Mr. Mark Brennan reports

INITIAL US$4 MILLION PESO EQUIVALENT OPTION PAYMENT RECEIVED WHICH FURTHER STRENGTHENS BALANCE SHEET; REMAINING CONSIDERATION OF US$10 MILLION PESOS EQUIVALENT PAYABLE ON EXERCISE WITHIN 3 YEARS

Cerrado Gold Inc.'s wholly owned subsidiary Minera Don Nicolas SA (MDN) has received the option payment of $4-million (U.S.) equivalent in Argentine pesos at the CCL buyers' rate pursuant to the previously announced option agreement with Cerro Vanguardia S.A. (CVSA), a wholly owned subsidiary of AngloGold Ashanti Holdings PLC. MDN has granted to CVSA the option to purchase a 100-per-cent interest in certain exploration properties located in the south region of its Minera Don Nicolas project in Santa Cruz, Argentina.

Mark Brennan, chief executive officer and chairman, commented: "The option of these non-core properties immediately improves the balance sheet and short-term capital position at MDN allowing MDN to focus on its core properties. In addition to our current strong operating cashflows at MDN and capital proceeds from previous asset sales, we are well positioned to pursue growth programs at our MDN mine and our Mont Sorcier high-grade iron project, as well as allowing us to consider additional opportunities to grow the company in the near term."

The company also announces that it has issued a loan to Ascendant Resources Inc. in the principal amount of $275,000 (U.S.). The loan bears interest at a rate of 10.0 per cent per annum, compounded monthly and matures on demand, on not less than 366 days notice.

Ascendant is a Toronto-based mining company focused on the exploration and development of the highly prospective Lagoa Salgada VMS project located on the prolific Iberian pyrite belt in Portugal. Additional information on Ascendant can be found on its website.

The company notes that while there is a commonality of directors and officers between Cerrado and Ascendant, the companies are not "related parties" as defined in Multilateral Instrument 61-101 -- Protection of Minority Shareholders in Special Transactions, and accordingly the loan is not considered a "related party transaction" as defined in MI 61-101.

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.

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