Mr. Mark Brennan reports

CERRADO GOLD ANNOUNCES 100% REPURCHASE OF STREAM AGREEMENTS OVER ITS MINERA DON NICOLAS AND LAGOA SALGADA PROJECTS HELD BY SPROTT

Cerrado Gold Inc. has purchased for an aggregate consideration of approximately $31.34-million (U.S.) the outstanding streaming assets over its producing Minera Don Nicolas (MDN) mine in Argentina and its Lagoa Salgada project in Portugal.

The aggregate consideration comprised the following:

• Upfront consideration of approximately $11.34-million (U.S.), satisfied with the combination of approximately $8-million (U.S.) in cash and three million common shares of Cerrado;
• Deferred consideration of $20-million (U.S.), with $8-million (U.S.) to be settled in cash on or before Oct. 6, 2026, and $12-million (U.S.) to be settled in cash on or before Jan. 4, 2027.

The deferred payment obligations are evidenced by non-interest-bearing promissory notes and have been secured by a general security agreement over the assets of Cerrado delivered in favour of the sellers. Further details regarding the transaction and purchased assets are provided below.

Transaction highlights and rationale

• Maximizes exposure for shareholders to the potential upside generated from the continuing exploration program at MDN and future exploration and development efforts at Lagoa Salgada;
• Full leverage to existing production and anticipated expansion at MDN;
• Provides full exposure to strong commodity prices at both MDN and Lagoa Salgada;
• Immediately reduces balance sheet leverage and simplifies the company's consolidated capital structure, removing security arrangements and increasing the future financial flexibility of the company;
• Sprott equity consideration demonstrates long-term value expectations of the sellers.

Mark Brennan, chief executive officer and chairman of Cerrado, commented: "We are pleased to complete the repurchase of the streams on our assets, enhancing long-term value for shareholders at a reasonable cost. This transaction will improve future cash flows, strengthen the balance sheet and increase the company's leverage to commodity prices longer term. The transaction provides shareholders with greater exposure to future exploration programs at MDN and the development of the Lagoa Salgada project. In connection with this transaction, the company is currently considering the potential to create its own streaming vehicle, which may include exposure to its own assets and potential third party streams, which we believe will further enhance shareholder value given the current premium offered to streaming vehicles in the market relative to operating companies." He also added, "We wish to express our appreciation to the team at Sprott for their support of the company over the past years, and we appreciate their desire for equity exposure as an endorsement of the upside that exists in Cerrado going forward."

Transaction description

The company has repurchased for aggregate consideration of $31.34-million (U.S.) the following streaming assets on its properties from Sprott Private Resource Streaming and Royalty (B) Corp. (Sprott Streaming) and Sprott Private Resource Streaming and Royalty (Collector) LP (Sprott Collector): (i) the amended and restated metals purchase and sale agreement with Sprott Streaming dated March 2, 2023, in respect of MDN; and (ii) the metals purchase and sale agreement dated Nov. 25, 2022, as amended on Dec. 1, 2023, with Sprott Streaming in respect of Lagoa Salgada, including the secured note dated Nov. 25, 2022, as amended on Dec. 1, 2023, in the aggregate principal amount of $19-million (U.S.) issued to Sprott Collector bearing interest at a rate of 10 per cent per annum. The transaction closed effective July 17, 2026.

The acquired assets have been repurchased for cancellation and include the Lagoa Salgada note, the Lagoa Salgada stream and the MDN stream, together with related agreements and security documents.

The aggregate purchase price for the transaction is approximately $31.34-million (U.S.), satisfied through an upfront payment comprising a combination of Cerrado common shares and cash and deferred cash payments. The upfront consideration of approximately $11.3-million (U.S.) was satisfied by the payment of approximately $8-million (U.S.) in cash and the issuance of three million common shares of Cerrado at an agreed price of $1.5719 (Canadian) per share, representing a 3-per-cent discount to the 10-day volume-weighted average trading price of the common shares of Cerrado calculated five days before closing. The common shares of Cerrado are subject to a statutory four-month hold period under applicable Canadian securities laws. The deferred portion of the purchase price consists of a non-interest-bearing $8-million (U.S.) promissory note maturing on, and to be settled in cash on or before, Oct. 6, 2026, and a non-interest-bearing $12-million (U.S.) promissory note maturing on, and to be settled in cash on or before, Jan. 4, 2027. These deferred payment obligations have been secured by a general security agreement over all of the assets of Cerrado delivered in favour of the sellers.

All security previously held by the sellers relating to the repurchased streaming assets has been released, subject to certain customary postclosing assignment, release, amendment and perfection steps relating to the acquired assets and related security that are expected to be completed following closing.

Altitude Capital Partners acted as sole financial adviser to Cerrado in connection with the structuring and negotiation of the transaction. Altitude Capital Partners is a capital markets advisory platform founded by Michael Wekerle, focused on strategic advisory and structuring for issuers in the mining and resource sectors.

The transaction has received conditional acceptance from the TSX Venture Exchange and remains subject to final acceptance of the exchange.

About Cerrado Gold Inc.

Cerrado Gold is a Toronto-based gold production, development and exploration company. The company is the 100-per-cent owner of the producing Minera Don Nicolas and Las Calandrias mine in Santa Cruz province, Argentina. In Portugal, the company holds an 80-per-cent interest in the highly prospective Lagoa Salgada VMS (volcanogenic massive sulphide) project through its position in Redcorp -- Empreendimentos Mineiros Ltda. In Canada, Cerrado Gold is developing its 100-per-cent-owned Mont Sorcier iron project, located outside of Chibougamau, Que.

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

In Portugal, Cerrado is focused on the development and exploration of the highly prospective Lagoa Salgada VMS project, located on the prolific Iberian pyrite belt in Portugal. The Lagoa Salgada project is a high-grade polymetallic project, demonstrating a typical mineralization endowment of zinc, copper, lead, tin, silver and gold. Extensive exploration upside potential lies both near the deposit and at prospective stepout targets across the large 7,209-hectare property concession. Located just 80 kilometres from Lisbon and surrounded by exceptional infrastructure, Lagoa Salgada offers a low-cost entry to a significant development and exploration opportunity, already showing its minable scale and cash flow generation potential.

In Canada, Cerrado is developing its 100-per-cent-owned Mont Sorcier high-purity, high-grade direct reduced iron project, located on the traditional Cree territory of Eeyou Istchee James Bay in the municipality of Chibougamau. The Mont Sorcier project has the potential to produce a premium iron concentrate over a long mine life at low operating costs and 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 sustainable development goals.

We seek Safe Harbor.