Cerrado Gold has agreed to acquire all issued and outstanding shares of Ascendant Resources that it does not already own, in a move to secure an 80% interest in the Lagoa Salgada polymetallic VMS project in Portugal.
According to the terms of the definitive agreement, Ascendant shareholders will receive one Cerrado Gold common share for every 7.8 Ascendant shares held.
Upon completion of the deal, Ascendant shareholders will own approximately 21% of Cerrado Gold’s outstanding shares. The latter will issue 27.7 million new shares, bringing its total outstanding shares to approximately 131.3 million.
Located in the Iberian Pyrite Belt, the Lagoa Salgada project has been recognised as a “Project of National Interest” by the Portuguese government.
The site holds significant mineral reserves, with gold and silver accounting for approximately 34% of the net smelter return (NSR), alongside 30% zinc, 15% copper, 14% lead, and 7% tin.
The polymetallic VMS project’s 2023 feasibility study outlined an after-tax net present value (NPV) of $147m and an internal rate of return (IRR) of 39%.
It is also projected to contribute free cash flow of approximately $75m annually in the first five years.
An optimised feasibility study, expected in Q3 2025, aims to enhance project economics further.
An environmental impact assessment (EIA) approval for the Lagoa Salgada project is anticipated in Q2 2025, with a final construction decision expected by year-end. Initial production is targeted in the second half of 2027.
Cerrado Gold CEO and chairman Mark Brennan said: “The acquisition of Lagoa Salgada is a tremendous opportunity for Cerrado to add a world class, low cost asset with strong cash flow potential and create significant value as well as support our longer-term development plans without compromising our financial strength and current operations.”
Cerrado Gold plans to fund the project with minimal equity dilution, leveraging low-cost Export Credit Agency project financing from Tier 1 lenders, alongside financial backing from Sprott and potential off-take agreements.
Ascendant has secured support from the UK Export Credit Agency and Banco Santander for up to 70% of the project’s capital expenditure.
The transaction has been unanimously approved by the boards of both companies. In conjunction with the acquisition, Cerrado Gold has subscribed for Ascendant shares through a private placement worth C$0.9m ($0.62m).
The acquisition also aligns with Cerrado Gold’s broader strategy, complementing its existing operations at Minera Don Nicolas gold project and the Mont Sorcier iron project.
