Cerrado Gold Inc.

Good day and thank you for standing by. Welcome to Cerrado Gold's first quarter 2026 financial and operational results webcast. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question, you will need to press star 11 on your telephone. You will then hear a message advising your hand is raised. To withdraw your question, please press star 11 again. Or if you ask a question through the webcast, just type your question and send it through the chat. Please be advised that today's conference is being recorded. Now it's my pleasure to hand the conference over to the Vice President of Investor Relations, Mike McAllister. Please proceed.

Thank you, Operator. Good morning, everyone. I'd like to note that this call may contain forward-looking information that is based on the company's current expectations, estimates, and beliefs. Please review this slide and other forward-looking information contained on page two of today's presentation, as well as in the company's annual information form, which is publicly available on CDAR Plus and the company's website. The accompanying presentation for today's call is available for download from the company's website at www.seratogold.com. The accompanying press release is also posted on our website and our CDAR Plus. Please note that all dollar amounts mentioned on today's call are in U.S. dollars unless otherwise noted. Following management's presentations, as mentioned, we will have a Q&A. Joining me on today's call are Mark Brennan, our CEO and Chairman, Jason Brooks, our Chief Financial Officer, Cliff Hale-Saunders, our President, Ed Gamaris, our Executive Vice President, and David Ball, our Vice President, Corporate Development. I'd like to now turn the call over to Mark Brennan.

Thanks, Mike, and I'd like to thank everyone for joining us today. Our Q1 results have shown steady production and record cash flows. We are confident that we will continue to see strong operational and financial performance moving forward, given the improvements we have made and are making at our operations, the benefits of sustained higher gold prices, and our unhedged gold position. Furthermore, we continue to build on our financial strength while strategically deploying capital for exploration, development, and lower cost production, and driving our project pipeline with the aim to grow production while sustaining a healthy mine life. As part of our developing product pipeline, we are currently looking at a strategy of regional consolidation around our Calandria's heap leach operation, as per the Falcon property acquisition announced earlier this week. Falcon is an advanced exploration project which we believe can be brought into production as an additional heap leach project moderately quickly, contributing to a positive impact on our life of mines. Internally, the greatest concern that management has had regarding MDN was the short life of mine. We believe that the short life of mine has had an impact on how the MDN project is perceived and how it has been valued. With the addition of Falcon, it is Serato management's perspective that the concerns regarding the long-term future potential at MDN have been mitigated and any success with underground exploration or from the 50,000-meter surface exploration program currently underway should foster increased production levels. At our other operations, we continue to advance Lagoa Salgada and hope to be in a position to provide greater detail of our development plans over the next few months. At Montsourcier, we continue on our path to complete our feasibility study by the end of June. Progress with both projects continues to strengthen management's belief that there remains significant value to be unlocked at both projects for Serata shareholders. I'd now like to turn the call over to Jason Brooks to take us through the financial highlights of Q1.

Thanks, Mark. And turning to slide three. So in the first quarter of 2026, the company produced 12,842 gold equivalent ounces as compared to 11,163 ounces for the same period last year. Operational results for Q1 2026 show production remained consistent relative to the previous quarter. Production rates increased at the heat bleach compared with the previous quarter. However, irrigation issues continue to have an impact on production. Water availability continues to improve as we move into the wetter months in Argentina and remain supported by ongoing purchases and additional water from expanded borehole water production. As more irrigation water becomes available, the gold inventory on the pad that has not been fully irrigated will be recovered over time. Recovery rates remained lower than planned due to the mix of primary ore placed on the leash paths as per the mine sequence, as well as reduced irrigation. This was offset by steady output from the CIL plant, which maintained overall production rates. The company maintains its 2026 guidance for gold equivalent ounce production to be between 50 and 60,000 ounces. The company generated record EBITDA for Q1 of 28.7 million, as it realized the benefit of an unhedged gold position. All in sustaining cost per ounce of gold produced for Q1 2026 were lower at $1,348 per ounce, which was a reduction relative to prior quarters due to the increase in silver credits, which more than offset water and other related costs due to ongoing inflationary pressures in Argentina. Net income from operations for the first quarter of 2026 was $12.9 million, as compared to a net loss of $4.2 million for the three months ended March 31st, 2025. The increase in net income is primarily a result of a $24.2 million increase in revenue and a decrease in the loss on remeasurement of stream obligations of $4.6 million, offset by a $4.0 million increase in income taxes, a $3.1 million increase in depreciation expense, as well as a $2.9 million increase in foreign exchange gain and loss. Finally, the company finished the quarter with a strong cash position of $31.4 million. During 2026, given the current gold price environment, the company expects to continue improving its cash position while still meeting capital allocation needs for project growth plans. With that, I would now like to turn the call back to Mark to take us through some production highlights and outlook for the quarter.

Thank you, Jason. Turning to slide four of the presentation, during the first quarter, the focus at MDN was on the development of the underground, which had an impact on the amount of work available for immediate processing, but will now allow access to larger amounts of work during the coming quarters and is expected to improve head grades and increase production during Q2 and Q3. The company continues to advance its 50,000-meter exploration program at MDN, The program is focused on near-term mine targets with the potential to material increase production and extend mine life. This includes supporting medium-term operational sustainability through high-grade underground feed to the CIL plant, as well as increasing the water resources available for heap leach processing. We have four owner-operated drill rigs turning as we speak and remain encouraged by the results we are seeing. Once we have critical mass for areas that we have completed initial drilling and have a proof of concept, we will release results to the market. Certification of our internal lab continues to progress well and is expected to be completed in Q3, thereby shortening significant turnaround times and improving drilling performance and targeting. We also have a fifth drill arriving in July that will focus exclusively on the Paloma underground, which is open at depth on a long strike and has the potential to increase the grade to the mill and produce production rates. Our goal is to expand production while sustaining the mine life at five to six years. At Legoso Gata, we are continuing to work on an optimized feasibility study while pursuing permitting and project financing. We remain focused on working through permitting issues related to the EIA submissions with various government agencies and through the courts in Portugal. The company has secured an interim junction which temporarily suspends the effects of the unfavorable opinion pertaining to the EIA. We plan to continue advancing the optimized feasibility study and the recap or detailed engineering phase to bring the project to a construction-ready decision once the permitting issues have been resolved. We currently estimate that the commencement of construction could occur in the summer of 2027. At Montsourcier, work continues on delivering a bankable feasibility study by the end of June of this year. We continue to expect to submit the environmental and social impact assessment in Q1 2027. As a result, permits are expected in early 29, which suggests that construction could commence in late Q1 of 2029. Montsourcerie is being designed to produce 8 million tons per annum of high-grade 67% iron ore concentrate, which will feed the fastest-growing segment of the iron ore market for which premium prices are expected. I would turn to slide four. I'd also like to take a moment to discuss the company's recent acquisition of the Falcon properties located adjacent to Monero Don Nicholas' Calandias operations. The strategic acquisition hosts additional modernization near our existing operations, and beyond Falcon, we see an opportunity to leverage our installed infrastructure and to drive regional consolidation in the area, enhancing and extending the potential mine life at our Calandias heap leach operations and extending MDN's long-term mineral growth potential. An internal target for exploration at Falcon outlined during the due diligence process indicates a potential of 150,000 to 200,000 ounces of gold with projected grains ranging from 0.8 to 1.1 grams per ton. With the acquisition closed, we are now commencing a 5,000-meter definition and exploration drill program for resource definition and to test the significant exploration potential to further grow resources in the next three months. We believe this acquisition will help us achieve our goal of building resources and extending our mine life at MDN. This strategy now in its early execution stage will be expanded in the coming months and expected to yield material improvements in mine life and potentially increase production rates in the near term. This concludes the presentation portion of the call. I will now turn the call back to Carmen, our operator, to open the call for Q&A questions.

Thank you so much. And as a reminder, if you have a question, just press star 1-1 to get in the queue and wait for your name to be announced. No additional questions in the queue. I will turn it to Mike Malister for any webcast questions.

Mike Malister Thank you, operator. We do have one on the webcast. It's asking from Randy's FedBuck. Can you explain how the offtake arrangement will flow through the balance sheet in the coming quarters?

Is there any collection risk associated with this figure?

Please stand by, ladies and gentlemen. We're having audio difficulties. One moment, please. Please stand by, ladies and gentlemen. We're having some technical difficulties. Please stand by. Ladies and gentlemen, thank you for standing by. Please continue to hold as we're experiencing some technical difficulties.

Thank you for continuing to hold.

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It's been great.

Thank you so much. Our target here would be to target that $1,800 to all unsustaining costs, and anything below that, we're very pleased with.

Great. Operator, that concludes any questions we have on the webcast. I'll just turn it back to Mark for any closing remarks.

Well, I'd like to thank you very much for listening to this call. Again, we're very encouraged by now being in a position to not only have the potential for a good term of sustaining mine life, but also looking to grow our production levels. We spent last year kind of putting ourselves in a position where we had the financial capability to grow opportunities. As you saw with the acquisition of Falcon, this was actually a fairly attractive acquisition opportunity with very little cash up front. And we are looking to add to our pipeline where we can find cheap ounces to drive long-term life of mine, but also that objective of materially increasing our production levels. Again, everything is looking very positive in Quebec with our feasibility study. We'll have more news of that coming shortly. And also news of Portugal, which we hope will have a positive solution to drive that project into construction in the next year. With that, thank you all for joining us on this call, and we're available at any time for discussion or for any questions that you may have. Thank you.

Thank you. And this concludes our conference. You may now disconnect.