Mining Company Discovers Massive Gold Brazil Breakthrough

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Cabral Gold Inc. (CBR:TSX.V; CBGZF:OTCMKTS) announced the results of its recently updated Prefeasibility Study on the extraction of near-surface gold-in-oxide deposits at the Cuiú Cuiú gold district in Brazil.

Conducted by Ausenco do Brasil Engenharia Ltda., the Updated PFS highlights considerable enhancements in gold output, mine lifespan, net present value, and internal rate of return, the company said in a release.

These findings underscore that the Cuiú Cuiú gold-in-oxide starter project offers a lucrative return and a low capital threshold for entering gold mining, with production achievable within 12 months following an investment decision.

"All key financial metrics have significantly improved since we issued the results of the PFS in October 2024," said President and Chief Executive Officer Alan Carter. "The main driver behind these higher returns is the increased plant capacity, which reduces unit costs through economies of scale and allows for a lower cut-off grade, which results in higher reserves. The addition of the Machichie mining area to the production schedule offers a new source of higher grade and near surface material, enabling the project to boost throughput and extend mine life simultaneously."

The financial outcomes from this expanded project mark a substantial enhancement compared to the figures from the earlier PFS. The Base Case after-tax Net Present Value (NPV5) surged nearly 200%, from US$25.2 million to US$73.9 million, the company said. The after-tax Internal Rate of Return (IRR) also rose dramatically, from 47% to 78%, based on a base case gold price of US$2,500/oz, with the initial capital being recouped in less than a year. At the current spot gold price of US$3,340/oz, the after-tax IRR climbs to 139%, and the after-tax NPV5 reaches US$137 million.

Despite these gains, the initial capital cost remains relatively stable at US$37.7 million, only slightly up from US$37.4 million in the previous PFS, inclusive of a 10% allowance on most quantities and a 20% contingency, the release noted.

Compelling Evidence for Resource Expansion

Cabral said the project has also boosted its annual processing capacity from 720,000 tonnes per year to 1,000,000 tonnes per year, extending the mine life from 4.4 years to 6.2 years at this increased processing rate.

This expansion has led to robust cash flows in the initial years, effectively halving the time to pay back the investment from 18 months to 10 months.

"Attracting an individual like this (that works at a US$43B market cap company) is a strong vote of confidence in the company and the Cuiú Cuiú project," Blyth wrote.

Probable Mineral Reserves saw a 54% increase from the October 2024 PFS, rising from 83,762 ounces to 128,908 ounces of gold from 6.2 million tonnes at 0.65 grams per tonne gold (g/t Au).

Correspondingly, life of mine gold production escalated by 56%, from 72,478 ounces to 113,155 ounces, with an all-in sustaining cost (AISC) of US$1,210 per ounce of gold produced.

There is compelling evidence of potential for near-term expansion in the gold-in-oxide resources at Cuiú Cuiú, especially at the PDM and Jerimum Cima targets, the company noted.

The oxide starter operation at Cuiú Cuiú aligns with the company's strategic objective to establish the region's second major gold mine in the Tapajos district. This project facilitates pre-stripping for the more extensive hard rock project, which exposes the underlying primary gold mineralization, thereby reducing future waste mining costs. It also establishes an initial operating base that eases the transition to primary ore production and generates significant cash flow, which supports an aggressive, ongoing drilling and evaluation program. This program is designed to determine the most effective approach to the subsequent, larger-scale development of the hard rock resources at Cuiú Cuiú.

Expert: 'A Chance to Be Early'

Jeff Clark of The Gold Advisor noted on July 31 that Cabral has made a significant move by securing Vinícius Resende Domingues for its Board of Directors, a strategic addition that can be seen as a major win for the company's management.

Domingues, who currently serves as the general manager of regulatory affairs at Vale, Brazil's premier mining company, brings a wealth of experience that will be crucial for Cabral as they navigate the permitting process and move towards a construction decision. His involvement is also a strong vote of confidence in the company.

Domingues's credentials extend beyond his role at Vale, Clark wrote. He is a geotechnical engineer, serves on the board of IBRAM (the Brazilian Mining Institute), is an honorary lecturer at University College London, and a visiting lecturer at the Federal University of Minas Gerais in Belo Horizonte.

The immediate focus is on securing project financing for the starter oxide operation, followed by a construction decision at Cuiu Cuiu, Clark noted.

With financing likely to be secured, Cabral is poised to commence production in the latter half of 2026, he said. Currently, three drill rigs are operational on-site, aiming to increase the ounces in the global resource, including the hard rock gold deposits at Central and MG, and to define maiden resources at PDM, Machichie Main, Machichie NE, and potentially Jerimum Cima. The expansion of Cabral’s global resource is anticipated to significantly enhance the company’s cash flow from production.

Despite a recent dip in share price, there lies a potential investment opportunity, Clark said. The recent PEA, which notably tripled the NPV and reduced the payback period, has yet to reflect the value of Jerimum Cima and Pau de Merenda among other assets.

"It’s a chance to be early in what is essentially a 'pre pre-producer,' given the high odds of Cabral declaring a construction decision at some point," Clark wrote. "JV (Jeff Valks) and I are both long, strong Buy on the current dip.

In a flash note update on July 31, Analyst Don Blyth of Paradigm Capital also praised the addition of Domingues.

"Attracting an individual like this (that works at a US$43B market cap company) is a strong vote of confidence in the company and the Cuiú Cuiú project," Blyth wrote. "The Phase 1 project still provides a base of value, and, more importantly, funds exploration and studies on the larger hard rock development potential — a much larger project, and the real prize for Cabral investors (and potential acquirers)."

His extensive experience with government regulatory bodies and deep connections within the Brazilian mining sector are invaluable, the analyst noted.

The Catalyst: Gold Breakout Coming?

Gold futures kicked off Friday's trading at US$3,342.70 per ounce, marking a 1.5% increase from Thursday's closing price of US$3,293.20, Catherine Brock reported for Yahoo! Finance on August 1.

Over the course of the week, gold prices fluctuated between a Wednesday low of US$3,263.90 and a Friday morning peak of US$3,352.

This uptick in gold prices comes on the heels of Trump's declaration of new tariffs, which vary between 10% and 41% on international imports, Brock wrote. These tariffs are set to be implemented on either August 7 or October 5, based on the shipping dates of the goods, with Mexico being the sole exception.

Trump disclosed via social media on Thursday that he has granted a 90-day extension to Mexico's trade negotiation period. Concurrently, the S&P 500 saw a slight decline of 0.37% in Thursday's session, preceding the robust opening for gold on Friday, according to Brock's report.

Gold and silver prices are treading water this summer, but Florian Grummes told Jeremy Szafron of Kitco News on July 29 that the bigger breakout is coming, and patient investors will be rewarded.

"We're in a crack-up boom overall," said Grummes, managing director of Midas Touch Consulting, in an interview with Kitco News. "That means everything will move higher because they destroy the purchasing power of your fiat money — whether it's the euro, the dollar, or the Canadian dollar."

Ownership and Share Structure

According to Refinitiv, about 7% of the company is owned by insiders and management, while institutions own about 20%. The rest is retail.

Major shareholders include AMS Asset Management with 5.89%, Arbiter Partners Capital Management with 4.85%, Aegis Financial Corp. with 4.83%, the CEO Carter with 4.73%, and Director Lawrence Lepard with 1.13%.

It has 276.15 million shares outstanding and a market cap of CA$105.12 million. It trades in a 52-week range of CA$0.17 and CA$0.48.