Cerrado Gold Inc. has announced a definitive agreement to acquire Ascendant Resources Inc. in a transaction valued at approximately $27.7 million in shares. The acquisition will give Cerrado an 80% interest in the advanced Lagoa Salgada polymetallic VMS project in Portugal.

The deal, structured as a plan of arrangement, will see Ascendant shareholders receive one Cerrado share for every 7.8 Ascendant shares. Upon completion, Ascendant shareholders will own approximately 21% of the outstanding Cerrado shares. Cerrado currently owns approximately 8.8% of Ascendant’s outstanding shares. Certain Ascendant shareholders, including directors, officers, and Sprott, have entered into voting support agreements.

The Cerrado private placement and the first tranche of Sprott's deferred interest share issuance are anticipated to close around February 11, 2025, or as soon as possible after conditional TSX approval and TSX-V approval are granted.

The Lagoa Salgada project is a potentially low-cost zinc-lead-copper volcanogenic massive sulfide (VMS) deposit situated in the northwestern part of the Iberian Pyrite Belt, a region known for world-class VMS mines like Neves-Corvo. Discovered by the Portuguese Geological Survey in 1992, Lagoa Salgada underwent exploration by several companies, including Rio Tinto, before Ascendant Resources acquired a majority interest in 2018.

The project is advancing towards production with a focus on low-cost operations and substantial near-term value creation potential. Its advanced stage of development, coupled with positive feasibility studies, positions Lagoa Salgada as a significant asset.

Cerrado anticipates a construction decision by year-end 2025, with initial production slated for the second half of 2027. The company is well-funded to advance the project, with a projected cash balance of over US$20 million by the end of 2025, even after planned capital expenditures and debt reduction. This projection excludes potential payments of US$15 million from Hochschild and a US$10 million option payment from Anglo Gold.

Prior to the arrangement, Ascendant will complete private placements to raise approximately CA$3.3 million. Cerrado will participate in one of these placements, investing CA$900,000. Sprott will also convert outstanding deferred interest into Ascendant shares.

The acquisition offers Cerrado several key benefits, including access to a robust, low-cost project with significant near-term value creation potential. It also expands Cerrado’s exposure to precious metals and critical minerals. The project has already received “Project of National Interest” status from the Portuguese government, and environmental impact assessment (EIA) approval is expected soon.

Cerrado Gold Inc. is a Canadian-based mining company focused on acquiring and developing high-quality, undervalued mining assets in favorable jurisdictions. Cerrado prioritizes projects with robust economics, substantial resource potential, and opportunities for near-term value creation. Their portfolio includes precious metals and base metals projects.