positioning provides infrastructure benefits while validating the district's geological potential.

For investors, the opportunity represents a rare combination of near-term cash generation certainty and long-term district-scale upside. The updated Pre-Feasibility Study delivers metrics that stand out even in today's strong gold price environment, while the exploration potential offers leverage to a multi-million ounce discovery story.

Interview with President & CEO, Alan Carter

The Updated PFS

Cabral's recently released updated PFS transforms the project's investment profile through a combination of optimization, scale expansion, and higher gold price assumptions. The results demonstrate the kind of economic leverage that creates generational wealth for early investors.

"The IRR has jumped from 47% nine months ago to 78% post-tax today," Carter reveals. "The amount of material that we're going to be mining and processing has jumped from 2,000 to 3,000 tons a day. The CAPEX is virtually unchanged. It's now at 37.7 million US, so it's up 1%. And the gold production is up about 54%."

These metrics translate into compelling investment returns at multiple gold price scenarios. At the study's $2,500/oz assumption, payback occurs in 10 months. "At $3,000 gold,. it's seven or eight months," Carter confirms, with gold currently trading above $2,600/oz.

The annual cash generation potential deserves particular attention from value-focused investors. The starter operation projects $50-60 million in annual pre-tax cash flow, while Cabral's current market capitalization trades significantly below this single-year projection. "Our market cap right now is less than that," Carter acknowledges. "So yeah, it's exciting times."

Risk mitigation extends throughout the project's technical assumptions. Metallurgical testing conducted at "Kappes, Cassiday... the number one lab for looking at samples from heap leach" validates 87% recovery rates over two-month leach cycles. Importantly, "the 87% that we used in the study is a discount to what the results were in the lab, which were low to mid 90% recoveries."

The operational approach further reduces execution risk through on-off heap leach pads rather than permanent stacking. 

"If there are any issues with the metallurgy initially, and there may be, but if there are, we will design the next heap, which we will build two months later, slightly differently," 

Carter explains, highlighting the system's built-in adaptability.

Financing Strategy: Right-Sized for Success

Cabral's approach to project financing reflects sophisticated understanding of current capital market dynamics and positions the company for optimal execution. Rather than pursuing unrealistic large-scale equity raises, management has sized the development to match available funding sources.

"We're not going to do a massive equity raise for $37 million US here. It's going to be likely a combination of debt, possibly a stream, and possibly some equity." 

This mixed approach leverages the project's exceptional economics while preserving equity value for existing shareholders.

The financing conversations reflect genuine market appetite for projects with Cabral's risk-return profile, following the updated PFS release. Carter notes:"Those conversations tell us there's a real serious appetite and that appetite, by the way, has clearly just increased" 

Timeline visibility provides investors with clear catalysts for value realization:

“We're hoping that we can have the financing secured within the next two, three months," Carter projects.And then we will make a construction decision once we've got the financing secured. So second half of this year, hopefully by the end of the third quarter, we will have the financing secured."

The contrast with typical junior mining financing challenges is stark: 

"A lot of the companies are talking about projects where they've got capital requirements of $300, $400, $500 million to build their project. But the market cap is only $100 million they've got no chance of getting that debt or financing package in place."

Construction preparation demonstrates management's commitment to execution timelines. Carter confirms:

"We've already ordered several long lead items like the ADR plant, which is the key recovery plant. So that's on order already.” 

Operational Excellence: Simplicity Drives Margins

The oxide operation's technical approach maximizes margins through operational simplicity while minimizing execution risk. This represents a stark contrast to typical mining operations requiring complex processing circuits and extensive infrastructure. Carter explains:

"There's no crushing or grinding required here because it's weathered material. It's basically mud. And on the mining side, obviously we're not drilling and blasting. So it's basically excavators that are scooping up this material, digging it out.”

The 12-month construction timeline reflects this operational simplicity, targeting production by H2 2026. Project execution combines internal expertise with world-class engineering support through Ausenco, "one of the world's largest engineering firms."

Infrastructure advantages from neighboring G Mining's Tocantinzinho operation reduce both capital requirements and operational risk. 

“Access to our project is from the south east and it's the same road that we come in and from the north south highway, the BR163 that G Mining uses for its Tocantinzinho. So they've obviously upgraded that."

Expansion capability has been designed into the initial operation, providing option value for investors.

"In the layout of the updated PFS, there is space to add a fifth pad. And that could be done very, very cheaply. So by adding a fifth pad, you obviously increase the capacities by 20%."

The District-Scale Prize: Multi-Million Ounce Potential

While near-term cash generation captures immediate investor attention, Cabral's long-term value lies in district-scale exploration potential across a massive land package. The current 1.3 million ounce resource represents early-stage validation of what Carter believes could become a 5-10 million ounce district.

Recent drilling results demonstrate the quality of targets under evaluation. At Machichie Northeast, 

"We've drilled some amazing numbers... Last year we drilled 11 meters at 33 grams. Step out holes have 12 meters at 27, six meters at 13, five meters at 24 grams."

The exploration pipeline extends well beyond current drill targets. Carter highlights significant discovery potential:

"We've probably got about 10 or 12 different boulder fields. Some of these boulder fields are averaging 90 grams a ton. ." 

Carter's confidence stems from intimate knowledge of regional geology:"Being involved in the discovery of Tocantinzinh - I used to personally own the royalty in that project -  I know about this area."

The cash generation from oxide operations will dramatically accelerate exploration activities. With $50-60 million in annual cash flow, "we can be very aggressive with the drilling of the underlying hard rock material."

Resource growth timing aligns with value maximization objectives. "I'd like to update the resource when it's above  2-2.5 million ounces. It will keep growing because there are 50 targets beyond the ones I've just mentioned."

Risk Mitigation & Execution Readiness

Cabral has systematically addressed the primary risk factors that concern mining investors, from metallurgical uncertainty through permitting delays to community relations.

Permitting provides a clear pathway to production with trial mining licenses already in place. 

"We're permitted to build stage one. We've got trial mining licenses in place that allow us to build the full size plant." 

Full mining license progression remains on track with LP expected "in the next two or three months" and full licenses by year-end.

Community engagement reflects genuine partnership rather than regulatory compliance. 

"We've put in a new water supply. So the village now has piped water to all the houses all year round. That wasn't the case before we arrived." 

Educational investment includes a new school with "this fantastic computer lab there which everybody's telling us that are the best in the whole region."

Metallurgical risk has been extensively studied through comprehensive test work programs, while the on-off pad approach provides operational flexibility unavailable to permanent heap leach operations.

Multi-Catalyst Investment Timeline

Cabral offers investors multiple value realization catalysts over the next 18 months, creating sustained newsflow and re-rating opportunities:

• Near-term (0-3 months): Financing completion provides immediate de-risking and construction decision catalyst. Management expects to "have the financing secured within the next two, three months."
• Medium-term (3-15 months): Construction progress and long-lead item delivery demonstrate execution capability, while ongoing drilling results expand the resource base.
• Production timeline (15-18 months): First gold production validates the development approach and initiates cash generation, with ramp-up to full capacity generating $50-60 million annually.
• Growth phase (18+ months): Self-funded aggressive exploration across 50+ targets, resource updates targeting multi-million ounce growth, and Phase 2 hard rock development studies.

The Investment Thesis for Cabral Gold

• Immediate Value Drivers: 78% IRR with 8-month payback at current gold prices creates exceptional risk-adjusted returns. $37.7M capex requirement matched to realistic financing capacity and market appetite.  Clear 18-month timeline to $50-60M annual cash generation with minimal execution risk
• Strategic Advantages: Adjacent to Brazil's third-largest gold mine with shared infrastructure and proven geology. Self-funding growth model eliminates dilutive equity raises plaguing junior mining sector. Experienced management team with proven regional track record and discovery history
• Growth Potential: District-scale exploration targeting 5-10 million ounce potential across massive land package. Recent high-grade discoveries including 11m @ 33 g/t gold demonstrate target quality. 50+ unexplored targets provide sustained exploration pipeline for value creation
• Risk Mitigation: Extensive metallurgical test work validates 87% recovery assumptions with built-in conservatism. On-off heap leach design provides operational flexibility unavailable to permanent pad operations. Permitting progression on track with trial licenses in place and full licenses expected by year-end

Cabral Gold represents a paradigm shift in junior mining investment opportunities. The company has engineered a solution to the sector's fundamental financing challenges while maintaining exceptional upside leverage to district-scale discovery potential. With financing expected imminently and clear visibility to cash generation, Cabral offers investors a rare combination of near-term certainty and long-term growth optionality.

The oxide starter operation's exceptional economics provide immediate value realization, while the exploration potential offers leverage to a transformational discovery story. For investors seeking exposure to gold sector growth without typical junior mining risks, Cabral's systematic approach to development and value creation presents a compelling opportunity at current valuations.

Brazil Gold Sector: Macro Tailwinds Supporting Premium Valuations

Brazil's emergence as a tier-one gold jurisdiction creates powerful macro tailwinds supporting companies like Cabral. The Tapajós region has evolved from underexplored frontier to established mining district, validated by G Mining's successful Tocantinzinho operation achieving nameplate production as Brazil's third-largest gold producer.

This transformation catalyzes infrastructure development including upgraded transportation networks and power transmission lines that benefit district participants. Regulatory frameworks have evolved to support development while maintaining environmental standards, with clear pathways through Brazil's three-stage environmental licensing process.

Currency dynamics provide operational advantages as local costs benefit from Brazilian real weakness while gold sales occur in US dollars. This natural hedge amplifies cash flow generation and provides built-in protection against local cost inflation.

The broader precious metals environment supports sustained strength through central bank accumulation, geopolitical tensions, and monetary debasement concerns. Supply constraints limit new production growth globally, positioning Brazil's untapped potential to capture disproportionate development capital allocation.

These macro factors create an optimal environment for companies with Cabral's development profile, combining geological opportunity with operational advantages and structural market support that should drive premium valuations for successful operators.