Mr. Mark Brennan reports

MINERA DON NICOLAS ENTERS OPTION AGREEMENT WITH ANGLOGOLD ASHANTI ARGENTINIAN SUBSIDIARY, CERRO VANGUARDIA SA, FOR THE SALE OF ITS MICHELLE EXPLORATION PROPERTIES FOR TOTAL CONSIDERATION OF US$14 MILLION

Cerrado Gold Inc. and its wholly owned subsidiary Minera Don Nicolas SA have entered into an option agreement with Cerro Vanguardia SA, a wholly owned subsidiary of AngloGold Ashanti Holdings PLC, whereby MDN has granted to CVSA the option to purchase a 100-per-cent interest in certain properties located in the south region of MDN's Minera Don Nicolas project in Santa Cruz, Argentina, for total consideration of the Argentine peso equivalent of $14-million (U.S.) (approximately $19-million (Canadian)), subject to the fulfilment of certain conditions. The option agreement was ratified Dec. 23, 2024, with effect Dec. 18, 2024.

Minera Don Nicolas enters option agreement with AngloGold Ashanti Argentine subsidiary Cerro Vanguardia for the sale of its Michelle exploration properties for total consideration of $14-million (U.S.)

The purchase price is payable in the following stages:

1. $4-million (U.S.) equivalent in Argentine pesos at the CCL buyers rate upon grant of the option;
2. $10-million (U.S.) equivalent in Argentine pesos at the CCL buyers rate upon exercise of the option within three years.

During the option period, CVSA will take operational control of the Michelle properties.

Mark Brennan, chief executive officer and chairman, commented: "The option of these non-core properties to CVSA, the logical owner of these properties, is highly accretive to Cerrado and its shareholders. The transaction will immediately improve the balance sheet and short-term capital position at MDN, allowing us to focus on our core properties. With current strong operating cash flows at MDN and capital proceeds from asset sales, we are very well positioned to pursue strong growth programs at MDN and at our Mont Sorcier high-grade iron project, as well as look at additional opportunities to grow the company in the near term."

Transaction summary and details

The Michelle properties are a collection of 14 exploration concessions, totalling approximately 14,000 hectares located approximately 100 kilometres to the southeast of the MDN plant and 10 km to the northwest of CVSA's Cerro Vanguardia mine.

MDN will receive from CVSA the Argentine CCL peso equivalent of $4-million (U.S.) to MDN on or about Dec. 27, 2024.

CVSA may exercise the option at its sole discretion at any time within three years unless earlier terminated by providing an exercise notice to MDN and paying the exercise price of the Argentine peso equivalent of $10-million (U.S.). The option may be exercised at CVSA's sole discretion at any time during the option period, provided that the required payment has been paid by CVSA. Pursuant to the terms of the option agreement, CVSA is intended to assume operational control of the Michelle properties from the date of the option agreement until the expiry of the option period.

Royalty and stream holders

Concurrent with the transaction, MDN obtained prior written consents to the transaction and the exercise of the option from all holders of royalty and metal streams applicable to the Michelle properties, including RG Royalties LLC, a subsidiary of Royal Gold Inc., Sandstorm Gold Ltd., a subsidiary of Sandstorm Gold Royalties, and Sprott Private Resource Streaming and Royalty (B) Corp. Receipt of the consents reduces risks and expedites closing if CVSA elects to exercise the option.

Prior to executing the option agreement, Royal Gold was paid all accrued royalty amounts outstanding as of Sept. 30, 2024, and Sandstorm was paid a lump sum. Both Royal Gold and Sandstorm agreed to waive all accrued interest and penalties on royalty amounts outstanding as of Sept. 30, 2024, provided that, in the case of Sandstorm, all royalty amounts are paid when due in instalments over the next two quarters. The waiver of accrued interest and penalties, taken together with the repayment of outstanding royalties, results in substantial reductions of company accounts payable. In connection with the consents and the waiver of interest and penalties, the company provided corporate guarantees to Royal Gold and Sandstorm relating to their royalty agreements with MDN, and MDN has conditionally agreed to pay Sandstorm up to $500,000 (U.S.) in connection with a cap on royalty payments on the Michelle properties subject to the existing maximum royalty amount of approximately $1.3-million that may be payable to Sandstorm under the applicable Sandstorm royalty agreement.

Review of technical information

The scientific and technical information in this press release has been reviewed and approved by Sergio Gelcich, PGeo, vice-president, exploration, for Cerrado, who is a qualified person as defined in National Instrument 43-101.

About Cerrado Gold Inc.

Cerrado is a Toronto-based gold production, development and exploration company focused on gold projects in South America. The company is the 100-per-cent owner of both the producing Minera Don Nicolas and Las Calandrias mine in Santa Cruz province, Argentina. In Canada, Cerrado is developing its 100-per-cent-owned Mont Sorcier iron ore and vanadium project located outside of Chibougamou, Que.

In Argentina, Cerrado is maximizing asset value at its Minera Don Nicolas operation through continued operational optimization and is increasing production through its operations at Las Calandrias heap leach project. An extensive campaign of exploration is continuing to further unlock potential resources in its highly prospective land package in the heart of the Deseado masiff.

In Canada, Cerrado holds a 100-per-cent interest in the high-grade, high-purity Mont Sorcier iron ore and vanadium project, which has the potential to produce a premium iron ore concentrate over a long mine life at low operating costs and with low capital intensity. Furthermore, its high-grade and high-purity product facilitates the migration of steel producers from blast furnaces to electric arc furnaces, contributing to the decarbonization of the industry and the achievement of SDG goals.

We seek Safe Harbor.