Cerrado Gold plans Monte do Carmo start-up for 2025

Canada's Cerrado Gold is planning to start production at its Monte do Carmo project in Brazil’s Tocantins state in 2025.

The company also expects to have financing secured shortly.

Earlier this month, Cerrado requested an installation license from the state’s environmental authority Naturatins. The installation license is part of the environmental approval process, comprising preliminary, installation and operation licenses.

"We applied for the [installation license] and expect to get that permit before the end of the year. We will complete the feasibility study by the end of October. And from there, we expect to have funding completed around the end of the first quarter [2024]. It's a pretty aggressive schedule, but we feel very comfortable we can meet it," CEO Mark Brennan (pictured) told BNamericas.

"The construction process will take 16 months. So, probably by the third quarter 2025, we're in production. In the first full year of production [2026], this will be about 100,000oz," he said, adding that the current capex estimate is US$150mn.

FINANCING 

Cerrado has launched a tender to seek a lead arranger for its export credit agency project financing program. 

The firm sent banking information memorandums to project finance lenders that expressed interest in becoming lead arranger of the UK Export Finance (UKEF) supported credit facilities for the project.

The lead arranger will be selected this month, after which due diligence will start.

"They'll do their due diligence in the next two to three months. By the end of this year or early in the next year, they'll present us with the final term sheet and from there we go to [signing the financing contract]," Brennan said.

"By using UKEF we have an obligation to use about 40% of the project materials, services of UK companies. We don't see much of a challenge with that. But most part of the project will probably be more Brazilian focused," he added.

TAX CONCERNS 

Regarding a bill that would allow local governments to increase taxes, Brennan said, "taxes are always a great concern. The reality is we're investing, we're looking to invest a lot of money, we're looking to create a lot of jobs, we're looking to bring a lot of benefits to the communities in which we go, which we've always done. And we've always operated in a very responsible and careful manner."

He added, "I think that probably mining companies could absorb a small increase in taxes, but I if they go too far, they'll destroy that investment process and I don't think that's something that would be in the best interest of Brazil."