Combined entity would create a mid tier market capitalization company once all assets are in operation

Acquisition follows strong production growth at MDN and a very robust Feasibility Study at MDC expected by end of May

Sprott Streaming and Royalty US$10 million Equalization Stream Financing Closed

TORONTO, ON / ACCESSWIRE / March 7, 2023 / Cerrado Gold Inc. [TSXV:CERT] [OTCQX:CRDOF] (“Cerrado” or the “Company”) has entered into a definitive agreement (the “Arrangement Agreement”) with Voyager Metals Inc. (TSXV: VONE) (“Voyager”) pursuant to which Cerrado will acquire all of the issued and outstanding shares of Voyager (each, a “Voyager Share”) not already owned by Cerrado by way of a plan of arrangement under Business Corporations Act (Ontario) (the “Arrangement”). Upon completion of the Arrangement, Cerrado will, indirectly through a wholly-owned subsidiary, own a 100% interest in the Mont Sorcier Iron and Vanadium project located near Chibougamou, Quebec (“Mont Sorcier”).

Mont Sorcier is a well advanced, large, long-life and economically robust Project in a tier one mining jurisdiction. In September 2022, Voyager completed a Preliminary Economic Assessment (the “PEA”) on Mont Sorcier, which outlined a project with an after-tax NPV of US$1.6 Billion and IRR of 43% producing 5.0MM tpa of iron concentrates over a mine life of 21 years with annual free cash flow of US$235 million. The project is currently advancing towards completion of a bankable Feasibility Study expected by the end of 2023.

Under the terms of the Arrangement Agreement, Voyager shareholders would receive one (1) common share of Cerrado (“Cerrado Share”) for every six (6) common shares of Voyager (the “Exchange Ratio”). The Exchange Ratio implies consideration of C$0.1523 per Voyager Share (the “Transaction Price”), based on the 20 day volume weighted average price (‘VWAP”) of the closing price of Cerrado common shares on the TSX Venture Exchange (the “TSXV”) on March 3, 2023, representing a 16.8% premium to 20-day VWAP of Voyager on the TSXV on March 3, 2023. Upon closing, the Arrangement would result in Voyager shareholders owning approximately 18% of the Cerrado Shares outstanding upon closing of the Arrangement.

Holders of Voyager options will receive equivalent securities of Cerrado adjusted in accordance with the Exchange Ratio. Securityholders of Voyager are expected to receive an aggregate of approximately 15,496,022 Cerrado Shares and 1,266,666 Cerrado options. Outstanding Voyager warrants will remain outstanding and in accordance with their terms will be exercisable for up to 2,140,452 Cerrado Shares based on the Exchange Ratio following the closing of the Arrangement.

Transaction Rationale

The Arrangement is expected to offer a number of significant benefits to Cerrado including:Attractive valuation for Cerrado to gain access to a robust, well defined, long-life project well known to the Cerrado operating team.

Financing and cash flow synergies could reduce the dilution for project development and significantly reduce dilution for Cerrado’s and Voyager’s current respective shareholders. (See Figure 1. Below)

Addition of a low cost, capital efficient and economically robust project to the portfolio in a low risk jurisdiction

Mont Sorcier is expectd to generate in excess of US$235m per annum in free cash flow over its 21-year life, which is expected to begin production in 2028 (with the potential for expansion & extension).

Mont Sorcie’s PEA demonstrated anNPV of US$1.6B based on Indicated Resources only, representing 25% of total defined resource leaving room for optimization and expansion potential.

Combined company would create a mid tier market capitalization once all assets are in operation.

For additional information please see Cerrado’s corporate presentation on the company’s website at
https://www.cerradogold.com/assets/Cerrado-Voyager.pdf

Figure 1. Pro forma Finacials for Operating Assets
see & read more on
https://www.cerradogold.com/news/cerrado-gold-to-acquire-voyager-metals/