Cerrado Gold Buys Out Sprott Streams for $31.34M

Cerrado Gold bought back its streaming obligations to Sprott for $31.34 million, cancelling agreements that had diverted revenue from its Minera Don Nicolas mine in Argentina and the Lagoa Salgada project in Portugal. The transaction closed July 17.

The repurchase covers the two streaming agreements and a $19 million secured note with a 10% coupon, all dated from 2022 and 2023. Related security was released.

Cerrado paid with $8 million upfront cash plus 3 million common shares priced at C$1.5719 each, a 3% discount to the 10-day volume-weighted average. The deferred portion consists of two non-interest-bearing notes: $8 million due by October 6, 2026, and $12 million due by January 4, 2027. Those notes are secured by a general security agreement over all Cerrado assets.

Altitude Capital Partners, founded by Michael Wekerle, acted as sole financial advisor.

MDN is a producing gold-silver mine in Santa Cruz province. Lagoa Salgada is a high-grade polymetallic VMS project in Portugal's Iberian Pyrite Belt. The streams required Cerrado to deliver a portion of production at fixed prices. Cancelling them means the mine's entire output sells at spot, widening margins in the current gold rally. The LS note's 10% interest cost also disappears.

The company said it intends to create its own streaming vehicle, a shift that would let Cerrado provide financing to other miners while retaining exposure to their production. That plan would put Cerrado on both sides of a structure it just exited.

The transaction mirrors a broader move among gold producers using elevated prices to retire expensive financing deals signed during the 2020-2023 cycle.

Cerrado's common shares trade on the TSX Venture under CERT and on the OTCQX under CRDOF. The transaction is conditional on final TSX Venture Exchange acceptance.